The Evolution of Decentralized Exchanges

Promise, Peril, and Policy Changes

Authors

  • Campbell R. Harvey Duke University
  • Joel Hasbrouck New York University
  • Fahad Saleh University of Florida

DOI:

https://doi.org/10.5195/ledger.2026.613

Abstract

Decentralized exchanges (DEXs) present challenges for regulation and investor protection; nevertheless, they also present many opportunities for disintermediation and transparency. We explore the past and present state of DEXs, and argue that regulators ought to recognize the both their risks and promises, pursuing oversight strategies that balance flexibility and investor protection.

Author Biography

Campbell R. Harvey, Duke University

Campbell Harvey headshot

Campbell R. Harvey is professor of Finance at Duke University in Durham, NC and a Research Associate with the National Bureau of Economic Research in Cambridge, MA. He served as the 2017 president of the American Finance Association. He is the coauthor of DeFi and the Future of Finance published by John Wiley and Sons. For the past nine years, he has taught Innovation and Cryptoventures at Duke University. In addition, Coursera hosts his four course certificate in decentralized finance.

References

‌Bachu, B., Hasbrouck, J., Saleh, F., Wan, X. “An overview of Uniswap v4 for researchers.” SSRN (2025) https://dx.doi.org/10.2139/ssrn.5152215.

‌Capponi, A., Jia, R., Zhu, B. “The Paradox of Just-in-Time Liquidity in Decentralized Exchanges: More Providers Can Sometimes Mean Less Liquidity.” SSRN (2023) https://dx.doi.org/10.2139/ssrn.4648055.

Harvey, C. R., Hasbrouck, J., Saleh, F. “The Evolution of Decentralized Exchange: Risks, Benefits and Oversight”. Research Policy (2026) forthcoming. Available at https://dx.doi.org/10.2139/ssrn.4861942.

‌Hasbrouck, J., Rivera, T. J., Saleh, F. “An Economic Model of a Decentralized Exchange with Concentrated Liquidity.” Management Science 0.0 (2025) https://doi.org/10.1287/mnsc.2024.04510.

‌John, K., Monnot, B., Mueller, P., Saleh, F., Schwarz-Schilling, C. “Economics of Ethereum.” Journal of Corporate Finance 91 102718 (2025) https://dx.doi.org/10.2139/ssrn.4783695.

‌Kyle, A. S. “Continuous Auctions and Insider Trading.” Econometrica 53.6 1315–1336 (1985) https://doi.org/10.2307/1913210.

‌Malinova, K., Park, A. “Learning from DeFi: Would Automated Market Makers Improve Equity Trading?” SSRN (2023) https://dx.doi.org/10.2139/ssrn.4531670.

‌No Author. “Elements of Effective Policies for Crypto Assets.” International Monetary Fund (2023) https://www.imf.org/en/Publications/Policy-Papers/Issues/2023/02/23/Elements-of-Effective-Policies-for-Crypto-Assets-530092.

‌No Author. “Project Mariana: Cross-Border Exchange of Wholesale CBDCs Using Automated Market-Makers (Final Report).” Bank for International Settlements (2023) https://www.bis.org/publ/othp75.htm.

‌Park, A. “The Conceptual Flaws of Decentralized Automated Market Making.” Management Science 69.11 6731–6751 (2025) https://doi.org/10.1287/mnsc.2021.02802.

Downloads

Published

2026-06-05

How to Cite

Harvey, C., Hasbrouck, J., & Saleh, F. (2026). The Evolution of Decentralized Exchanges : Promise, Peril, and Policy Changes. Ledger, 11, 1–6. https://doi.org/10.5195/ledger.2026.613

Issue

Vol. 11 (2026)

Section

Perspectives

License

Copyright (c) 2026 Campbell R. Harvey, Joel Hasbrouck, Fahad Saleh

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