without middlemen you end up with illiquidity. Also, isn't a new exchange more about getting through regulatory hurdles? You can buy exchange software and put a label on it. Last century, omx powered a lot of exchanges all over the world; eventually nasdaq bought it
No. You're just left with a market made up of the people who are actually interested in taking ownership of the thing being sold rather than middle men. Liquidity is BS. Liquidity is me placing a buy order and having it shoved into exchange A so that market maker can front run my order in exchange B and then sell it to me. But "ooh liquidity!" because it will show up as two trades. In reality there was only one party that had an actual interest in owning the stock.
This is not hard stuff. Imagine if you were looking for a house. Imagine you hired a realtor and were putting in an offer on the house. Now imagine that broker is getting cash payments to share your bid information with a third party who then bids against you on that property. If they buy the house and then turn around and sell it to you, they are middlemen. Sure they never actually wanted the house and only bought it so the could sell it to you but now there's "liquidity!" What's "misinformation" is that you think Citadel is paying hundreds of millions of dollars to retail brokers and is getting nothing out of it.
they pay so they can buy the bid and sell the offer. thats market making. they don't front run. people paid for exchange seats so they could buy the bid and sell the offer. even paid to stand in a certain spot so they could buy the bid and sell the offer many times.
Read what I wrote again. It's about payment for order flow. The hundreds of millions of dollars they are paying to brokers. A seat on the NYSE isn't even a significant fraction of what Citadel pays for order flow. The rest of your argument seems to degenerate into "well other people have paid for special market position before, so it's good that middle men are getting in between". That's not even really an argument.