Kraken co-CEO Arjun Sethi believes that centralised exchanges (CEX) and decentralized exchanges (DEX) are no longer competing models, but rather different expressions of the same core function in crypto. He argues that the gap between CEXs and DEXs is shrinking, fueling a trend toward integration. 3 Phases of Crypto Trading: From Custodial to On-Chain Sethi outlined three phases of trading history: Phase One, dominated by centralized exchanges like Kraken, offering deep liquidity and compliance systems. Phase Two saw the rise of decentralized exchanges (DEXs) with AMMs and on-chain settlement, empowering permissionless execution and faster innovation. In Phase Three, we’re seeing a hybrid era where unified liquidity, compliance bridges, and on-chain identity systems begin to blend CEX and DEX strengths, opening the door for increased capital efficiency and self-regulation.