Author: ChandlerZ, Foresight News
In the narrative of crypto trading, centralized vs. decentralized was once a clear-cut binary opposition, one side winning with depth and speed, the other with transparency and self-custody as its core beliefs.
Now, the boundaries are being redrawn. Leading exchanges no longer view on-chain trading as external traffic, but are attempting to directly integrate DEXs into the unified trading portal of CEXs, fusing matching, clearing and settlement, and the self-custody experience into one.
OKX has opened its in-exchange DEX product to all users, and currently offers gas-free access for a limited time. This is one of the rare systematic implementations in this direction. Since its finalization in the middle of the year, the project has involved cross-team collaboration of over 100 people, emphasizing product delivery under the dual constraints of regulatory compliance and user experience, and is seen as an important milestone for centralized platforms to proactively embrace the on-chain ecosystem.
Its goal is to find a stable balance between regulatory compliance, self-custody security, and user experience. As Lei Ming, head of the DEX within the OKX exchange, stated in an interview with Foresight News: "We hope users can complete on-chain transactions directly within OKX, but their assets remain firmly in their own hands." When DEXs are no longer just a "long tail," changes in market structure have provided a realistic impetus for integrating DEXs into exchanges. In June 2025, the global DEX/CEX spot trading volume ratio rose to a historical high of 27.9%; in the same month, the DEX/CEX trading volume ratio on the derivatives side also reached a new high of 8%. Both point to a trend: on-chain trading is no longer just a long tail, but is continuously eroding the centralized market share in the two core trading scenarios of spot and perpetual bonds. Behind this trend are the improvement of public chain performance, the maturity of liquidity aggregation technology, and the increasing demand from users for on-chain transparency. Market forces are changing the narrative. With the maturation of high-performance chains like Base and Solana, DEXs have transformed from being perceived as "slow, expensive, and with high slippage" to offering a "fast and deep" option. Matching/re-aggregating DEX technologies are bringing the traditional pain points of slippage and transaction certainty closer to the threshold of CEX experience. In reality, users don't care whether they trade "on-chain" or "off-chain"; they care more about the smoothness of the experience, the fairness of the price, and the security of their assets. From a regulatory perspective, the EU's MiCA has been refining its rules in stages since 2024, with stablecoin and service provider frameworks gradually being implemented. In the US, the Senate passed the GENIUS Act in June 2025, establishing federal-level baselines for reserves and disclosure. U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins has announced the launch of the SEC's "Project Crypto," a comprehensive overhaul of the existing regulatory system to accommodate crypto assets and pave the way for the "on-chain" transformation of the U.S. financial market. Atkins also stated his strong support for self-custodial wallets and his intention to reform the Special Purpose Brokerage (SPB) rules, which are not applicable to crypto assets, to develop more suitable regulations for registered institutions to hold crypto assets. These rules neither outright exclude DeFi nor discourage leading platforms from exploring productized forms of self-custodial trading gateways within compliance boundaries. As a result, exchanges have begun to realize that future incremental users may come from those middleware who want both visible assets and fast trading. OKX's choice is a response to this structural change. "Users are no longer discovering coins by looking at the exchange, but by looking at the on-chain activity," Lei Ming frankly stated. "What we want to do is merge the discovery and trading of on-chain assets into a continuous experience." This means that OKX is no longer just a platform for listing coins, but an entry point for on-chain transactions. Building on its accumulated capabilities in unified account systems, matching engines, and aggregators, the team began to try to make on-chain trading a part of the exchange experience. "This is not about stuffing DEX external chains into the app, but about integrating the experience at the product level." OKX's product logic: making self-custody a first-class citizen of the exchange. In this context, OKX's strategy is not "adding a DEX button to the app," but rather embedding on-chain trading as a system-level capability into the entire trading experience.


Its core choice is "self-custody first". For all assets not listed on exchanges, transactions must be initiated in the user's wallet and executed on-chain. The platform does not hold or custody assets. This means that OKX has proactively sacrificed some convenience in its product design in exchange for clear compliance and risk boundaries.
