I am an active participant on an exchange that functions in this way. As others have mentioned, this structure does not negate the benefits of speed. Someone

I am an active participant on an exchange that functions in this way. As others have mentioned, this structure does not negate the benefits of speed. Someone else already asked what you would do if there are more buyers than sellers (or vice-versa) in auction. If you're going to allocate randomly instead of using time-priority this is equivalent to pro-rata allocation in expectation. There are already pro-rata markets in the US and elsewhere. This structure does increase transaction costs because I am less willing to make a tight market if I have to hold risk for such a long period of time. > Most of the HFT industry will be redundant. Instead of allocating super smart people on made up problem, they can solve more important social problems (e.g. robotics, curing cancer, aging, space exploration, high growth tech companies). It seems to me that you are overestimating the profits generated by HFT and the number of people employed in this industry. The above is just my probably incorrect opinion.