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What Are the Key Differences between Centralized and Decentralized Exchange Arbitrage?

CEX arbitrage is fast and liquid; DEX arbitrage is decentralized and DeFi-native.
Greeks.Live20.11.25

What Are the Key Differences between Centralized and Decentralized Exchange Arbitrage?

The key differences between centralized (CEX) and decentralized (DEX) exchange arbitrage lie in their infrastructure, fees, and security models. CEXs are operated by a central authority, offering high liquidity and fast transaction speeds, but they require users to deposit funds into a custodial wallet.

DEXs are non-custodial and operate on a peer-to-peer basis, giving users more control over their funds, but they often have lower liquidity and higher transaction fees (gas costs). CEX arbitrage typically involves exploiting price differences between two centralized platforms, while DEX arbitrage focuses on opportunities within the DeFi ecosystem, often utilizing flash loans and liquidity pools.

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What Are the Key Advantages of a Hybrid CEX/DEX Model for Derivatives Trading?
How Does a Decentralized Exchange (DEX) Handle Slippage Compared to a Centralized Exchange (CEX)?
What Is a Decentralized Exchange (DEX) and How Does It Differ from a Centralized Exchange (CEX)?

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