DEX/CEX Arbitrage FAQ

A CEX (Centralized Exchange) is run by people (teams and companies): Binance, Bybit, OKX, etc. You hand control of your assets to that organization. Pros — there is support; cons — possible account freezes, sanctions, bankruptcy.

A DEX (Decentralized Exchange) is run by program code (smart contracts) inside a blockchain: Uniswap, PancakeSwap, etc. You trade directly from your Web3 wallet. Pro — full control of your funds; con — no support, and if you make a mistake funds cannot be recovered.

The essence of DEX/CEX arbitrage is to buy crypto on a DEX and sell on a CEX, or vice versa, earning on the spread (the difference between buy and sell).

DEX and CEX differ dramatically in speed. Blockchains (DEX) are not instant, and the technical complexity of interacting with them lets a human build arbitrage between DEX and CEX — unlike the CEX-CEX and DEX-DEX directions, where spreads are usually closed programmatically by bots.

Most DEXs run on an AMM (automated market maker) — instead of an order book, the price is determined by a mathematical formula based on the reserves in a liquidity pool.

A liquidity pool is a smart contract holding a reserve of two tokens (e.g. USDT and token X) supplied by liquidity providers. When you swap, you add one token to the pool and take out the other, and the price shifts depending on your trade size relative to the pool size. That is why for arbitrage you must check the price for the exact trade volume you need.

A swap is exchanging one token for another right in the DEX smart contract from your Web3 wallet. There are no orders and no human counterparty: you interact with the liquidity pool and the trade executes at the price set by the AMM formula. In DEX/CEX arbitrage a swap is the step of buying (or selling) the asset on the DEX before transferring it to the CEX.

Gas is the fee for executing a transaction or swap on the blockchain, paid to network validators in the network's native coin (ETH, BNB, MATIC, etc.). The fee size depends on network load and constantly changes. On Ethereum gas is expensive; on BSC, Polygon and Arbitrum it is much cheaper. For arbitrage, gas is a direct cost that must be subtracted from the spread. The P2P.Army system calculates fees, but the average gas price can change, so always double-check it.

Slippage on a DEX happens because the pool price shifts as your swap executes: the larger the trade relative to the pool, the worse the resulting average price. In the wallet you can usually set a slippage tolerance — the maximum deviation beyond which the transaction is cancelled. Too low a tolerance causes failed swaps; too high a tolerance risks a bad price or an MEV attack.

Every token is first of all a smart contract with its own unique addresson the blockchain. It is the address, not the ticker name, that uniquely identifies the token. The same token can have different tickers on different CEXs, and conversely identical tickers can belong to different smart contracts. So before a trade always verify the token's contract address to avoid mixing up coins.

A Web3 wallet (MetaMask, Trust Wallet, Rabby, etc.) stores your private keys and lets you connect to DEXs and sign transactions. Before the first swap of a new token you need an approve — a permission (allowance) for the DEX smart contract to spend that token from your wallet. This is a separate transaction that also costs gas. For safety, grant a limited allowance and periodically revoke unneeded permissions.

The same asset can exist on different networks (blockchains): BSC, Ethereum, Polygon, Arbitrum, etc. The choice of network affects the fee, speed and support on a particular CEX. Wrapped tokens— WBNB, WETH, WMATIC — are tokenized versions of native coins (BNB, ETH, MATIC) that conform to the network's token standard and are needed for the native coin to participate in swaps and pools on a DEX. It is critical to send an asset on exactly the network the receiving exchange supports.

1. Find a spread: the token is cheaper on the DEX than on the CEX (or vice versa).
2. Buy the token via a swap on the DEX from your Web3 wallet, paying gas.
3. Withdraw the token on the correct network to the CEX deposit address.
4. Wait for the deposit to land on the CEX and sell the token at the higher price.
5. Calculate net profit = spread − gas − CEX fees − slippage.

P2P.Army checks liquidity pools for different trade sizes so you can diversify: it is safer to enter with $200–500 than to risk your whole capital. Typically volumes of 200 / 1000 / 2000 / 5000 USDT are checked, plus equivalents in WBNB, WETH and WMATIC for the respective networks.

The recommended minimum deposit is from $200 per trade. The Ethereum network needs noticeably larger deposits so that expensive gas does not eat the profit.

The best time for DEX/CEX arbitrage:

• Volatile moments, when coins rise or fall sharply.
• US stock market opening — roughly 16:00 to 23:00 Moscow time.

At other times signals also appear but are fewer and less interesting. So it is convenient to work in the evening and during volatile periods.

Ethereum is not for beginners. If you are just learning DEX arbitrage, avoid Ethereum until you have refined trading on cheap networks (BSC, Polygon). The Ethereum network is expensive, and CEX deposits often take 20–30 minutes, during which the price can change noticeably, and a mistake can cost $50–100. The system calculates fees, but the average gas price changes often, so on Ethereum only enter trades with a profit from $100.

Beginners are often scared by small spreads, but you should count by turnover. The fast BSC network usually lets you complete a trade (buy on DEX, deposit to CEX, sell) in 10–20 minutes. If an average trade brings $1, that is $3–6 per hour and $24–48 per 8-hour day. Working "for a dollar" regularly also keeps you ready to react quickly and capture a large spread. Trades earning $50+ are rare, but in a good volatile period you can noticeably grow capital in a few hours.

The DEX/CEX arbitrage tool compares prices between DEX and CEX for different volumes and networks, accounting for liquidity pools and fees (gas, withdrawal). The DEX signals section sends alerts about new arbitrage opportunities so you can react to spreads quickly. Remember: all opportunities are generated automatically without human verification, so each trade must be double-checked manually.

• Different coins, same ticker — the most common false spread; check the contract address.
• Low liquidity — behind small orders at a good price sit orders 90% cheaper, and you can lose almost the whole amount.
• Deposit or withdrawal disabled — the coin cannot be deposited to the CEX or withdrawn from the exchange.
• High fees — large gas, a high withdrawal fee or a high minimum deposit.
• High volatility and delays— while the transfer is in flight the price can recover 1:1; "bad" exchanges sometimes pause deposits artificially.

Common ways to lose money:

1. RARELY: sending tokens to a wrong address.
2. OFTEN: sending tokens to a CEX that does not support them.
3. OFTEN: sending tokens to a CEX on a network it does not support.

Before each trade check:

• The blockchain (network)
• The token's smart contract address
• Deposit availability on the receiving exchange
• The minimum deposit amount

MEV (Maximal Extractable Value) is profit that bots and validators extract by controlling transaction order within a block. A special case is front-running: a bot spots your swap in the public mempool, jumps ahead of it, shifts the pool price and sells to you higher. To reduce the risk, use a sensible (not inflated) slippage tolerance, private transactions / protected RPCs, and work in cheaper and faster networks.

• Always run your first trades with money you are ready to lose — especially on a new, unfamiliar exchange.
• Never enter with 100% of your deposit. Best is at most 20–30% of capital per trade: that way you won't lose everything and can work new, more profitable signals in parallel.
• Keep responsibility in mind: opportunities are generated automatically, without human verification, and each trade must be double-checked yourself.