Decentralised exchanges: Binance founder, CZ’s, new focus - Aster
Decentralised exchanges are peer-to-peer networks in which traders gain access to one another without an underlying centralised mediator - these platforms operate on the basis of smart contracts (self-executing computer code that is installed on blockchains) to control the execution and settlement of orders. Worthy of note is that DEX trading volumes are significantly growing, achieving approximately $412 billion in average monthly trading volume in 2025 and marking a 37% increase year-on-year. The launch of Aster, a new perpetual decentralised exchange (DEX), backed by YZi Labs and Binance co-founder, CZ, has added attention to this space. However, this swift increase in the number of tokens and the promotion of the project by CZ has raised doubts regarding the importance of this project and the larger purpose of decentralised trading.
CZ launches Aster a new DEX
Source: X
In contrast to centralised exchanges (CEX)s (e.g. Binance, Crypto.Com, Upbit, Coinbase or Kraken) that hold users’ digital assets, DEXs do not offer custody services. Rather, the users are holding their own private keys/assets and communicate with liquidity pools using blockchains. The structure is attractive to traders who wish to have privacy and autonomy because DEXs do not usually need individuals to provide their personal data, including names or addresses. But privacy is only one of the aspects that make DEXs attractive, they offer access to a significant variety of tokens, most of which are not traded on CEX platforms. This renders DEX as a critical entry point to users who are interested in venturing into the greater decentralised finance (DeFi) world.
In essence, use of a DEX involves a number of processes that are quite different compared to centralised exchanges. First of all, traders are required to select a DEX that fits a blockchain and tokens of interest to them - for example, Uniswap mainly operates with Ethereum, whereas PancakeSwap operates with BNB Chain, and Raydium operates with Solana. Furthermore, in order to engage with a selected DEX, the user must have a Web3 wallet, such as MetaMask, Trust Wallet or Phantom. These wallets are non-custodial and therefore the users of the wallets have full control of their assets using private keys. Once a wallet is created, users usually add funds to their wallets by transferring the assets they have bought on a centralised exchange. As an illustration, purchasing ETH on Coinbase and transferring it to MetaMask will enable a user to trade on Uniswap. Once funded, the wallet can be linked with the DEX as users give their consent to smart contracts that grant DEX the ability to conduct transactions with particular tokens in their wallet using market makers (AMMs). The trades are conducted directly on-chain with no intermediary required with transaction costs (gas fees) being paid in the native currency of the blockchain being used, e.g. ETH, BNB or SOL. For new beginners, however, they usually experience difficulties in configuring wallets, compatibility with networks and cost of transactions and this hurdle is still impeding mainstream adoption of DEXs. Meanwhile, the autonomy associated with the non-custodian nature of DEXs comes at the cost of responsibility transfer to users - losing private keys or sending assets to incorrect wallet addresses results in permanent loss of funds. In contrast, centralised exchanges do sometimes provide limited insurance or recovery services. Nonetheless, there are other threats in using DEXs in the form of phishing and malicious smart contracts. Users may be fooled by fraudulent sites masquerading as well-known DEXs and so make dangerous transactions that empty wallets. To counter this, professionals recommend checking the URL to ensure you are connecting to the correct website you intended, storing large amounts in hardware wallets and inspecting the approvals to contracts on a regular basis with the help of such tools as Revoke.cash.
Another issue is liquidity; there are DEX tokens that have little trading and low liquidity so are prone to sudden price changes, rug pulls or wash trading. Furthermore, although automated AMMs have enhanced liquidity through letting users deposit tokens in pools, these products remain vulnerable to volatility and impermanent loss to liquidity providers - such risks point to the conflict between decentralisation and protection of the users. Lack of intermediaries enhances freedom and lessens protection, making more of a concern on personal knowledge and carefulness. The regulation of DEXs is becoming a bigger issue as they become used more; a particular challenge is that DEXs typically do not carry out know your customer (KYC) and anti-money laundering (AML) checks - centralised exchanges do because they are typically regulated. Hence, this anonymity has made control of DEXs difficult as well as concerns raised on illegal finance, money laundering and transnational crime. DEXs also function globally which presents added challenges when it comes to regulation, including: cryptocurrencies can be subject to different rules depending on how they are classified by regulators in various countries as commodities, securities or even a currency; others propose decentralised identity solutions, which maintain the privacy of the user but permit partial verification; and some of them are urging industry co-operation with regulators to establish structures to support decentralisation and deal with systemic risks. In the meantime the recent certifications of crypto-based ETFs in the US indicate that the regulators are ready to take part, yet the specific policies of DEXs have not yet been established. Hence, with a more definite regulatory environment yet to be created, it is not yet clear how DEXs will become part of the larger financial system.
So, it is against this background that the introduction of an everlasting decentralised exchange known as Aster has attracted considerable interest. The platform was originally known as ApolloX in 2021 but was later acquired by Astherus and renamed Aster with a token generation event (TGE) in September 2025. The event enabled the former APX owners to trade-in their tokens with Aster which established a new dynamic in the market. In twenty-four hours of trading, the price of Aster rose by more than five times, climbing massively without a normal sell-off after the airdrop. The volumes (traded in the form of hundreds of millions of dollars) put the platform among the busiest in the sector within a short period of time, only to witness the price plunge by 30% a few days later. Potentially, the most important thing about Aster is CZ involvement, in particular because CZ was banned from making managerial decisions in Binance in 2024 as part of a lifetime ban imposed by the US authorities. CZ publicly congratulated Aster and asked its creators to continue building - it was supported by his own presence, as well as the network that Aster had with YZi Labs (a past affiliate of Binance Labs). According to blockchain data, Aster possessed the second largest amount of BNB Chain data. This close support sparked off the inquiry in the crypto industry that CZ may, indeed, have direct involvement. However, although he has refuted being the man in charge of the project, he does have a hand in the ecosystem.
Certainly, the Aster launch brings up more extensive concerns regarding the development of decentralised trading - for example, are there chances of a new DEX, even one with high profile support, competing with well-established competitors such as Hyperliquid which trade in billions of dollars in trading volume per day? And, will the interest of investors continue when the first hype wears off? The nexus between regulation and decentralisation is also brought out in the project. Since CZ still informally remains close to the management (even though he is not part of the management officially) the case shows how hard it is to distinguish between personal aid, investment into the ecosystem and corporate responsibility. Aster might be a test case to the regulators. Its scale, links to the Binance ecosystem and extensive adoption can speed up the demand of more transparent structures that regulate the work of DEXs. It also provides another trading platform where users can trade perpetually with the same risks that are typical of decentralised platforms in general. One of the most important cryptocurrency innovations is decentralised exchanges - they provide privacy, access and increased tokens by eliminating the middlemen. However, their benefits are matched with security risks and liquidity as well as regulatory risks in particular the lack of AML/KYC checks. It is yet to be seen whether Aster will become a significant player in the perpetuals industry. Regulators, investors and developers’ stakeholders are walking a fine line through this area which will define how DEXs, and projects such as Aster, define the future of digital finance.
This article first appeared in Digital Bytes (14th of October, 2025), a weekly newsletter by Jonny Fry of Team Blockchain.