Decentralized crypto exchanges (DEXs) have their pros (limitless crypto trading pairs) and their cons (difficult onboarding experiences) when compared to the centralized exchanges (CEXs) of the world. Nonetheless, they are rising in popularity.

From April 2021 to April 2022, Web 3 users sent $224 billion in on-chain value to DEXs, outstripping centralized exchanges like Coinbase, which combined for $175 billion over the same period, according to a new report from Chainalysis.

While those figures don’t speak to bottom-line trading volumes, they do highlight how DEXs offer a viable alternative to CEXs. But a transition from CEXs to DEXs raises concerns as to how this growing sector of crypto will be regulated. Decentralized exchanges are self-executing, and for better or for worse lack the human element of centralized exchanges. That means they’re harder to regulate.

Chainalysis Economist Ethan McMahon told CoinDesk that the move from CEXs to DEXs began in 2020’s DeFi Summer and carried through the non-fungible token (NFT) boom of 2021. DEXs first cleared 50% market share in September 2020, according to the report. In June 2021, this number hit its peak at 80%.

When asked about the future DEX dominance, McMahon said regulation will likely play a role in these numbers.

While decentralized exchanges are noncustodial and offer a wider range of currency pairs, according to McMahon, they aren’t as easy to use and do not offer the same regulatory assurance that centralized exchanges do. If DEXs continue to increase in popularity, a regulatory crackdown might be on the way.

“If [regulation] serves as a hindrance, it may actually reduce the market share,” McMahon said.