Cryptocurrencies are a new and exciting asset class, but trading them can be a bit tricky. That’s because there is no central authority that matches orders, which can lead to problems like price manipulation. A good order matching engine can help solve this problem and make trading cryptocurrencies more straightforward and efficient. This article will explain what it is and why it’s crucial for your brokerage.
Crypto Matching Engine Explained
Like any other financial instrument, cryptocurrency trading is all about matching orders. A buyer wants to buy an asset at a specific price, and a seller wants to sell an asset at a certain price. If those prices match, then a trade can occur.
It’s simple enough in theory, but it can be quite complex in practice. That’s because there are so many different types of orders and so many different ways to match them.
A matching engine software matches asset buy and sell orders. It considers asset price, order type, and order time stamp. The engine will look for the best possible match to execute each trade. If there is no match, then the order stays in the book until it’s removed or changed.
Matching engines are used on many different types of exchanges, including stock exchanges, Forex exchanges, and cryptocurrency exchanges. They are an essential part of any trading platform and can often be the difference between a successful trade and a failed one.
Similar to financial asset matching engines, cryptocurrency matching engines consider the asset’s value, the order type, and the time and date of the order. However, some key differences make them unique.
For one, crypto matching engines need to be able to handle a lot more data. That’s because there are hundreds of different cryptocurrencies, each with its own price and market depth.
Another difference is that crypto matching engines need to be able to handle a lot more order types. That’s because there are many different ways to trade cryptocurrencies, including limit orders, market orders, stop-limit orders, etc.cryptocurrency matching engines
Finally, need to be able to handle a lot more traffic. That’s because the crypto market is 24/7 and often sees a lot of volatility. This is in contrast to traditional markets, which tend to have much lower volume and are only open during business hours.
All of these differences make designing a good crypto matching engine a challenge. It’s not impossible, but it does require a lot of experience and expertise.
At the end of the day, a matching engine is only as good as the people who design it. If you’re planning on launching a cryptocurrency exchange, make sure you have a team of experienced professionals who can build an engine that can handle anything the market throws at it.
How to Get a Matching Engine for Your Brokerage?
If you’re looking for a matching engine for your brokerage, there are a few things you need to keep in mind.
First, make sure you choose an engine that is designed for crypto trading. There are many traditional engines out there, but they might not be able to handle the unique challenges of the crypto market.
Second, make sure you choose a scalable engine. The cryptocurrency market is still growing, and selecting an engine that can grow with it is important. Otherwise, you might find yourself stuck with an engine that can’t handle the increased traffic and volume.
Third, make sure you choose a reliable engine. Choose an engine that has a good reputation for uptime and reliability. The last thing you want is for your engine to go down in the middle of a trade.
Fourth, make sure you choose an engine that is easy to use. The cryptocurrency market is complex enough without worrying about a complicated matching engine. Choose an engine that is designed for simplicity and ease of use.
These are just a few things to remember when choosing a matching engine for your brokerage. Keep these factors in mind, and you’ll be able to find the right engine for your needs.
Some exchanges may choose to develop their own software, while others may outsource this to a technology provider. When it comes to the latter, there are a handful of firms globally that specialize in providing crypto trading platforms and matching engines for exchanges.
Carefully analyze your needs and the needs of your exchange before moving forward with any solution.
Bottom Line
Matching engines are the heart of any crypto exchange. Without a matching engine, an exchange would not be able to function. If you’re planning on launching an exchange, you can choose to build your own engine, or go with one offered by a provider. When choosing a matching engine provider for your brokerage, there are a few things you need to keep in mind. Make sure you choose an engine that is designed for cryptocurrency trading, scalable, reliable, and easy to use. These factors will help you find the right engine for your needs.
