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.