From what I've seen, on-chain transaction times are measured in seconds and minutes, not milliseconds. It's a lot easier when you have time to wait to process a queue.
It depends what you mean by easy. Even if you are using a slow chain, you still have to compete for finite block space, you still have to work out how to risk/matching fast, etc.
With chains built for exchange use, operating them easier, that is why they don't require thousands of engineers. But the actual technical capability of the system is significantly in excess of tradfi exchanges. For example, risk function is real-time on-chain as opposed to EoD settlement. This significantly changes the possible feature set. Once you have built it, it is very easy...the question is why big exchanges rely so heavily on eod processes? The answer is: they are bad at engineering.
The EOD reconciliation (and corresponding inability to settle a position in milliseconds) is a feature - it allows "obvious erroneous trade" roll-back mechanisms, etc.
Very few people want the financial system to be a contractual suicide pact - they want it to be predictable, but when the unpredictable happens - they want the retail and institutional investor to be protected (the HFT players can go beat each other up - no one will really cry about them). And unpredictable can be anything from a power event taking out multiple exchanges in the NJ triangle (Sandy hurricane) to a cyber-attack (never happened yet) to a flash-crash driven by algorithms from multiple HFT driving each other nuts (happened at least once).
So, it is not EOD processes as such, but the ability to pause, assess the entire system holistically, and then correct it before it blows up the portfolios of everyone holding a 401k. So even though the exchanges _could_ got to 24/7 trading, I'd be surprised if we just went away from cyclical 24-hr based windows of settlement.
Right, but EOD also introduces credit risk on the clearing house/bilateral.
Also, I would say that probabilistic finality is one of the main issues that tradfi has with crypto (which also exists in the case of margined exchanges, for the reasons you mention). Market participants expect trades to be final, the idea that they can be rolled back is extremely unattractive.
The reason you don't need to stop the market in crypto is because you don't have EOD reconcliation. If everything settles immediately and the risk engine can keep up with the market then there is no credit risk (there have also been multiple solutions to this problem in crypto, none of them involved waiting until the end of the day to see what happens when they try to cross everyone). The reason they have market halts is to limit credit risk from the market moving in one direction and winners being unable to recover gains from the losers. It is fair to say crypto DEX haven't solved this with ADLs but they start from a better place and the higher level of competition means that innovation to invent new solutions is actually happening. The reason exchanges have shit tech is because there is no competition.
I feel like your comment is baiting because you surely know what happened at LME with trades getting cancelled because they would have caused LME insiders to lose money. Hunt Brothers caused massive issues for clearing house, HK government had to bail out clearing house...there are massive issues with the current system.
I kindof agree that it is unattractive - but the regulators are perfectly happy with "EOD also introduces credit risk on the clearing house/bilateral." if it allows them to protect retail and institutional investors. They'd rather bail out the clearing houses - which they can do - then have the retail investor lose faith in the markets for a generation or 2 - ala the great crash.
So, to your point - yep, it is not final. But it is unattractive _to the market making and prime brokers and similar players_ which the regulators do not care much about.
But it does allow these investors to participate in the markets without losing their shirts - and the lack of such liquidity would impact the market more so than the cost of the risk mitigation - which as you completely correctly noted is not free - both in first and second order terms.
So when the iphone came out and no-one was using it, it wasn't useful? I cannot conceive a reality where I perceived the current state of things as the only things that could ever exist. I do not believe anyone could have that amount of self-regard, it is impossible.
HL has been tested up to $8bn/day in volume. The gap in resources is several orders of magnitude so if big exchanges were doing 1000x more volume it wouldn't matter because HL is literally running with a handful of engineers vs thousands. In reality, HL is doing 25-40% of CME, for example.
so let me get this straight Skippy, you're saying you got better performance and reliability than the LMAX disruptor with Multicast that runs inside many big exchanges?
I have a really hard time believing something decentralized will surpass the the physical limitations of speed of light and low level assembler from C++ optimizations without any GC
also the fact that hyperliquid sequencing of orders is opaque and not opensource, and there is indeed latency in the consensus, I cannot believe yet there are p99 stability in completed transactions
why do you think LMAX disruptor runs inside many big exchanges? have you read some blogs online? LMAX disruptor does not run at "many big exchanges".
Disruptor is written in Java. LMAX itself is a tiny exchange that largely deals with institutions so doesn't have the same message volume as retail facing.
What language do you think validators run? So much stuff that makes absolutely no sense..
Order sequencing is not opaque, that is one of the primary benefits of DEX that aren't decentralized. SOL has issues with sequencing but there are attempts to fix this (Jane Street is one of the places working on this). This is a point that I made above about block space, and isn't relevant for Hyperliquid.
It depends what you mean by easy. Even if you are using a slow chain, you still have to compete for finite block space, you still have to work out how to risk/matching fast, etc.
With chains built for exchange use, operating them easier, that is why they don't require thousands of engineers. But the actual technical capability of the system is significantly in excess of tradfi exchanges. For example, risk function is real-time on-chain as opposed to EoD settlement. This significantly changes the possible feature set. Once you have built it, it is very easy...the question is why big exchanges rely so heavily on eod processes? The answer is: they are bad at engineering.