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Illia Polosukhin sees the writing on the wall. The NEAR co-founder said users are already bypassing centralized exchanges for a growing number of crypto activities — and he thinks that trend isn’t slowing down.
Why It Matters
The shift away from centralized exchanges towards on-chain tools is significant as it reflects a broader trend of increasing user autonomy and a desire for greater control over assets in the crypto space. This evolution could disrupt traditional models of cryptocurrency trading and custody, potentially leading to enhanced security and reduced reliance on intermediaries. As the technology becomes more accessible, it may accelerate the adoption of decentralized finance (DeFi) and reshape market dynamics, prompting centralized platforms to reevaluate their strategies to maintain relevance.
His read on the market is pretty straightforward: on-chain tools have gotten good enough that a lot of what centralized platforms used to do exclusively, users can now do themselves. Directly. Without handing custody to anyone. Polosukhin’s view is that these tools are becoming more accessible and more effective for everyday crypto use, and that the gap between what’s available on-chain versus what a centralized exchange offers is narrowing fast. He didn’t put a timeline on it, and the source didn’t specify exact figures — but the direction he’s pointing seems clear enough.
On-Chain Tools Are Getting Harder to Ignore
The core of Polosukhin’s argument is capability. On-chain tools have evolved to handle transactions that used to belong almost entirely to centralized platforms. Trading. Lending. Borrowing. Things that once required an account, KYC verification, and trust in a third-party custodian can now happen directly on the blockchain, with the user in full control.
DeFi platforms drove a lot of that shift. By cutting out intermediaries, they gave users a level of autonomy that centralized exchanges basically can’t match by design. And that autonomy comes with real benefits — better privacy, no counterparty risk from the exchange itself, and in many cases lower fees. It’s not a perfect system. But for users who’ve been burned by exchange collapses or withdrawal freezes, the appeal is obvious.
Speed matters too. On-chain tools, when built well, can settle transactions faster and with fewer friction points than routing through a centralized order book. That’s a genuine competitive advantage, and it’s one that centralized exchanges can’t paper over with a slick interface alone.
What This Means for Centralized Exchanges
Centralized exchanges aren’t going anywhere tomorrow. That’s probably worth saying clearly. They still serve a real function — especially for people new to crypto who need a familiar, bank-like interface to get started. Polosukhin’s point isn’t that they disappear overnight. It’s that their role gets narrower.
And that’s a real problem for platforms that built their entire business model around being the indispensable middleman. If on-chain tools keep improving — and there’s no particular reason to think they won’t — those exchanges face a choice: adapt or specialize. Some will probably integrate on-chain functionality directly. Others might pivot toward institutional clients or regulated custody services where centralized control is actually a feature, not a bug.
But the retail user base? That’s where the pressure is. As on-chain tools get more user-friendly, the average person has less reason to keep funds on an exchange. Polosukhin sees that shift already happening. The question is how fast it accelerates.
Scalability and the Education Gap
None of this is frictionless. Polosukhin acknowledged that challenges remain — scalability and user education are two that can’t be hand-waved away. Blockchain networks still hit congestion under load. Gas fees spike. Interfaces that feel intuitive to a developer can be genuinely confusing to someone who just wants to swap tokens without a tutorial.
That education gap is real. On-chain tools ask users to take on responsibility that centralized platforms used to absorb. Manage your own keys. Understand what you’re signing. Don’t interact with malicious contracts. For a lot of people, that’s still a steep learning curve, and it probably keeps centralized exchanges relevant longer than the pure technology argument would suggest.
Still, the trajectory is what it is. Blockchain tech keeps improving. Layer-2 solutions are chipping away at scalability issues. Wallets are getting smarter. And every cycle of crypto adoption brings in users who are a little more comfortable with decentralized tools than the cohort before them.
Polosukhin’s broader point — that decentralized systems will play a more dominant role as technology progresses — isn’t really a controversial take at this point. It’s kind of the foundational premise of the whole DeFi movement. What’s notable is hearing it from a co-founder of a major Layer-1 blockchain, someone with a direct stake in whether on-chain infrastructure actually delivers.
The crypto space is shifting. Centralized exchanges still hold enormous market share and liquidity. But Polosukhin’s comments put a name and a specific argument to something a lot of traders already feel — that the center of gravity is moving, slowly but clearly, toward the chain itself.
NEAR’s ecosystem, naturally, sits on the on-chain side of that bet.
Frequently Asked Questions
What did NEAR co-founder Illia Polosukhin say about centralized exchanges?
Polosukhin said users are increasingly bypassing centralized exchanges for crypto activities, as on-chain tools become more accessible and effective for everyday use.
What challenges does the shift to on-chain tools still face?
Polosukhin pointed to scalability and user education as the two critical hurdles that remain before on-chain solutions can achieve widespread mainstream adoption.
