Why Are Decentralized Exchange (DEX) Options Often More Susceptible to Slippage than Centralized Exchange (CEX) Options?

DEX options typically use Automated Market Makers (AMMs) or have lower liquidity and fragmented order books compared to centralized exchanges. AMM models, while capital efficient, often result in higher slippage for large trades due to the nature of their pricing curves.

Furthermore, transaction finality on a blockchain can introduce latency, increasing the chance of unfavorable price changes before the trade is confirmed.