The Untold Story Behind the Surge
How Memecoins Are Reshaping the Market and Challenging CEX Dominance
This report was written by Tiger Research, analyzing how memecoins reshaped cryptocurrency trading dynamics and challenged CEX dominance.
TL;DR
Memecoins have transformed from speculative assets into a dominant trading force, attracting massive liquidity and reshaping how capital moves in the crypto market.
The rise of DEXs, driven by platforms like Pump.fun, is diverting both liquidity and active traders from CEXs. This reduces the chance of early-stage price discovery.
Fast-adapting exchanges like MEXC that embrace memecoin trading are thriving, while slower-moving platforms like Binance are struggling to retain liquidity and market influence.
1. A New Battleground for Exchanges
Memecoins have transformed the cryptocurrency market. They started as speculative trends but now drive significant trading volumes across major exchanges.
Exchanges have shifted their strategies to embrace this trend. Gate.io and MEXC captured market share through rapid memecoin listings. Binance created 'Binance Alpha' to list early-stage memecoins and provide soft landings. In the DEX market, Solana-based Raydium overtook Ethereum-based Uniswap's market share. This milestone proves memecoins' power as a market catalyst.
As memecoins are playing a bigger role in exchanges, broader implications are at play. Will memecoin-driven trading lead to a lasting market evolution, or will it ultimately prove to be a cyclical phase? Furthermore, how will regulatory developments influence the sustainability of memecoins as a dominant asset class? These are the questions that will determine the future of retail trading and exchange growth.
2. DEX Disrupting the Status Quo: Raydium’s Win Over Uniswap
Memecoins drive Raydium's explosive growth. Raydium captured 27% of the DEX market share in January 2025, which proves retail investors prefer its platform. Solana chain's advantages power Raydium's success. The platform offers lower fees and faster transactions than Ethereum-based exchanges. These features have made Raydium the dominant hub for memecoin trades.
Uniswap has lost its DEX leadership position. Its market share fell from 34.5% to 22% between December 2024 and January 2025. High Ethereum gas fees create barriers for memecoin traders. These costs push away cost-sensitive retail investors. Ethereum-based DEXs must innovate as liquidity moves to new chains.
Memecoins clearly drive Raydium's growth, but experts must monitor this trend carefully. Some experts predict the memecoin trading surge will end as speculative demand falls. However, Raydium has already become a familiar platform to users through memecoin trading. By leveraging this trend as an opportunity, Raydium can strengthen its liquidity pools, improve user experience, and build efficient trading systems to grow into a trusted trading platform. These developments will secure its long-term competitive advantage over both DEXs and CEXs.
3. CEX’s Response: Can They Keep Up with the DEX Boom?
Gate.io and MEXC targeted retail investors interested in speculative assets through their memecoin-focused listing strategy. MEXC led the memecoin trend with its rapid listing policy. They listed Official Trump ($TRUMP) on its launch day, which led to record-breaking trading volumes and user base expansion. These strategies produced tangible results. MEXC's daily memecoin trading volume surged from 5.9% in Q1 2024 to 25.9% in January 2025. During the same period, the proportion of memecoin traders increased from 18.7% to 37.1%.
Even the world’s largest crypto exchange, Binance has significantly expanded its memecoin listings to secure retail liquidity. Their recent strategy focuses more on speculative assets, which targets the 'attention economy.' However, as a centralized exchange (CEX), Binance faces inevitable delays due to internal procedures like listing reviews. These delays often cause Binance to list memecoins when the market cycle has already declined or moved on to newer trends.
While the exchange provides ample liquidity to protect investors, this paradoxically serves as a liquidity exit for early holders to dump large quantities with minimal price impact. Most newly listed memecoins on Binance have dropped over 75% in price within a short period, causing significant losses for many investors. These outcomes not only damage the exchange's long-term credibility but also raise questions about the reliability of their listing review process.
Major CEXs like Coinbase, Kraken, and Upbit maintain a cautious strategy by focusing on verified cryptocurrencies rather than memecoins. While this approach cannot leverage highly profitable short-term market opportunities, it helps secure platform stability and manage regulatory risks.
However, recent clear trends show funds moving from CEXs to DEXs, revealing that CEX no longer hold absolute market dominance. CEXs must now review their existing strategies. They can pursue various strategic approaches: screening early-stage assets and providing transparent information like Binance Alpha, managing risks through selective memecoin listings, or introducing hybrid trading models that incorporate on-chain orderbooks and DeFi elements.
The core challenge for CEX is to develop solutions that balance short-term trading activity with long-term platform stability, while maintaining institutional investor trust and effectively attracting retail investors.
4. Strategic Takeaways and Future Outlook
Memecoins have transformed from speculative tools into major trading assets in the cryptocurrency market. DEX memecoin trades have surged to create new opportunities and challenges for the crypto industry.
Memecoins on DEXs have outperformed CEX-listed assets during recent bull markets, which drives investors toward DEXs. Platforms like Pump.fun have made memecoin launches and trades simpler. This allows new tokens to grow explosively without CEX listings.
Market makers, liquidity providers, and project teams have adapted their strategies to match these changes. They previously focused only on CEX listings but now consider DEX environments as well. They build liquidity pools across multiple platforms to expand trading accessibility.
Unethical practices threaten the memecoin market. Rug pulls, cabals, and malicious trades harm investors. The market lacks proper oversight. The Argentina Libra ($LIBRA) scandal exposed these risks. It sparked widespread skepticism and drove down Solana DEX trading volumes.
Despite these challenges, memecoins demonstrate new potential in crypto. They now serve as proxy assets for specific entities and groups. Cases like Elon Musk with Dogecoin, Trump with Official Trump token, and various startup and national memecoins show how cryptocurrencies capture real value. This trend mirrors traditional securities markets and could become a new cultural norm.
CEXs must respond to these changes. Investors no longer wait for CEX listings to trade promising assets. Exchanges need to integrate on-chain and DeFi features while maintaining stability and compliance to keep retail interest. This strategy will drive the next phase of market growth.
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