# Trust Dynamics in Cryptocurrency Markets: Centralized vs. Decentralized Exchanges

arXiv: https://arxiv.org/abs/2404.17227 · HTML: https://mlsanity.com/paper/2404.17227/

## Key facts

- Cited by 1 papers in the map (data through 14 Oct 2026).
- First posted on arXiv 26 Apr 2024.

## Built on by (most cited first, 1 of 1)

- [DAM: A Universal Dual Attention Mechanism for Multimodal Timeseries Cryptocurrency Trend Forecasting](https://mlsanity.com/paper/2405.00522/) (2024)

## Abstract (arXiv)

Trust mechanisms diverge between centralized and decentralized exchanges, representing distinct sociotechnical governance paradigms. However, quantifying trust dynamics and their redistribution between these architectures remains empirically challenging, limiting understanding of how institutional shocks affect market behavior. The FTX collapse offers a natural experiment to bridge this gap. Through an interdisciplinary approach combining causal inference and computational text analysis, we find significant price declines and capital reallocation from centralized to decentralized exchanges following the event. While sentiment metrics showed no sharp discontinuities, topic modeling and network analysis of Discord communities reveal that seasonal holiday discourse obscured underlying trust concerns in centralized exchange forums. These findings underscore the fragility of institutional trust architectures and demonstrate how mixed methods can illuminate behavioral patterns during systemic crises, offering insights for exchange risk management and regulatory assessment.