Especially in light of the recent troubles with Ethereum's hot ICOs, and the recent massive flash crash, is it time to reconsider the architecture of the cryptocurrency industry?
Traders and investors have believed for a long time that the exchanges are the weak links in the system: "Don't keep your cash on an exchange!" This article from Coindesk talks about the future possibilities that are coming into view.
http://www.coindesk.com/changing-exchanges-will-coinbase-tomorrow-decentralized/
There are a few forms of "decentralized exchange" infrastructure that we can see forming.
The first is a just-in-time trading system where coins are held in escrow for a very brief period and traded directly, within a service that sits over the blockchain. That is, not a traditional limit-book style exchange which holds the assets in your name. This type of service suits itself to cross-currency exchange, but isn't suitable for high frequency trading. It allows for the trading of low-volume assets (or single high volume trades), where the price discovery of a typical exchange is either not suitable or not available. This is less of a decentralized structure than a "slightly less centralized" structure.
The second type of structure is similar to the first, but is built into the coin's infrastructure directly. We typically see this as a wallet-based exchange, like in Waves. The benefit to this format is stickiness towards that parent coin, but with a main friction being that all users have to join onto that coin's service.
A third structure exists which is like the second type, but operates by smart contract. Coin A which is deposited into some address is held in escrow programmatically, and some matching value of Coin B is released to a separate address.
The structure of all these approaches has to be rigorous against a range of bad actors. As the value held or controlled by the exchange goes up, the risk of attack becomes more likely. The timing of trades is also a risk for the exchange and for the traders - in times of high volatility, the exchange carries a risk of value increasing or decreasing during the time of the trade. Other bad actors may incite panic sells through disinformation or denial-of-service attacks. Others may use high volume trades to overwhelm lower-volume assets, moving the price beyond where it would otherwise rest.
Decentralizing the exchange is one small component to dealing with some of these risks.