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DOI: 10.4230/LIPIcs.AFT.2025.26

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

Authors: Fei Wu, Danning Sui, Thomas Thiery, and Mallesh Pai

Published in: LIPIcs, Volume 354, 7th Conference on Advances in Financial Technologies (AFT 2025)

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 for Ethereum’s decentralization.

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Fei Wu, Danning Sui, Thomas Thiery, and Mallesh Pai. Measuring CEX-DEX Extracted Value and Searcher Profitability: The Darkest of the MEV Dark Forest. In 7th Conference on Advances in Financial Technologies (AFT 2025). Leibniz International Proceedings in Informatics (LIPIcs), Volume 354, pp. 26:1-26:23, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2025)

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@InProceedings{wu_et_al:LIPIcs.AFT.2025.26,
  author =	{Wu, Fei and Sui, Danning and Thiery, Thomas and Pai, Mallesh},
  title =	{{Measuring CEX-DEX Extracted Value and Searcher Profitability: The Darkest of the MEV Dark Forest}},
  booktitle =	{7th Conference on Advances in Financial Technologies (AFT 2025)},
  pages =	{26:1--26:23},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-400-0},
  ISSN =	{1868-8969},
  year =	{2025},
  volume =	{354},
  editor =	{Avarikioti, Zeta and Christin, Nicolas},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2025.26},
  URN =		{urn:nbn:de:0030-drops-247450},
  doi =		{10.4230/LIPIcs.AFT.2025.26},
  annote =	{Keywords: Decentralized Finance, Maximal Extractable Value, CEX-DEX arbitrages}
}

Document

DOI: 10.4230/LIPIcs.AFT.2024.22

Who Wins Ethereum Block Building Auctions and Why?

Authors: Burak Öz, Danning Sui, Thomas Thiery, and Florian Matthes

Published in: LIPIcs, Volume 316, 6th Conference on Advances in Financial Technologies (AFT 2024)

Abstract

The MEV-Boost block auction contributes approximately 90% of all Ethereum blocks. Between October 2023 and March 2024, only three builders produced 80% of them, highlighting the concentration of power within the block builder market. To foster competition and preserve Ethereum’s decentralized ethos and censorship resistance properties, understanding the dominant players' competitive edges is essential. In this paper, we identify features that play a significant role in builders' ability to win blocks and earn profits by conducting a comprehensive empirical analysis of MEV-Boost auctions over a six-month period. We reveal that block market share positively correlates with order flow diversity, while profitability correlates with access to order flow from Exclusive Providers, such as integrated searchers and external providers with exclusivity deals. Additionally, we show a positive correlation between market share and profit margin among the top ten builders, with features such as exclusive signal, non-atomic arbitrages, and Telegram bot flow strongly correlating with both metrics. This highlights a "chicken-and-egg" problem where builders need differentiated order flow to profit, but only receive such flow if they have a significant market share. Overall, this work provides an in-depth analysis of the key features driving the builder market towards centralization and offers valuable insights for designing further iterations of Ethereum block auctions, preserving Ethereum’s censorship resistance properties.

Cite as

Burak Öz, Danning Sui, Thomas Thiery, and Florian Matthes. Who Wins Ethereum Block Building Auctions and Why?. In 6th Conference on Advances in Financial Technologies (AFT 2024). Leibniz International Proceedings in Informatics (LIPIcs), Volume 316, pp. 22:1-22:25, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2024)

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@InProceedings{oz_et_al:LIPIcs.AFT.2024.22,
  author =	{\"{O}z, Burak and Sui, Danning and Thiery, Thomas and Matthes, Florian},
  title =	{{Who Wins Ethereum Block Building Auctions and Why?}},
  booktitle =	{6th Conference on Advances in Financial Technologies (AFT 2024)},
  pages =	{22:1--22:25},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-345-4},
  ISSN =	{1868-8969},
  year =	{2024},
  volume =	{316},
  editor =	{B\"{o}hme, Rainer and Kiffer, Lucianna},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2024.22},
  URN =		{urn:nbn:de:0030-drops-209589},
  doi =		{10.4230/LIPIcs.AFT.2024.22},
  annote =	{Keywords: Block Building Auction, Proposer-Builder Separation, Maximal Extractable Value}
}

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Documents authored by Sui, Danning

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

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Who Wins Ethereum Block Building Auctions and Why?

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