Chainfeeds Introduction:
The emergence of CLOBs on Blobs is an attempt to fundamentally solve the performance bottleneck of DeFi, which possesses both the trading efficiency of traditional finance and inherits the trustworthy, neutral, and self-custodial attributes of the crypto world.
Article Source:
https://x.com/0xJaehaerys/status/1935720081318654288
Article Author:
jaehaerys
Perspective:
jaehaerys: In less than two years, Hyperliquid has risen from a startup to a core platform in the crypto trading field, not only occupying nearly 30% of Binance's perpetual contract positions but also approaching half of Solana's fully diluted valuation. Its success does not stem from radical innovation, but from continuously refining a seemingly simple concept: creating a decentralized, self-custodial trading platform with a centralized exchange (CEX) experience. To achieve this goal, Hyperliquid chose to build its own L1 blockchain, meeting low-latency and high-throughput requirements from the bottom layer to support real-time order books, a long-standing technical challenge for DEXs. Ironically, when a trader lost over $100 million on the platform, this event became its best advertisement. The industry saw for the first time a platform that could carry a "high-profit taker flow" - a large number of retail and high-frequency users willing to take orders, which is like a honey pot for market-making institutions that cannot be ignored. It was at this point that the CLOB war officially began. Hyperliquid's success is a strong negation of the traditional AMM model, which has been widely criticized for suffering from Impermanent Loss and sandwich attacks year after year. Now, the industry is splitting into two architectural factions: one pursuing extreme integrated performance with monolithic chain camps (like Solana), and the other a pioneering force building CLOBs on Blobs with a modular concept, attempting to reshape the underlying logic of decentralized finance through layered architecture and ZK technology. The CLOBs on Blobs model represents a fundamental decoupling of blockchain architecture, delegating the three functional modules of execution, settlement, and data availability originally borne by a single chain to independent components best suited for these tasks, ultimately connecting them into a complete system through zero-knowledge proofs. Its core concept is that transaction execution should not occur in a congested public chain's mempool, but should be completed in a high-performance, low-latency off-chain sequencer. Order book matching, execution, and cancellation are all processed in an off-chain environment, achieving millisecond-level latency comparable to CEX user experience. However, off-chain execution also brings the most critical problem: how to verify transaction authenticity? The solution is a data compression and batch publishing mechanism, where all order matching and state changes are packaged and published to blobs in the DA layer (such as Celestia, EigenDA), which do not execute data but only ensure data availability for external verifiers. Next, the system uses zkVM to generate ZK proofs, ensuring all off-chain operations follow protocol rules. Finally, these proofs are submitted to a verification smart contract on L1 and synchronously update the state, achieving true irreversible hard finality. This way, the entire process balances performance while not abandoning cryptographic trust. This is a complete reconstruction of the traditional on-chain trading model and a representative technical route that compromises centralized performance with decentralized security. Although the CLOBs on Blobs architecture breaks through performance bottlenecks, it also brings new trade-offs and security challenges. The most controversial is the dependence on a single centralized sequencer. While this component can provide sub-millisecond matching efficiency, it also becomes a potential centralization risk source. Especially in critical operations like order withdrawal and fund extraction, if the sequencer maliciously refuses to execute user transactions, it could cause significant losses. Therefore, a robust escape mechanism becomes an indispensable security design. Currently, the industry mainly has two approaches: one is a forced inclusion mechanism that allows users to directly send transactions to the L1 contract, forcing the sequencer to include the transaction; the other is forced withdrawal, where users can directly withdraw funds from the settlement layer using published data and proofs. These mechanisms largely depend on fully available data on the DA layer, further emphasizing the importance of the blob layer. Additionally, L2 architecture faces weak composability issues, especially in spot markets, where this form of execution island limits interaction with other protocols. However, in the contract market, vertically integrated platforms like Binance and Hyperliquid have proven that they can form a strong liquidity ecosystem without atomic contracts. Looking to the future, the industry is exploring directions such as decentralized sequencers, cross-chain liquidity aggregation, privacy enhancement mechanisms, and blurring the boundaries between L1 and L2. Ultimately, the platform that will truly succeed is one that can combine the liquidity and user experience of CEX with the transparency, verifiability, and self-custodial attributes of blockchain - it must be fast, trustworthy, and truly decentralized. [Original text was in English]
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