Even if they address all the issues and create a real decentralized product, exchanges still will have the overhead of replaying not only the steem blockchain, but also filtering out the steem engine related transactions, which will take considerably more time on itself.
They can do this, and it currently takes about three days if they already run steemd. There are improvements to speed that up. Or, they can bypass this option and just replay the sidechain from a block log which takes less than an hour.
This is a viable, safe option because checkpoints can be verified, in theory, although a little work is still needed right now to ensure this option is cryptography verifiable. But we’re talking about the hypothetical scenario where they’ve solved all of the decentralization issues, so checkpoints will be addressed too.
Thanks for those insights! Definitely interesting to see where everything is heading.