The Coming DEX CLOB Wars: The History and Future of Onchain CLOBs

After years of AMM dominance, Central Limit Order Books (CLOBs) are making their triumphant return to DeFi—this time with the technology to actually make them on par with centralized exchanges. In fact, since the start of DeFi Summer in 2020, the share of DEX to CEX spot trade volume has grown to 20%. Trading is increasingly moving on-chain—it's no longer just a dream or a promise. The CLOB wars have begun.

But what exactly is a CLOB, and why does everyone suddenly care?

Understanding CLOBs: The Foundation of All Trading

Central Limit Order Books are a fundamental mechanism for trading assets. Viewed simply, CLOBs are simply collections of bids (buy orders) and asks (sell orders) that allow traders to express their exact price preferences. This model has powered financial markets since the earliest days of organized trading.

CLOBs remain the gold standard for price discovery and capital efficiency because they:

• Enable direct matching between buyers and sellers
• Allow for precise price expression through limit orders
• Support advanced order types
• Provide transparent market depth and liquidity

When crypto began, the first exchanges naturally attempted to replicate this proven model onchain. However, early pioneers quickly discovered that blockchain technology wasn't ready for the demands of order book trading.

Projects like EtherDelta (one of the first decentralized exchanges on Ethereum) and Kyber Network attempted to bring traditional exchange mechanics onchain.

These early projects were well-designed but limited by the underlying infrastructure: slow block times, expensive computation, and the inability to efficiently update orders in response to market movements.

• EtherDelta suffered from prohibitively high gas fees on Ethereum mainnet, with every order update costing precious ETH
• Kyber had a peculiar model where market makers had to pay for the privilege of providing liquidity— backwards from traditional finance

Unable to make CLOBs work efficiently onchain, DeFi pivoted to Automated Market Makers (AMMs). To bootstrap pools, you essentially have two-sided pools with an altcoin and an asset like ETH or USDC. But AMMs came with drawbacks:

• LPs consistently lost money to arbitrageurs
• Slow price updates led to stale quotes
• Sandwich attacks became endemic on Ethereum

Hyperliquid proved that onchain CLOBs could not only work but dominate. Hyperliquid made history with the largest airdrop the crypto industry has ever seen – one that reshaped conversations around airdrop strategies. Currently, it is the largest perpetual DEX in crypto, dominating the market in monthly volume. What made Hyperliquid different?

• 200ms block times - orders of magnitude faster than early attempts
• 10K+ TPS capability - competitive with centralized exchange throughput
• Onchain orderbook - transparent execution
• $1B+ daily volume - proving real market demand

The on‑chain order book sets Hyperliquid apart from many DEXs that rely on simple automated market makers (AMMs). This allows for CEX-like features including perpetual futures, high leverage, and advanced order types—all while maintaining transparency.

The CLOB wars are here. And DeFi is about to eat CeFi. Teams building onchain CLOBs are now leveraging rollups and data availability layers like Celestia to achieve CEX-level performance.

GTE on MegaETH: The TPS Demon

GTE is the world's fastest decentralized exchange, covering the entire lifecycle of a token – from its initial launch to sophisticated perpetuals trading – all on a single, high-performance platform.

GTE represents the cutting edge of what's possible with speed. Built on MegaETH's 100K TPS infrastructure with 1ms latency, leveraging EigenDA for throughput, they're pushing the boundaries of performance.

Built on MegaETH's infrastructure promising 100K TPS and millisecond latency, GTE integrates:

• Token launchpads for bootstrapping new projects
• AMMs for long-tail price discovery
• Spot and perpetual CLOBs for mature assets
• Cross-venue routing for optimal execution

Their "crankless" design leverages MegaETH's ultra-low fees to eliminate the complex keeper networks that plagued earlier CLOB attempts. Market makers can update orders as freely as on Binance, without worrying about gas optimization. By addressing the technical bottlenecks in performance and infrastructure that currently limit DEX adoption, GTE team is committed to delivering a vertically integrated trading experience.

Bullet on Solana: The Rollup Pioneer

Coming from the team that built Zeta Markets, Bullet tackles Solana's unique challenges. Bullet aims to bring price discovery on-chain. Current Solana DEXs struggle because they update only every 400ms, whereas price discovery happens on the order of milliseconds. Bullet couples near-instant transaction execution along with cancel prioritisation (pioneered by Hyperliquid) to deliver a trading experience that rivals CEXs, whilst remaining transparent and fully zk-verifiable.

Bullet's solution:

• Ultra-high performance rollup architecture
• 3.5ms latency in production
• Dedicated blockspace that doesn't experience congestion from the L1
• Solving Solana's priority fee problem for MMs
• Matching engine is 100% zk-verifiable using SP1/Risc0
• Perps, spot and lending DeFi primitives are built natively into the chain for highest performance

Rise Chain: Infrastructure Built for Performance

RISE takes a radical approach to blockchain architecture, completely rethinking how L2s should work. It’s an EVM Layer 2 delivering 5ms latency and infinite speed while upholding Ethereum's core principles of decentralization.

