The Future of DeFi Trading: Routers, Perps, and MCP | Eugene Chen

Solana's sequencing has become increasingly extractive; this episode examines MCP's uncertain fix and Ellipsis Labs' plan to ship native on-chain perpetuals despite market and technical headwinds.

Key Takeaways

Protocol incentives—not individual validators—have driven more extractive sequencing on Solana, creating centralization pressure and predictable validator behavior that risks user-unfriendly outcomes.
MCP could disintermediate block-building extraction and reshape revenue, but its design and business impacts remain uncertain; interim solutions (sidechains, custom sequencers) will persist.
Ellipsis Labs’ Phoenix will launch native on-chain perpetuals (private beta with thousands); mainnet timing is TBD, and the team rejects token/airdrop incentives to preserve product-market clarity.
Combining application, router, and liquidity (orderbook + proprietary AMM/MarketMaker splines) improves execution; Jupiter dominates routing but must open to new liquidity methods to stay competitive.
Technical realities—chain downtime, latency, SIMD token improvements, and higher compute limits—affect perps viability; teams must plan for outages and potential sequencing attacks.
Market vs. regulator trade-off: markets often build fixes (e.g., MCP, MCP-adjacent tools) before rules; regulators could ban harmful practices, and users will migrate if extraction persists.

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