One of the main challenges faced by decentralized exchanges is liquidity. Liquidity indicates how easy it is to buy or sell a particular asset. In the cryptocurrency market, high liquidity indicates a higher possibility of trading, so it is always desirable. Low liquidity causes prices to fall, forcing traders to rely on expensive centralized exchanges for trading. What would be the strategy to come out from it?
The average trading volume of decentralized exchanges is still a small part of the trading volume of centralized exchanges, which is a function of the emerging nature of these options and the limited scope of the entire crypto economy.