The Evolution and Awakening of Public Chains: Redefining the True "DEX On-Chain Trading" Standard

In the forest of tombstones in the crypto world, there are countless projects trying to put the “Central Limit Order Book (CLOB)” on the blockchain. From the earliest EtherDelta to the countless challengers who boasted high performance, most of them failed to escape the fate of liquidity depletion or lag.

For a long time, there has been a misconception in the industry: “The order book cannot be done because the chain is not fast enough.” ”**

As a result, public chains are caught in an arms race of TPS (transaction volume per second). From 15 TPS to 1,000 TPS to the 100,000 TPS claimed today. But strangely, even though the chain is already surprisingly fast, top market makers still dare not bring up core liquidity.

The root cause is never speed, but genetic conflict.

The traditional public chain logic pursues “consistent state of the whole network”, while the matching engine pursues “unambiguous time order”. The two are inherently mutually exclusive under the old structure. It was not until the past two years that the emergence of a “new species” of public chains truly broke the deadlock. They don’t simply make the carriage run faster, but completely redesign the underlying “traffic rules”.

That’s what we’re going to talk about today — real on-chain DEXs.

On general-purpose public chains like Ethereum or Solana, it is often not the time you arrive that determines the order of your transactions, but the gas you pay.

Imagine you are standing in the hall of the stock exchange, obviously you raised your hand to buy first, but the person next to you stuffed the recorder with a handful of bills, so his list was inserted in front of you. For transfer settlement, this does not hurt; But for high-frequency markets, this is fatal. This means that every pending and canceling order of market makers is participating in an unpredictable auction.

True on-chain DEXs are launching their first revolution: from Gas Auction to Time Sorting (FCFS) and semantic sorting. **

The new generation of transaction-only application chains, such as Hyperliquid, completely abandon the generic gas bidding logic. They advance the sorting right to the front of consensus:

• Physics Time First: Whoever arrives at the mempool first comes first, completely simulating the physical world on a first-come, first-served basis.
• Semantic Ordering:* This is a more radical step. The bottom layer of the chain can “read” the meaning of the transaction. For example, Cancellation Requests automatically rank before Pending Requests.

Why give the privilege of “canceling orders”? Because in a market with severe fluctuations, if a market maker wants to cancel an order but cannot withdraw due to network congestion, the expired price (Stale Quotes) is eaten by arbitrageurs, which is called “toxic traffic”. Once this risk occurs, market makers withdraw liquidity.

Only by inscribing “cancellation priority” into the underlying protocol, and any validator must abide by this logic, the time granularity of the chain has the “sense of security” required by the financial market for the first time. This is no longer an engineer’s code habit, but an iron law of the chain.

In the past, the order book could not run because the chain allowed thousands of nodes in the network to do “repetitive labor” together. Every action of pending orders, matchmaking, and canceling orders must be executed by the whole network as smart contracts, and the cost exponentially explodes.

Many so-called “DEXs”, in order to solve this problem, choose to be lazy: they set up a server under the chain to run matchmaking, and only write the final transaction results on the chain. This is not called a DEX, this is called a “CEX on the chain”.

True on-chain DEXs choose a third path: the chain is responsible for confirmation, and execution is handed over to the native engine. **

In these new architectures, matching is no longer a smart contract running in the EVM, but a native module written directly in the chain node software.

Network-wide consensus: All validators run the same set of extremely optimized C++/Rust matching code. State dependencies: The order book is stored directly in the chain’s memory, not in the contract store. Result Solidification: Validators do not need to perform tedious contract virtual machine operations on each match, only need to verify the consistency of inputs and outputs.

Here’s a criterion to be clear: How do you tell if an engine is “plug-in” or “native”? ** Look at three hard indicators:

1. Do all validators have to run the same logic?
2. Does the execution result have to be consistent across the network?
3. Does the final state of the chain depend strongly on it?

As long as these three points are met, this engine is equivalent to going on the chain. It is not a private server of the project party, but a part of the public chain itself. There is simply no such thing as an “off-chain shadow order book” that can be quietly replaced.

In the old era of chains, every block confirmation was like a slide. Ethereum has 12 seconds per frame, Solana has 0.4 seconds per frame. But in the eyes of high-frequency traders, 0.4 seconds is still a long “lag”.

The new generation of DEXs is dismantling the “rhythm”. They decouple the execution layer from the consensus layer. The execution layer is responsible for continuously updating markets at millisecond speed and giving users real-time feedback. The chain finalizes these sequences and results at very short intervals.

From a user’s perspective, it’s a leap in experience: real-time liquidity with immutable settlement. ** This three-in-one (execution, consensus, settlement) architecture makes the chain no longer just a settlement tool, but becomes a matching itself.

**If performance improvement is face, then the change in power structure is the inside. **

The essence of CLOB on the chain is to confiscate all the power originally hidden in the black box of Binance and Coinbase servers and make it public. The queuing order is public, the matching logic is open, the buying and selling queue is open, and the execution trajectory is public.

This brings a whole new criterion for judgment: Who is a real DEX? **

As the track heats up, a large number of protocols have begun to call themselves “on-chain matchmaking”. But mixed in there are pretenders like Aster. Aster was a data-striking DEX with a candlestick and depth chart that looked perfect. However, careful researchers have found that its trading behavior has been “mirror synchronized” with Binance’s spot market for a long time. When researchers asked Aster to provide a record of every pending and canceled order on the chain, Aster couldn’t bring it out.

Because it doesn’t have on-chain matching at all. It simply “moves” Binance’s data in the server and then forges the result as a transaction hash and writes it on-chain. Eventually, Aster was directly culled (and now added back) by industry data sources such as DefiLlama.

True transparency is not the transparency of the results, but the transparency of the process. To determine whether a DEX is on a real chain, don’t look at the TPS data on the official website, but look at this ultimate criterion:

**Can a third party take the original event record on the chain and perfectly reproduce every second of the market change of the day without relying on the official interface. **

If your on-chain data can only see “A and B were traded”, but not “When did A place hang”, “B was ranked in the line at that time”, and “Why did C successfully cancel the order”, then this is a black box.

Hyperliquid is considered the new benchmark in the industry precisely because it stands up to this kind of audit. Anyone downloads its node data, reconstructing the history of the entire exchange line by line. This “verifiability” is the soul that distinguishes DeFi from CeFi.

At this point, we’ve seen two core dimensions of a true on-chain DEX:

• Asset dimension: whether it can be self-custodial and whether the funds are always in the hands of users.
• Execution dimension: Whether the matching, sorting, and queue are fully on-chain and can be “replicated and rebuilt”.

But that’s not the end yet. If you use the fastest chain and the most transparent matchmaking, but the project party has a “super administrator private key” that can suspend the contract, modify the rate, or even freeze your account at any time, then this is still not free finance.