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CEX-DEX arbitrage captures the price differences that naturally emerge between centralized exchanges and onchain markets. This value is often discussed within the broader category of MEV and typically captured by external participants, which means it is not always modeled as a core component of Layer 2 (L2) economics.
Our extensive 890-day simulation of the ETH/USDC pair shows a different framing. The data indicate that CEX-DEX arbitrage exhibits structural and predictable characteristics, and can be treated as a network-level asset that L2s may be able to capture and monetize natively.
The ETH/USDC pair in a $10M liquidity pool generated roughly $620,000 in cumulative profit over the period.
Sustained profit comes from pairing volatile assets (like ETH) with deep liquidity. (By contrast, the USDC/USDT pair generated almost no profit).
Deeper pools directly increase the absolute profit captured from each opportunity, allowing for larger trades.
The frequency of opportunities increases significantly once market activity (Daily Range) crosses 6%.
Our data shows a large profit opportunity exists. The question is: How do we realize and share this value? Capturing this significant revenue stream requires a predictable and fair execution layer.
Secure Block Building (SBB) is a joint monetization model that connects L2s and searchers to capture and share this value. By providing searchers with reliable and guaranteed execution for their profitable transactions, SBB maximizes the value extracted from CEX-DEX arbitrage.
This allows L2s to move beyond transaction fee revenue and actively benefit from this consistent network asset, all while providing the institutional confidence and regulatory compliance necessary for a robust ecosystem.
This simulation isolated pure spread-based arbitrage. The next phase of our research will expand to include MEV generated from backrunning user transactions and execution costs to model the total, addressable MEV value.
For a full breakdown of the methodology and detailed results:
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