TL;DR
- Crypto liquidity and high-frequency trading (HFT) are increasingly moving on-chain
- As on-chain performance improves, the key challenge is achieving fast, secure transaction signing without trade-offs
- The future of crypto trading is hybrid, spanning both centralized exchanges (CEXs) and decentralized exchanges (DEXs)
- This future will be enabled by infrastructure that delivers ultra-low latency, enterprise-grade security, and unified execution
- Firms that successfully build and deploy this infrastructure will define the next generation of crypto trading
For years, token projects followed the same routine. Raise funds, pay high listing fees, and hope for a big debut on centralized exchanges like Binance. Market makers built their businesses around helping projects succeed in that model. Liquidity lived inside CEXes, and almost everything depended on them.
That world is changing fast, not because of token launches, but because trading venues and trading volume are moving on-chain.
Trading venues (and volume) are moving on-chain
Venues like Hyperliquid, Aster and Jupiter are now hosting serious liquidity, global participation, and increasingly sophisticated trading strategies. Some major projects are choosing to launch directly into on-chain liquidity, but the deeper shift is that professional trading activity itself is migrating away from CEXs.
Liquidity is no longer confined to centralized order books. It is moving on-chain.
As on-chain processing times move from seconds toward milliseconds, the competitive dynamics change completely.
In this new world, the fastest trader wins.
Execution speed directly impacts fill quality, slippage, and profitability. Latency is no longer a technical detail, it is the deciding factor between capturing an opportunity and missing it.
High-frequency trading in DeFi
Market makers and asset managers are used to running extremely fast systems. Traditional high-frequency strategies rely on microsecond-level execution, co-located servers, and stable environments. None of that exists on typical decentralized rails. On-chain activity can be slow, noisy, and unpredictable.
This is why bringing high-frequency strategies into crypto has been so difficult. The opportunity is real, but the technical foundation has not kept up.
This evolution turns one question into a critical bottleneck: how fast can a transaction be signed and confirmed, while maintaining enterprise-grade security? There is usually a huge trade-off between both.
Systems designed for maximum security like MPC, hardware wallets, or enterprise custody solutions, often introduce latency. Signing a transaction securely across multiple parties or devices can take hundreds of milliseconds or even seconds. On the other hand, low-latency signing approaches often require sacrificing some of that distributed security, placing greater trust in centralized endpoints or exposing private keys in memory for brief periods.
For traders, now executing high-frequency trades or perps orders, this tradeoff directly impacts performance, and with that, their value proposition and revenues. Every millisecond counts: slower signing can increase slippage, reduce fill quality, and cause missed arbitrage opportunities. The challenge is designing infrastructure that delivers both ultra-fast execution and enterprise-grade security, eliminating the compromises that have historically slowed wallets down.
For traders, especially those running automation or high-frequency strategies, latency at the execution layer becomes a direct tax on performance. Zero-latency execution and high-speed signing become essential ingredients, not optional features.
This is exactly why infrastructure that optimizes signing, routing, and finality starts to matter more than ever.
The industry now needs infrastructure that works across CEXs and DEXs
We are entering a hybrid world. Trading teams want to tap both centralized and decentralized liquidity. They want the speed of CEXs and the transparency of DEXs. To make this possible, they need infrastructure that closes the latency gap and simplifies execution, including at the signing layer.
This is the space Sodot focuses on. Our team works with market makers, funds, and trading desks that want to expand into crypto without fighting the limitations of current networks. Sodot removes many of the barriers that made high-frequency trading on DEXs unrealistic. We provide low-latency signing with enterprise-grade security so that teams can focus on trading.
Why this shift matters
The move toward on-chain liquidity reflects something bigger. It shows that the market is moving beyond the old centralized model. Liquidity is becoming more open. More of the trading lifecycle is visible on-chain. More builders are choosing freedom instead of expensive listings. And more institutions are realizing that crypto requires new infrastructure, not just an adaptation of old systems.
What the infrastructure of the future looks like
If you are building or running a trading business today, here are the capabilities that increasingly define competitive advantage:
- Unified liquidity access
Connect to both centralized and decentralized venues without duplicating infrastructure. - Low latency everywhere
Execution paths and signing flows fast enough to support HFT-level strategies. - Enterprise-grade security
Strong key management and transaction controls that remain stable under heavy volume. - Scalability across chains and assets
Support for new chains and tokens without long integration delays. - Operational visibility and control
Full transparency into all trading operations, on-chain or off-chain.
The future is crypto native
More projects are launching directly into on-chain liquidity. More trading activity is moving on-chain. More wallets are turning into trading platforms. And more firms are demanding infrastructure that gives them speed, security, and control across the entire execution pipeline.
Sodot was created for this moment. We help teams operate in this hybrid world with the performance they need and the trust they expect. The trading firms that invest in this type of infrastructure today will shape the next generation of high-frequency trading in crypto.
Reach out for a demo with our security experts, and check out Sodot's blog and social channels to stay updated on the latest in security and industry trends.
