4 ms·

How do you think on-chain exchanges do it? Hyperliquid has 16 employees, not engineers...total employees. It is possible, it isn't going to be possible for many

How do you think on-chain exchanges do it? Hyperliquid has 16 employees, not engineers...total employees. It is possible, it isn't going to be possible for many of the legacy exchanges. I work with a major one and, being honest, from day one it was obvious they were incompetent. They employ a huge number of engineers and are unable to deliver basic features at any reasonable pace. Not even remotely close to it either (as in: you ask them to do something, they say yes, execs say yes, you get a deadline, date comes...deployment difficulties, environment not working, run around goes on and on forever). I remember the CEO got on a call with us at the start and was slapping himself on the back saying they had no downtime...because they were able to do maintenance when markets shut (and have heard very bad things about how that goes). But it is 24/7 world now, our service is up 24/7 and, of course, this led to massive issues in time due to the very different expectations around delivery/quality. Our execs were impressed, our engineers said this was a bad sign. And, ofc, it transpired that they were total amateurs (to be clear, this is one of the biggest exchanges in the world) and were unable to deliver. To come back to my original statement: there is a company of 16 people total who is, from the point of view of customers, delivering features faster. It is difficult to understate how insane that is.

jedberg 5mo ago
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.
- skippyboxedhero 5mo ago
  Fastest ones are processing a block every 10ms. 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.
  - itsthecourier 5mo ago
    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
    - skippyboxedhero 5mo ago
      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.
  - foobar10000 5mo ago
    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.
cgio 5mo ago
The first 90% of features takes 10% of the time to deliver. You are comparing capital infrastructure markets with deep regulatory obligations and multiple stateful interfaces (OUCh/FIX) to retail focused matching engines with a very slim stateless protocol surface (REST).

jedberg 5mo ago

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.

skippyboxedhero 5mo ago
Fastest ones are processing a block every 10ms. 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.
- itsthecourier 5mo ago
  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
  - skippyboxedhero 5mo ago
    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.
- foobar10000 5mo ago
  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.

cgio 5mo ago

The first 90% of features takes 10% of the time to deliver. You are comparing capital infrastructure markets with deep regulatory obligations and multiple stateful interfaces (OUCh/FIX) to retail focused matching engines with a very slim stateless protocol surface (REST).