Usually CEX use fiat. But it is not safety to hold money on CEX. CEX can be hacked and CEX can block the account of users.
Now many CEXs blocks the accounts of traders from Russia.
People need to be sure that no one will be able to block their assets or steal money from their account, which is why many people prefer DEX.
But DEX also must be safety and have a good liquidity.
For DEX it is very important to have a good liquidity. That is why it is necessary to offer the providers of liquidity the best conditions to have a big liquidity pools.