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How Do Gas Fees on Decentralized Exchanges (DEXs) Impact DeFi Arbitrage?

High and volatile gas fees on DEXs are a major execution cost that must be covered for DeFi arbitrage to be profitable.
Greeks.Live23.11.25

How Do Gas Fees on Decentralized Exchanges (DEXs) Impact DeFi Arbitrage?

Gas fees, the cost of executing a transaction on a blockchain like Ethereum, are a significant execution cost for DeFi arbitrage. These fees can be highly volatile and unpredictable.

An arbitrage opportunity must be large enough to cover the gas fee, which can be substantial during network congestion. Failed transactions still incur gas fees, leading to losses.

Arbitrageurs use sophisticated gas-estimation models.

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