Second Thoughts: How 1-second subslots transform CEX-DEX Arbitrage on Ethereum

This paper models how shortening Ethereum's slot time to 1-second subslots would change CEX-DEX arbitrage, arguing that faster execution makes arbitrageurs more willing to attempt trades. The simulations, calibrated to Binance and Uniswap v3 data from July to September 2025, find that faster slots increase arbitrage transaction count by 535% and trading volume by 203% on average. For a risk-averse agent with a 35% probability of landing the DEX leg, the paper attributes the rise to reduced variance of successful and failed trade outcomes, which raises risk-adjusted returns. The authors state that observed arbitrage activity may understate latent demand, since profitable opportunities are often skipped because of current confirmation times.