If there is a central depositary who holds assets instead of exchange & assets are only released when trader sells or withdraw, it will be better.

Sell trade & withdrawal can also be done once trader confirms it by providing OTP received on phone number. This saves stress of an exchange getting hacked, exchange using funds for trading or their own business. Central depositary has only one job to custody the funds. Depository can charge a fee which will be minimal as number of users are in millions.

All ETF’s and Ethena follow this model and keep assets in custodian with tri-party agreement.