Measuring CEX-DEX Extracted Value and Searcher Profitability: The Darkest of the MEV Dark Forest

TL;DR

This paper empirically analyzes CEX-DEX arbitrage economics on Ethereum, revealing centralization trends, profitability dynamics, and the impact of searcher-builder relationships over a 19-month period.

Contribution

It introduces a new empirical framework to estimate arbitrage revenue without trader behavior data and provides extensive insights into the MEV landscape and market centralization.

Findings

Estimated $233.8M extracted by searchers over 19 months

Three searchers captured 75% of volume and value

Profitability linked to searcher-builder integration and relationships

Abstract

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.