Measuring CEX-DEX Extracted Value and Searcher Profitability: The Darkest of the MEV Dark Forest
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arXiv
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| Hauptverfasser: | , , , |
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| Format: | Preprint |
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2025
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| _version_ | 1866908476484091904 |
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| author | Wu, Fei Sui, Danning Thiery, Thomas Pai, Mallesh |
| author_facet | Wu, Fei Sui, Danning Thiery, Thomas Pai, Mallesh |
| contents | This paper provides a comprehensive empirical analysis of the economics and dynamics behind arbitrages between centralized and decentralized exchanges (CEX-DEX) on Ethereum. We refine heuristics to identify arbitrage transactions from on-chain data and introduce a robust empirical framework to estimate arbitrage revenue without knowing traders' actual behaviors on CEX. Leveraging an extensive dataset spanning 19 months from August 2023 to March 2025, we estimate a total of 233.8M USD extracted by 19 major CEX-DEX searchers from 7,203,560 identified CEX-DEX arbitrages. Our analysis reveals increasing centralization trends as three searchers captured three-quarters of both volume and extracted value. We also demonstrate that searchers' profitability is tied to their integration level with block builders and uncover exclusive searcher-builder relationships and their market impact. Finally, we correct the previously underestimated profitability of block builders who vertically integrate with a searcher. These insights illuminate the darkest corner of the MEV landscape and highlight the critical implications of CEX-DEX arbitrages for Ethereum's decentralization. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2507_13023 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Measuring CEX-DEX Extracted Value and Searcher Profitability: The Darkest of the MEV Dark Forest Wu, Fei Sui, Danning Thiery, Thomas Pai, Mallesh Cryptography and Security Trading and Market Microstructure This paper provides a comprehensive empirical analysis of the economics and dynamics behind arbitrages between centralized and decentralized exchanges (CEX-DEX) on Ethereum. We refine heuristics to identify arbitrage transactions from on-chain data and introduce a robust empirical framework to estimate arbitrage revenue without knowing traders' actual behaviors on CEX. Leveraging an extensive dataset spanning 19 months from August 2023 to March 2025, we estimate a total of 233.8M USD extracted by 19 major CEX-DEX searchers from 7,203,560 identified CEX-DEX arbitrages. Our analysis reveals increasing centralization trends as three searchers captured three-quarters of both volume and extracted value. We also demonstrate that searchers' profitability is tied to their integration level with block builders and uncover exclusive searcher-builder relationships and their market impact. Finally, we correct the previously underestimated profitability of block builders who vertically integrate with a searcher. These insights illuminate the darkest corner of the MEV landscape and highlight the critical implications of CEX-DEX arbitrages for Ethereum's decentralization. |
| title | Measuring CEX-DEX Extracted Value and Searcher Profitability: The Darkest of the MEV Dark Forest |
| topic | Cryptography and Security Trading and Market Microstructure |
| url | https://arxiv.org/abs/2507.13023 |