What’s Holding DEXs Back And Who Are Solving It

DeFi -Decentralized Finance. Concept of blockchain, decentralized financial system

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Decentralized exchanges (DEXs) were meant to embody the promise of DeFi: open, borderless, peer-to-peer markets that couldn’t be shut down. They account for 7.6% of the total global crypto trading volume, up from just 3% in 2023, and represent a larger percentage of CEX volume (Grayscale Research, 2025). In practice, they’ve often fallen short. High transaction fees, long settlement times, clunky user experiences, and fragmented liquidity have left many traders frustrated and institutions largely on the sidelines.

Ethereum-based platforms like Uniswap introduced powerful innovations, but high fees, slow confirmations, and fragmented liquidity still dominate the user experience. During peak times, trades can take minutes and cost more than $30, which is untenable for both retail users and professional traders. Institutions remain hesitant, citing compliance uncertainty, poor execution quality, and limited integration with existing financial infrastructure. The gap between DeFi’s potential and its practical usability remains wide. But where most DEXs have settled for half-measures, there are now a new breed of protocols approaching the problem at its root: reengineering infrastructure to handle scale, compliance, and precision.

The Case for a New DEX Model

For professional traders used to instant execution and deterministic pricing, Ethereum’s bottlenecks undermine the fundamental trust in the system’s reliability. What began as a decentralized revolution started to resemble a high-risk gamble, with performance lagging far behind ambition. While layer-2 solutions have emerged in recent years, they often create isolated ecosystems with their own bridges, tokens, wallets, and application environments. This fragmentation breaks Ethereum’s original composability and interoperability, as DEXs on one layer-2 cannot seamlessly interact with others, reducing the ability of decentralized applications (DApps) to operate seamlessly across the Ethereum ecosystem.

XRPL offers a very different baseline. Trades finalize in three to five seconds, enabling near-instant payment finality, and transaction fees are measured in fractions of a cent. Ripple, the company behind XPRL, is a leading blockchain firm focused on institutional adoption, partnering with global banks and payment providers to streamline cross-border transactions and integrate blockchain and DeFi technologies into traditional finance systems, emphasizing regulatory compliance and real-world use cases.

XPRL’s maturity as a well-established blockchain with a proven track record, and its combination of speed and efficiency is what drew DeXRP to build on the ledger.

But speed and cost alone aren’t enough. DeXRP’s innovation lies in its hybrid model. Instead of choosing between an Automated Market Marker (AMM) and an order book, it integrates both. AMMs provide simplicity and accessibility for retail traders, while an order book supports professional-grade trading strategies. By pooling liquidity across the two systems, DeXRP aims to reduce slippage, tighten spreads, and deliver an execution experience closer to what institutions demand.

“Everyone knows the convenience of centralized exchanges,” founder Trevor Gedeon says. “What they haven’t experienced yet is the same simplicity with true DeFi principles: open access, security, and a system no one can switch off. That’s the future we’re building.”

DeXRP is part of a growing wave of innovation on the XRP Ledger, but it’s not the only one exploring decentralized finance on this foundation. Other XRPL-native projects are also exploring decentralized trading through different lenses. Ripple recently launched a Permissioned Decentralized Exchange, tailored for institutions needing KYC and compliance controls, offering a gated environment that contrasts with DeXRP’s open, hybrid model. With a different focus, the XRPL EVM Sidechain brings Ethereum-compatible smart contracts to the ledger, expanding XRPL’s DeFi potential without altering its native consensus or architecture.

Beyond the Boom-and-Bust DeFi Cycle

When the tech is strong, credibility becomes the real frontier. In DeFi, that’s a steep climb. The space is littered with projects that launched fast, raised millions in token sales, then either imploded due to poor security or quietly disappeared once the hype died down. Audits were skipped, promises were inflated, and the aftermath left not just financial damage, but reputational risk that continues to shadow the entire sector.

For institutional investors, regulators, and even experienced retail traders, that history is a warning sign. The skepticism isn’t about the potential of the technology; in fact, it’s about whether this time will be any different. Gedeon knew this. From the beginning, he understood that building the product was only half the challenge. The harder task would be earning trust in an ecosystem that has burned even its most optimistic backers.

So Gedeon knew that credibility would be the hardest challenge.

“The primary challenge has been building credibility in a competitive and often speculative DeFi landscape,” he admits. “We overcame this by focusing on real utility, obtaining audits early, and forming visible partnerships, rather than relying on hype.”

DeXRP has leaned into transparency from the start. The company sought independent audits early, focused on tangible utility over token-driven marketing, and pursued visible partnerships to signal seriousness. Community traction is strongest in Asia, Europe, and Latin America, where XRP already commands a loyal user base. Coverage from Cointelegraph, The Defiant, and Decrypt has further positioned DeXRP as one of the top XRPL-native projects aiming to serve both individual and institutional markets.

DeFi Wasn’t Built for Traditional Finance Compliance… But It’s Heading There Anyway

Decentralized exchanges were never meant to play by old rules. The whole point was to build open, borderless systems that couldn’t be switched off, bypassing the gatekeepers of traditional finance.

Europe’s MiCA framework now treats crypto platforms much like traditional financial entities, imposing licensing and transparency requirements on them. The OECD’s Crypto-Asset Reporting Framework (CARF) will go even further, mandating the global sharing of tax data, including wallet-level transactions.

The U.S. has taken a more fragmented, but surprisingly instructive, path. The Department of Justice has quietly walked back aggressive prosecutions, signalling that builders of non-custodial protocols aren’t the same as operators of centralized exchanges. In the background, policy advocates are pushing for a safe harbor model as a legal middle ground, where innovation can flourish without being stifled by excessive regulation. This is precisely our recommendation to create a regulatory safe harbor regime for nascent protocols that aim to decentralize, outlined in the Crypto Council for Innovation’s whitepaper on the Key Elements of an Effective DeFi Framework, in which I was a co-author.

All things considered, Ripple is building with that future in mind. Its acquisition of prime broker Hidden Road and the launch of RLUSD, a fully backed stablecoin issued under a New York trust charter, show the move toward infrastructure that meets regulatory expectations without abandoning crypto’s core principles (CNBC, 2025). And it’s not stopping at compliance. Ripple is actively shaping the next phase of policy, championing real-world sandbox initiatives that allow projects to test tokenized assets in live environments: real users, real liquidity, real cross-border movement (SEC.gov, 2025).

Where does that leave projects like DeXRP? At a crossroads, but with an opportunity. Regulation doesn’t have to mean compromise; it can be a design principle. DeXRP has opted for transparency, external audits, and a hybrid architecture that blends. DeXRP is responding by embedding credibility into its architecture: conducting audits before hype, prioritizing partnerships over promotion, and adopting a hybrid model that appeals to both institutions and individuals.