Kuru Labs: Building the Next Generation on-chain Trading Platform

Recently, a startup project Kuru Labs, dedicated to building an on-chain order book trading platform, announced the completion of a $11.5 million Series A financing round, led by a well-known investment institution, with participation from several industry-renowned individuals. The funds will be used to expand the team size and achieve the goal of deploying a fully on-chain order book on a high-performance blockchain.

Kuru Labs was established in 2024 by a team with experience in high-frequency trading, DeFi protocol development, and on-chain system optimization. The project aims to create a decentralized trading platform that is entirely based on blockchain and features both an order book and automated market-making functionality. This concept is not merely a simple improvement of the existing framework, but rather starts from the ground up, combining the advantages of current mainstream models to recreate a spot trading system on-chain that is closer to the experience of centralized exchanges.

In terms of technical architecture, Kuru attempts to build a hybrid system that combines an order book with automated market-making capabilities. The core idea is to introduce a default automated market-making algorithm into the on-chain order book of each trading pair, allowing users to still receive basic quote support in the absence of active liquidity providers. This design does not rely on centralized market makers to maintain market liquidity and is also different from the uniform constraints of automated market makers (AMM) on price curves, but rather provides the possibility of flexibly switching between the two.

In terms of operation, Kuru has designed an order management mechanism suitable for on-chain environments. The submission and cancellation of limit orders use low and predictable gas costs, allowing market makers or strategy traders to operate frequently without being restricted in efficiency by high costs. The team is also developing a passive liquidity mechanism that allows ordinary users to support liquidity through strategy contracts without having to manage their own orders.

Kuru chooses to deploy the platform on an emerging high-performance blockchain. This blockchain utilizes a parallel architecture and pipelined scheduling mechanism to enhance processing capacity per second and reduce block generation latency. Internal test data shows that this chain can achieve a processing capacity of 10,000 TPS in a controlled environment while maintaining a one-second block generation speed. Kuru relies on this foundational performance to build a fully on-chain and scalable matching system.

Although Kuru's technical architecture is somewhat cutting-edge, the project also faces practical limitations. The chosen blockchain mainnet has not yet been launched, and its on-chain performance and network stability have not been verified in a public environment. Kuru's product design relies heavily on the real-time and predictability of on-chain transactions; if the underlying infrastructure cannot be delivered on schedule, it will directly affect the platform's launch pace and the feasibility of its core functions.

The hybrid order book model built by Kuru is currently in the early stages of market validation. This model attempts to provide a new on-chain option between existing AMMs and centralized order books, making market-making behavior closer to traditional trading systems while retaining the openness and composability of decentralized protocols. Ideally, this architecture can not only cover mainstream trading pairs but also serve long-tail assets, thereby providing a unified trading infrastructure for various asset types.

However, there are still a number of uncertainties at the current stage. The first is the risk of technology realization. Although the design goals of the underlying blockchain are attractive, there is still a gap between the white paper and the actual operating environment. On-chain throughput, transaction confirmation, node synchronization, and other dimensions may become limiting factors. The second is the actual motivation for user migration. Currently, most on-chain trading users have formed a habit of using AMM platforms, and it is not easy to persuade them to switch to an order book model. Although Kuru supports a simplified liquidity participation method in its mechanism, the actual results still need time to observe.

Overall, Kuru Labs' attempts represent a new direction for the development of decentralized exchanges, and its success or failure will provide valuable insights for the entire industry. As the project progresses, we will be able to see more clearly how this innovative model performs in practical applications.