Hybrid Microstructure Modeling of Centralized and Decentralized Cryptocurrency Exchanges: A Multiscale and Network-Theoretic Approach

Abstract: This research critically explores the evolving hybrid microstructure of centralized (CEX) and decentralized (DEX) cryptocurrency exchanges by synthesizing insights from contemporary empirical studies and applying advanced multiscale and network-theoretic frameworks. Recognizing that centralized platforms dominate short-term liquidity and price discovery while decentralized platforms enhance resilience and user autonomy, this paper develops an integrative hybrid model that captures the dynamic interactions between CEXs and DEXs across different timescales. Using empirical data analysis, Cox regression, and graph-theoretic modeling, we identify key mechanisms underlying liquidity dynamics, systemic risk propagation, and cross-platform spillovers. The proposed hybrid framework addresses critical gaps in existing crypto-market microstructure research and provides a foundation for designing more robust, transparent, and efficient digital asset ecosystems. Keywords: Cryptocurrency Exchanges, Market Microstructure, Centralized Exchanges (CEX), Decentralized Exchanges (DEX), Multiscale Modeling, Network Theory, Systemic Risk, Liquidity Networks, Crypto Asset Pricing, Hybrid Financial Models.