... The first phase will support Base, Solana, and its own X Layer, with plans to expand to more networks later. This will allow users to discover, trade, and manage multi-chain assets through a unified portal, and all of the aforementioned networks will support stablecoin trading pairs within the DEX. To support this architecture, OKX mobilized a cross-departmental team of over 100 people to conduct joint testing across wallets, matching systems, aggregators, accounts, and funds systems. This is more like a "bottom-level reconstruction" than a minor front-end tweak. In this solution, OKX chose to incorporate early project acquisition and on-chain transactions into a unified information architecture, but delegated asset custody responsibility to user-side wallets. In interviews with Foresight News, OKX repeatedly emphasized that the platform issues Proof-of-Responsibility (PoR) monthly on the CEX side and adopts one-to-one matching and does not establish a platform fund pool in lending and other businesses to reduce the institutional risks of misappropriation/mismatch. For the DEX side, self-custody replaces platform credit, separating the boundaries between CEX risk and on-chain risk. Meanwhile, OKX consistently updates its Proof-of-Record (PoR) monthly as a transparency anchor for CEXs. AA and Passkey: Reshaping On-Chain Usability For most users, the biggest hurdle in on-chain transactions is not contract complexity, but the barrier to entry. Gas, private keys, and mnemonic phrases—these native cryptographic terms are almost natural barriers for traditional exchange users. OKX's approach is to use technology to dissolve these barriers. Its wallet system uses an Account Abstraction (AA) architecture, supporting Gas abstraction and batch calls. In CeDeFi trading scenarios, users do not need to pay gas fees; the system pays the fees on-chain to complete the transaction. At the interaction layer, OKX introduced Passkey technology, allowing users to complete signatures via device fingerprint or facial recognition. "The most painful thing for users is the mnemonic phrase and gas fees. We eliminated these two steps through account abstraction and Passkey," explained Lei Ming. Passkey is bound to the terminal, and can be recovered via email or cloud if the device is lost. "We want users to feel almost invisible on the chain, but the security boundary remains self-custodied." At the experience layer: Gas abstraction is supported, allowing users to initiate CeDeFi transactions within the exchange app without gas fees. The system automatically completes on-chain fee settlement and inter-chain conversion, significantly reducing friction during the first on-chain transaction. AA allows batch calls and one-click execution of multiple contracts, shortening the order placement-on-chain-confirmation path. Risk Control and Recovery: AA Wallet no longer uses private key + mnemonic phrase as the sole entry point; Passkey is bound to the device. In extreme cases (loss of both device and email), the recovery path is longer, but the entry points for everyday theft (phishing, repeated passwords) are significantly reduced. This represents a paradigm shift from user operational risks to device and identity credential management. Industry Reference: Large platforms (such as Coinbase's Smart Wallet) have adopted Passkey + AA as their main form for the general public, emphasizing no expansion required, no mnemonic phrase required, and cloud synchronization, validating the feasibility of this approach. The adoption of Passkey in the broader internet field also doubled in 2024, providing a social cognitive foundation for passwordless login + biometrics. This product design is essentially a recompilation of the user experience. OKX compresses the on-chain transaction operation path into a centralized interaction logic without crossing the boundaries of user asset custody. Users still hold the key, but this key is encapsulated within a more familiar login experience. On the wallet side, the system also has built-in risk identification and anti-phishing functions. When abnormal contracts or high-risk tokens are detected, a clear warning will be given on the transaction front end. This mechanism comes from an exchange-level risk control system, a part that has long been missing from the DEX ecosystem. From an engineering perspective, the key to this approach is not who proposes it first, but who can refine the experience loop to the exchange level—that is, integrating wallet, market data, risk control, trading, and fund flow into a process where users don't perceive the complexity of the on-chain process. In the interview, the OKX team repeatedly listed experience and compliance as two major constraints, reflecting a product philosophy that upgrades technical usability to business usability. The essence of risk in the crypto industry lies in the choice of trust position: whether to entrust trust to the platform or to oneself? "Is decentralization always safer?" OKX's answer is: the two models bear different risks. The main risks of centralized trading lie in trust and counterparties, which the platform mitigates with PoR and independent audits; the risks of decentralized trading lie in user private keys and contract vulnerabilities. Therefore, OKX attempts to provide a third answer: layered risk management. "Security is not zero risk, but clearly defining who bears what risk," said Lei Ming. From a systemic perspective, OKX is building a new "risk distribution model," where the CEX portion assumes the trust responsibility for matching and fund security, while the DEX portion returns to the individual