The Automated Arbitrage Strategy of Cross-Cryptocurrency Exchanges

Warodom Werapun, Naratorn Boonpeam, Esther Sangiamkul and Jakapan Suaboot
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Warodom Werapun: College of Computing, Prince of Songkla University, Kathu, Phuket 83120, Thailand
Naratorn Boonpeam: College of Computing, Prince of Songkla University, Kathu, Phuket 83120, Thailand
Esther Sangiamkul: College of Computing, Prince of Songkla University, Kathu, Phuket 83120, Thailand
Jakapan Suaboot: College of Computing, Prince of Songkla University, Kathu, Phuket 83120, Thailand

International Journal of Information Technology & Decision Making (IJITDM), 2025, vol. 24, issue 05, 1521-1537

Abstract: The emergence of decentralized finance (DeFi) allows arbitrageurs to obtain risk-free income from price gaps of cryptocurrency tokens in many global markets. Several automated arbitrage techniques have been invented to profit from single or multiple platforms, including Centralized and Decentralized Exchange (CEX and DEX), triangular, and DEX-Fait. This paper proposes the arbitrage strategy of cross-cryptocurrency exchanges (ASCEX), a novel automated arbitrage strategy for CEX-DEX platforms, to maximize profit and loss (PNL) using a token route searching algorithm. Based on feature comparison, ASCEX outperforms the existing trading strategies available. Our actual trade experiment shows that ASCEX can generate up to 0.95% monthly risk-free profit compared to 0.34% trading on DEX alone.

Keywords: Arbitrage; cross exchange; cryptocurrency; tokens; strategy (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1142/S0219622025500130

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