RISE ran a design experiment: if you were to build an L2 from first principles, what would it look like? They realized that L2s are fundamentally different from L1s. They don't carry the same consensus burden, presenting an opportunity to rethink the discrete block paradigm.

The Shreds Innovation: Unlike traditional blockchains that process in discrete blocks, RISE uses 1ms Shreds, continuous, interrupt-driven processing that enables real-time execution. When the mempool is empty, transactions process instantly.

Key performance capabilities:

• 5ms round-trip latency
• 1ms Shreds
• 50k TPS current capacity, targeting 100k TPS
• Purpose-built for institutional trading applications

What makes RISE unique:

• Continuous processing with instant state updates
• Economic security through slashable sequencer commitments
• Infrastructure that meets institutional performance expectations
• Built to last: Performance today, decentralization tomorrow

RISE testnet is live. Infrastructure that keeps up with real-world expectations.

Hibachi: The Privacy Pioneer

Hibachi focuses not only on speed, but also the significant value of protecting trader privacy after execution. Most traders don't want their positions and holdings to be publicly broadcasted.

Hibachi’s approach balances practicality with privacy:

• 3-4ms trading latency through off-chain order matching
• Post-trade privacy – Orders are matched off-chain. Resulting state updates are encrypted and posted to Celestia, keeping positions private while enabling permissionless exits.
• ZK-verified execution – Each update includes a ZK proof that the exchange logic was applied correctly, without revealing user data.
• Trustless exits - Encrypted data on Celestia ensures users can always withdraw, even if operators disappear

Rather than attempting full encryption during order matching (which would add prohibitive latency and cost), Hibachi protects what matters most: positions, balances, and trading history after execution.

This improvement addresses a real trader concern, safeguarding against the situation where an investor’s public position data makes them a target. While the orderbook itself remains unencrypted for performance, settled positions and holdings stay private.

This is an evolving approach, with potential future enhancements like client-side encryption and trusted execution environments. But for now, they've chosen the sweet spot: CEX-like performance with post-trade privacy that centralized exchanges can't match.

While core contracts are currently upgradeable via an EOA, it's a tradeoff made to enable faster iteration. The long-term goal is progressive decentralization as the system matures.

Why are so many building on rollups + external DA like Celestia? Because most L1s can't deliver CEX performance:

• Distributed validators = 100ms+ latency floor
• Priority fee wars eat MM profits
• Congestion kills reliability

This is why the future of CLOBs is being built on specialized sovereign infrastructure that is optimized for this use case.

• Single sequencers enable millisecond latency
• External DA layers like Celestia provide massive throughput, and EigenDA at 50MB/s (soon 100MB/s)
• Customizable execution allows for trading-specific optimizations

Performance Architecture

This new architecture unbundles the monolithic blockchain into specialized layers, each optimized for a single function.

High-Speed Execution

Orders flow to dedicated sequencers running traditional matching engines on bare metal servers. These specialized systems deliver the microsecond latency professional traders demand, free from the constraints of distributed consensus.

Transparent Commitment

Every trade, order, and state change gets bundled and published to specialized data availability layers. These blobs—cheap, high-bandwidth data spaces pioneered by Celestia and scaled by EigenDA—ensure every action remains publicly verifiable and even the most demanding CLOBs have room to grow.

Cryptographic Trust

Zero-knowledge proofs bridge the gap between speed and security. Modern zkVMs like Succinct's SP1 allow developers to write complex matching logic in familiar languages, then generate mathematical proofs that every trade executed correctly—no trust required.

Secure Settlement

Finally, these proofs anchor to established blockchains like Ethereum or Solana, inheriting their battle-tested security while maintaining sovereign execution.

The truth is, most crypto trading volume still occurs off-chain on CEXs like Binance and Coinbase. Even more importantly, TradFi markets—stocks, bonds, commodities, and other assets—still trade entirely off-chain.

The CLOB wars are capturing existing crypto volume, but more importantly, they're prepared to absorb traditional finance itself.

Retail traders will come to adopt CLOBs not because they love the technology, but because they allow them to trade fast—and win faster.

The CLOB wars are here. And DeFi is about to eat CeFi. With Hyperliquid proving the model, a new generation of builders is pushing the boundaries of what's possible:

• GTE unifying the entire token lifecycle on MegaETH + EigenDA
• Bullet solving Solana's unique challenges
• Rise bringing EVM to sub-millisecond speeds
• Hibachi adding crucial privacy guarantees

The days of accepting inferior onchain trading experiences are numbered. The CLOB warriors have arrived.

As teams race to deliver sub-10ms latency and CEX-level performance onchain, the infrastructure you choose today will determine your competitive edge tomorrow.

Gelato RaaS provides the battle-tested infrastructure to launch your high-performance trading rollup. Get started with Gelato RaaS today