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

**Published:** 2025-12-05
**Author:** Greeks.live
**Categories:** Path

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## 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.

- [What Is the Key Difference between a CEX and a DEX Order Book Model?](https://learn.greeks.live/path/what-is-the-key-difference-between-a-cex-and-a-dex-order-book-model/)

- [How Does the ‘Settlement’ Process Differ between a CEX and a DEX for an Option Contract?](https://learn.greeks.live/path/how-does-the-settlement-process-differ-between-a-cex-and-a-dex-for-an-option-contract/)

- [How Does a Decentralized Exchange (DEX) Handle Slippage Compared to a Centralized Exchange (CEX)?](https://learn.greeks.live/path/how-does-a-decentralized-exchange-dex-handle-slippage-compared-to-a-centralized-exchange-cex/)

- [How Does a Decentralized Exchange (DEX) Differ from a Centralized Exchange (CEX) in Terms of Liquidity Provision?](https://learn.greeks.live/path/how-does-a-decentralized-exchange-dex-differ-from-a-centralized-exchange-cex-in-terms-of-liquidity-provision/)

- [What Are the Risks of Using a Centralized Exchange (CEX) versus a DEX?](https://learn.greeks.live/path/what-are-the-risks-of-using-a-centralized-exchange-cex-versus-a-dex/)

- [What Is the Main Difference between a Centralized Exchange (CEX) and a Decentralized Exchange (DEX)?](https://learn.greeks.live/path/what-is-the-main-difference-between-a-centralized-exchange-cex-and-a-decentralized-exchange-dex/)

- [What Is a Decentralized Exchange (DEX) and How Does It Differ from a Centralized Exchange (CEX)?](https://learn.greeks.live/path/what-is-a-decentralized-exchange-dex-and-how-does-it-differ-from-a-centralized-exchange-cex/)

- [How Does a Decentralized Exchange (DEX) Manage Collateral Risk Differently from a Centralized Exchange (CEX)?](https://learn.greeks.live/path/how-does-a-decentralized-exchange-dex-manage-collateral-risk-differently-from-a-centralized-exchange-cex/)

## Discover More

### [What Are the Key Differences in Liquidity between Crypto Options and Stock Options?](https://learn.greeks.live/path/what-are-the-key-differences-in-liquidity-between-crypto-options-and-stock-options/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Are the Key Differences in Liquidity between Crypto Options and Stock Options?](https://learn.greeks.live/wp-content/uploads/2025/10/Conceptualization-of-Interconnected-Algorithmic-Liquidity-Swaps-Across-Decentralized-Exchange-Protocols.webp)

Crypto options have lower liquidity and wider spreads, concentrating on major coins and fewer platforms compared to stock options.

### [How Do Regulatory Differences across Jurisdictions Influence the Choice between Cash and Physical Settlement for Crypto Derivatives?](https://learn.greeks.live/path/how-do-regulatory-differences-across-jurisdictions-influence-the-choice-between-cash-and-physical-settlement-for-crypto-derivatives/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Do Regulatory Differences across Jurisdictions Influence the Choice between Cash and Physical Settlement for Crypto Derivatives?](https://learn.greeks.live/wp-content/uploads/2025/10/Macro-View-of-Digital-Asset-Custody-Mechanism-Coupling-with-Off-Exchange-Tokenized-Security-Settlement.webp)

Cash settlement is often preferred as it avoids complex 'asset custody' and 'money transmission' regulations associated with physical delivery.

### [Can a Public Key Verify a Signature without Knowing the Private Key?](https://learn.greeks.live/path/can-a-public-key-verify-a-signature-without-knowing-the-private-key/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Can a Public Key Verify a Signature without Knowing the Private Key?](https://learn.greeks.live/wp-content/uploads/2025/10/Macro-View-of-a-Secured-Physical-Layer-Access-Point-Detailing-Exotic-Asset-Tokenization-Infrastructure-Integrity.webp)

Yes, the public key is designed to verify the signature as authentic without requiring access to the secret private key.

### [What Are the Key Differences between Traditional and Crypto Prime Brokerage Models?](https://learn.greeks.live/path/what-are-the-key-differences-between-traditional-and-crypto-prime-brokerage-models/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Are the Key Differences between Traditional and Crypto Prime Brokerage Models?](https://learn.greeks.live/wp-content/uploads/2025/10/Quantum-Entanglement-Analog-in-Decentralized-Finance-Derivative-Settlement-Infrastructure-Visualization.webp)

Crypto models are hybrid, 24/7, and face unique regulatory and custody challenges, unlike the standardized traditional model.

### [What Are the Differences between On-Chain and Off-Chain Governance in Managing Protocol Risk?](https://learn.greeks.live/path/what-are-the-differences-between-on-chain-and-off-chain-governance-in-managing-protocol-risk/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Are the Differences between On-Chain and Off-Chain Governance in Managing Protocol Risk?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Autonomous-Organization-Governance-Mechanism-Prototype-for-Binary-Option-Settlement-Layer.webp)

On-chain governance is automated voting by code; off-chain is community discussion with trusted execution.

### [What Are the Key Differences between WebSocket and FIX Protocol for Crypto Data Feeds?](https://learn.greeks.live/path/what-are-the-key-differences-between-websocket-and-fix-protocol-for-crypto-data-feeds/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Are the Key Differences between WebSocket and FIX Protocol for Crypto Data Feeds?](https://learn.greeks.live/wp-content/uploads/2025/10/Conceptualizing-High-Frequency-Trading-Rotation-Mechanisms-in-Decentralized-Exchange-Liquidity-Provision.webp)

WebSocket is for low-overhead, real-time data streaming; FIX is a standardized, stateful protocol focused on reliable order and execution management.

### [What Are the Differences between On-Chain and Off-Chain Transactions in Terms of Security and Reliance on SHA-256?](https://learn.greeks.live/path/what-are-the-differences-between-on-chain-and-off-chain-transactions-in-terms-of-security-and-reliance-on-sha-256/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Are the Differences between On-Chain and Off-Chain Transactions in Terms of Security and Reliance on SHA-256?](https://learn.greeks.live/wp-content/uploads/2025/10/Planetary-Ring-Structure-Encapsulating-a-Spherical-Unit-Representing-Decentralized-Finance-Volatility-Hedging.webp)

On-chain transactions are secured by the blockchain's SHA-256 hashing, while off-chain security depends on a trusted third party.

### [What Are the Key Differences between a Security and a Commodity in US Law?](https://learn.greeks.live/path/what-are-the-key-differences-between-a-security-and-a-commodity-in-us-law/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Are the Key Differences between a Security and a Commodity in US Law?](https://learn.greeks.live/wp-content/uploads/2025/10/Quantum-Encapsulation-of-Decentralized-Finance-Derivative-Contract-Circuitry-and-Volatility-Dampeners.webp)

Securities (SEC) involve profit from others' efforts; Commodities (CFTC) are fungible goods traded based on supply/demand.

### [How Does a Public Key Relate to a Private Key?](https://learn.greeks.live/path/how-does-a-public-key-relate-to-a-private-key/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a Public Key Relate to a Private Key?](https://learn.greeks.live/wp-content/uploads/2025/10/Layered-Digital-Asset-Futures-Contract-Stacks-Representing-Liquidity-Pool-Stratification-and-Margin-Requirements.webp)

Public key is derived from the private key; used for receiving funds. Private key is secret; used for spending funds.

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