Alright, buckle up, this ones a bit of a doozy.

This linked article argues that decentralized exchanges (DEXs) won't win out over centralized exchanges (CEXs)...

The main point being that DEXs set their prices based off what CEXs are offering, so one can't exist without the other.

Which is true...but that can be solved for. The real reason CEXs remain dominant, comes down to their ease-of-use.

First here's how the two systems work/differ:

CEXs

• Hold your crypto in their wallets, so if they go under, they take your crypto with them.
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• When you buy crypto from a CEX, they borrow the funds from an 'institutional liquidity provider.'
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  (Aka an entity with a buttload of crypto, that makes its money by lending its funds to CEXs).
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• A CEX makes its money by charging its users transaction fees (like a bank).

DEXs

• Don't hold your crypto, instead, they let you connect your own wallet and trade from there.
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  If they go under, it's not a problem - you still have custody of your crypto.
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• When you buy crypto from a DEX, they borrow the crypto from individual liquidity providers.
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  (Aka a bunch of people that pool their crypto together and earn interest on it by lending their collective funds to DEXs).
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• A DEX makes its money the same way a CEX does, by charging its users transaction fees (also like a bank).

Both are playing a game of volume - the more transactions folks make, the more money the exchange earns.

So...same result...same method of making money - but a CEX will hold your crypto (making it the riskier option)?

In that case, why would anyone use a centralized exchange?

Because, while they may be an inferior product as far as custody of funds goes, CEXs are way easier to use.

Most DEXs will only let you trade in cryptocurrency. So to first start using one, you need to:

Sign up to a CEX → buy crypto with your credit card → send it to your personal wallet → go to a DEX website → connect your wallet → trade.

It's a total pain by comparison.

And like we said last week:

At a certain point, it stops being a question of what a product can do - and instead becomes a question of how easy it is to use.

Better experience > better features.

(It's the same reason folks stay loyal to the iPhone, when Android phones have the same features, years before Apple).