I agree with you! I made a proposal for a first step to creating such a exchange. See this post . Feel free to contribute to the idea, I am still working out a more detailed plan and I may have a meeting planned with an member of IOHK to discuss this topic.
The general initial idea is to create a market making SDK. The ultimate goal is a P2P network (not the current blockchain) that is fast. Nodes on this network act as brokers and settlement is made on the SL (maybe a hydra chain is needed for faster settlement and efficient market making). The reason I want to speak to an member of IOHK is because a lot of infrastructure is already being build, it is bad to try to create infrastructure that is not compatible in the future and is perhaps already there!
Again, If you have any knowledge that you would like to contribute, I welcome you into the project! My aim and intent is to make it opensource and cost efficient (create a framework/infrastructure for efficient market making and trade in a decentralized manner). A good insight that I had it the following, decentralization is equivalent to two things, 1) A non custodial system, individuals can be responsible for their own funds. 2) The system is permisionless and censorshipless. Both can be reached in a P2P setting (layer 2) which leverage’s the security model and power of hydra. I think that maladex is going into this direction as well and I recommend reading their whitepaper that completely destroys AAM’s like uniswap. We need to go back to the core of the tradition financial market, where price discovery is found in a competiive way of market making (this model is very well understood, highly scalable/parallizable). Also it is more cost efficient since there is a competition. Another good aspect of this model is that liquidity can be used along the full stack of liquidity providers (The maladex rightfully points this out in their paper).
There is real innovation there in the EUTxO defi world, this will create further adoption and will bring in big players like Jane street, IMC, Optiver and Flow Traders (these are all market makers that compete for the best price discovery).
This model also makes a better bridge with compiance. Market makers can act for others (if they trust that party) and ask for KYC. I think that the old defi trade model is still good, but not for large scale. It is a niche market for low volume/liquidity assets.
Looking forward to you reply and if you have more questions let me know