# Why Do CEXs Generally Offer Higher Liquidity than DEXs? ⎊ Path

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

---

## Why Do CEXs Generally Offer Higher Liquidity than DEXs?

CEXs typically offer higher liquidity because they aggregate orders from a massive, global user base and employ professional market makers who commit substantial capital to their order books. This centralized aggregation of capital results in deeper order books and tighter bid-ask spreads.

DEXs rely on decentralized liquidity providers, which can be more fragmented and less capital-intensive, especially for newer or smaller asset pairs.

- [How Do Centralized Exchanges (CEX) and Decentralized Exchanges (DEX) Typically Compare on Spread Size?](https://learn.greeks.live/path/how-do-centralized-exchanges-cex-and-decentralized-exchanges-dex-typically-compare-on-spread-size/)

- [How Do CEXs Incentivize Market Makers to Maintain Tight Spreads?](https://learn.greeks.live/path/how-do-cexs-incentivize-market-makers-to-maintain-tight-spreads/)

- [How Does the Market Capitalization of a Cryptocurrency Generally Correlate with Its Slippage Potential?](https://learn.greeks.live/path/how-does-the-market-capitalization-of-a-cryptocurrency-generally-correlate-with-its-slippage-potential/)

- [How Does the ‘Order Book Depth’ Visualize the Liquidity Difference That Causes the Spread Disparity between the Two Asset Classes?](https://learn.greeks.live/path/how-does-the-order-book-depth-visualize-the-liquidity-difference-that-causes-the-spread-disparity-between-the-two-asset-classes/)

- [How Do Centralized Exchanges (CEX) and Decentralized Exchanges (DEX) Typically Compare in Terms of Bid-Offer Spreads?](https://learn.greeks.live/path/how-do-centralized-exchanges-cex-and-decentralized-exchanges-dex-typically-compare-in-terms-of-bid-offer-spreads/)

- [How Do Decentralized Exchanges (DEXs) Handle Bid-Offer Spreads Differently than Centralized Exchanges (CEXs)?](https://learn.greeks.live/path/how-do-decentralized-exchanges-dexs-handle-bid-offer-spreads-differently-than-centralized-exchanges-cexs/)

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

- [What Is the Difference between “Crime Insurance” and “Professional Liability Insurance” for a Custodian?](https://learn.greeks.live/path/what-is-the-difference-between-crime-insurance-and-professional-liability-insurance-for-a-custodian/)

## Glossar

### [Cexs](https://learn.greeks.live/area/cexs/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Architecture ⎊ Cexs, within the cryptocurrency derivatives landscape, represent centralized exchange functionalities extended to encompass options and perpetual swap contract trading, functioning as intermediaries for order matching and contract fulfillment.

### [AMM](https://learn.greeks.live/area/amm/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Architecture ⎊ Automated Market Makers (AMMs) represent a paradigm shift in decentralized exchange (DEX) design, moving away from traditional order book models to a constant function market mechanism.

### [Deeper Order Books](https://learn.greeks.live/area/deeper-order-books/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Provision ⎊ Deeper order books represent a market condition where there is a substantial volume of buy and sell orders at various price levels away from the current market price.

### [Professional Market Makers](https://learn.greeks.live/area/professional-market-makers/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Role ⎊ Professional market makers are institutional entities that provide liquidity to financial markets by simultaneously quoting both buy and sell prices for assets.

### [Global User Base](https://learn.greeks.live/area/global-user-base/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Reach ⎊ The global user base within cryptocurrency, options trading, and financial derivatives represents the aggregate of individuals and institutions participating in these markets, fundamentally influencing liquidity and price discovery.

### [Market Makers](https://learn.greeks.live/area/market-makers/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Function ⎊ Market Makers in cryptocurrency, options, and derivatives markets actively provide liquidity by simultaneously offering to buy and sell assets, narrowing bid-ask spreads and facilitating efficient price discovery.

## Discover More

### [What Is the Regulatory Definition of a "Money Transmitter" and Why Does It Apply to CEXs?](https://learn.greeks.live/path/what-is-the-regulatory-definition-of-a-money-transmitter-and-why-does-it-apply-to-cexs/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Regulatory Definition of a "Money Transmitter" and Why Does It Apply to CEXs?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Autonomous-Organization-Governance-Mechanism-Revealing-Complex-Option-Pricing-Structures.webp)

A business that transfers funds for the public; CEXs fit this by sending/receiving customer crypto/fiat, requiring FinCEN registration.

