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How Does the Execution Risk in a Mempool-Based DEX Differ from a CLOB-based Options Exchange?

DEX risk is MEV/front-running due to Mempool transparency; CLOB risk is system failure and mitigated counterparty risk.
Greeks.Live04.11.25

How Does the Execution Risk in a Mempool-Based DEX Differ from a CLOB-based Options Exchange?

Mempool-based DEX execution risk is primarily centered on front-running and MEV, where transaction ordering can be manipulated, leading to poor execution prices (slippage). CLOB-based exchange execution risk is primarily centered on counterparty risk (though mitigated by the Clearing House) and system risk (e.g. flash crashes, technical outages).

The decentralized nature of the Mempool introduces unique ordering and transparency risks not present in the centralized CLOB.

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How Does a Decentralized Exchange (DEX) Reduce Counterparty Risk Compared to a CEX?

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