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Hybrid trading models Meaning

A market architecture that blends the benefits of centralized and decentralized systems. Typically, this involves an off-chain order matching engine (for high speed and low latency) combined with on-chain settlement (to ensure user custody and transparency).

These models aim to solve the "custodial risk" of centralized exchanges while avoiding the slow execution and high gas fees often associated with purely on-chain trading. Users can trade with the speed of a traditional brokerage while maintaining the cryptographic certainty that the exchange cannot freeze or steal their funds.

Hybrid models often utilize automated market makers (AMMs) alongside traditional limit order books.

This allows for deep liquidity for common pairs while still providing the precision required by professional traders for more complex strategies, representing a middle ground in the evolution of financial infrastructure.

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