### [Why Do ITM Options Trade at a Higher Delta than OTM Options?](https://learn.greeks.live/path/why-do-itm-options-trade-at-a-higher-delta-than-otm-options/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Do ITM Options Trade at a Higher Delta than OTM Options?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Finance-Volatility-Surface-Modeling-Through-High-Frequency-Trading-Chronometers.webp)

ITM options have higher delta because their price movement is closely tied to the underlying asset's price change.

### [Why Are European Options Generally Cheaper than Comparable American Options?](https://learn.greeks.live/path/why-are-european-options-generally-cheaper-than-comparable-american-options/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Are European Options Generally Cheaper than Comparable American Options?](https://learn.greeks.live/wp-content/uploads/2025/10/Quantum-Ledger-Integration-Point-Illuminated-Through-Encrypted-Digital-Infrastructure-Gateways.webp)

European options lack the valuable early exercise right of American options, making them generally lower in premium.

### [Are Transaction Fees Generally Lower on Perpetual Swaps than Traditional Futures?](https://learn.greeks.live/path/are-transaction-fees-generally-lower-on-perpetual-swaps-than-traditional-futures/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Are Transaction Fees Generally Lower on Perpetual Swaps than Traditional Futures?](https://learn.greeks.live/wp-content/uploads/2025/10/Conceptualization-of-Interconnected-Algorithmic-Liquidity-Swaps-Across-Decentralized-Exchange-Protocols.webp)

Transaction fees are generally comparable, but the total cost must include the periodic funding rate payments.

### [How Do Decentralized Exchanges (DEXs) with Low Liquidity Make an Oracle Vulnerable?](https://learn.greeks.live/path/how-do-decentralized-exchanges-dexs-with-low-liquidity-make-an-oracle-vulnerable/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Do Decentralized Exchanges (DEXs) with Low Liquidity Make an Oracle Vulnerable?](https://learn.greeks.live/wp-content/uploads/2025/10/Angular-Bifurcation-Of-A-Digital-Asset-Hinge-Mechanism-Displaying-Polarization-Filters.webp)

Low liquidity allows a smaller trade to cause a disproportionately large price shift, which a single-source oracle then incorrectly reports.

### [How Do CEXs Typically Enforce Rules against Internal Front-Running?](https://learn.greeks.live/path/how-do-cexs-typically-enforce-rules-against-internal-front-running/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Do CEXs Typically Enforce Rules against Internal Front-Running?](https://learn.greeks.live/wp-content/uploads/2025/10/Dissected-Mechanism-of-Decentralized-Finance-Yield-Farming-Utilizing-On-Chain-Asset-Tokenization.webp)

CEXs use strict employee policies, data access controls, and automated trade surveillance to detect and penalize internal front-running.

### [When IV Is Significantly Higher than HV, What Does This Suggest about the Market's Sentiment?](https://learn.greeks.live/path/when-iv-is-significantly-higher-than-hv-what-does-this-suggest-about-the-markets-sentiment/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![When IV Is Significantly Higher than HV, What Does This Suggest about the Market's Sentiment?](https://learn.greeks.live/wp-content/uploads/2025/10/Deconstructed-Digital-Asset-Volatility-Surface-Intersected-by-Impending-Market-Skew-Hedging-Instruments.webp)

IV significantly higher than HV suggests heightened fear or uncertainty, indicating the market anticipates a large, imminent move.

### [What Is Price Oracle Manipulation and Why Is It a Critical Risk for DEXs?](https://learn.greeks.live/path/what-is-price-oracle-manipulation-and-why-is-it-a-critical-risk-for-dexs/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is Price Oracle Manipulation and Why Is It a Critical Risk for DEXs?](https://learn.greeks.live/wp-content/uploads/2025/10/Conceptualization-of-Decentralized-Finance-Oracles-With-High-Frequency-Market-Data-Acquisition.webp)

Attackers manipulate a DEX's price data, which other protocols trust, to steal funds through flawed liquidations or loans.

### [When Is IV Typically Higher than HV?](https://learn.greeks.live/path/when-is-iv-typically-higher-than-hv/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![When Is IV Typically Higher than HV?](https://learn.greeks.live/wp-content/uploads/2025/10/Reflective-Digital-Storage-Medium-Resting-Upon-Advanced-Black-Circuitry-Substrate-Awaiting-Tokenization.webp)

IV is typically higher than HV when the market anticipates future price-moving events.

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**Original URL:** https://learn.greeks.live/learn/why-do-cexs-generally-offer-higher-liquidity-than-dexs/