responsibility of on-chain self-custody. Users can freely switch between different risk-bearing methods within the same platform, depending on the nature of their assets. In the centralized portion, OKX continues to implement monthly Proof-of-Responsibility (PoR), disclosing reserves in a verifiable on-chain manner. For lending and wealth management products, the platform only handles matching, without setting up a liquidity pool; users always know who their counterparties are. On the on-chain portion, OKX returns control to users, reducing the probability of accidental operations and theft through the AA wallet and Passkey, and using a risk control engine to identify risky contracts, thus converging self-custodial risk into "controllable operational risk." The advantage of this layered structure is that users can freely choose their risk tolerance mode based on asset type. Mainstream assets are placed in centralized accounts, enjoying matching depth and instant execution; early assets are traded on-chain, enjoying transparency and self-custodial services. This is not a replacement of centralization by decentralization, but rather a complement. "We issue asset certificates every month; this is the most basic level of trust," they emphasized. "In lending products, we only act as a matchmaker, not a fund pool, so users know who their counterparts are." This transparent system design is becoming a consensus among leading exchanges to rebuild trust. Over the past year, almost all mainstream platforms have re-examined the boundaries between custody and assets. Mastering the Path, Not Attention. Since the end of 2024, the differentiation between exchanges has become increasingly clear. Some platforms, such as Binance Alpha, have seen the rise of pre-listed project pools and content channels. By continuously publishing early-stage project lists, points, and tasks within wallets or main sites, they softly link user attention with the potential listing pace. Essentially, they are doing discovery, operating in the form of content and project pools, recommending early assets to users in an "information flow" manner. The core of this model is attention; it lets users know "what's trending" before they wait for it to be listed. However, it's clear that the line between compliant disclosure and whether it constitutes disguised resale needs continuous calibration. "Others do Alpha, we do aggregation; the more comprehensive the information, the more neutral," Lei Ming stated. "We don't tell wealth stories; we talk about the trading experience." In this model, OKX doesn't pre-select projects or set whitelists; instead, it acts as a neutral aggregator, allowing users to complete real transactions directly on-chain. This presents two challenges: First, it involves high technical complexity, including engineering issues such as cross-chain routing, aggregated pricing, and failure rollback; second, it has higher regulatory requirements, requiring the platform to ensure all transactions are initiated by user-custodied wallets, with the platform not touching the assets. This is why OKX's path selection seems more like infrastructure construction than a marketing experiment. "This isn't about stuffing DEX external chains into an app; it's about creating a seamless experience at the product level," Lei Ming pointed out. This is also a cultural transformation. In the past, everyone excelled at traffic management, using listing schedules and market hype to drive trading volume; OKX, however, is attempting to reconstruct liquidity connections through technology, shortening the path from discovery to execution to minimize friction costs. The Multiplication of Experience In OKX's architecture, the launch of new products is a crucial link to a long-term ecosystem. "The next phase will cover more of the ecosystem, with the goal of enabling every user to buy the on-chain assets they want with a single click," Lei Ming revealed. This means OKX is attempting to build a comprehensive system encompassing wallets, transactions, and the blockchain itself. With the launch of its proprietary public chain X Layer, built on Polygon CDK, OKX possesses low-friction, intrinsic infrastructure. On-chain assets can be bridged with a single click within the wallet, resulting in lower gas costs, shorter settlement latency, and native support for stablecoin trading. Incentives can be additive, but experience is multiplicative. In this narrative reconstruction, technology is no longer the endpoint of the crypto industry, but the starting point for trust production. When centralized platforms possess self-custody capabilities, and when on-chain interactions offer an exchange-level experience, the boundaries between CEXs and DEXs become blurred. Users don't need to know which side they're on; they only need to be certain that the transaction belongs to them. Once the regulatory framework is gradually implemented and user perception shifts from speculation to practical use, competition among exchanges will no longer be about "who can list coins the fastest," but rather "whose system is more stable, offers a smoother experience, and has clearer risks." OKX's choice is to build trust through technological advancements and respond to the question of faith with engineering logic. In the future, centralization and decentralization may no longer be opposing labels in the industry, but rather two forms of integrated trading systems. And that original quote from the interview perhaps best encapsulates this transformation: "We hope users can complete on-chain transactions directly within OKX, but their assets remain firmly in their own hands."