alt Hacker NewsThe 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.
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> they want the retail and institutional investor to be protected
That costs money, indirectly
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.