How Do Centralized Exchanges (CEX) and Decentralized Exchanges (DEX) Typically Compare on Spread Size?

CEXs generally have narrower bid-offer spreads than DEXs, especially for high-volume assets. CEXs rely on traditional market makers and high-speed infrastructure to provide deep liquidity.

DEXs, which often use Automated Market Makers (AMMs), can have wider spreads due to the mathematical model, impermanent loss risk, and higher gas/transaction fees impacting the cost of liquidity provision.