A trading engine is the core software component of an exchange responsible for matching buy and sell orders for financial instruments, including digital assets. This system processes incoming orders, maintains the order book, and executes trades based on predefined rules, such as price-time priority. It requires high speed, low latency, and robust fault tolerance to handle large volumes of transactions efficiently. The performance of the trading engine directly impacts an exchange’s operational capacity and user experience.
Context
The efficiency and reliability of a trading engine are critical factors for cryptocurrency exchanges competing for market share and user activity. A key challenge involves scaling these systems to handle extreme market volatility and sudden surges in trading volume without experiencing downtime or performance degradation. Ongoing advancements focus on optimizing matching algorithms, enhancing security features, and ensuring seamless integration with other exchange functionalities to maintain a competitive edge.
High-throughput perpetual DEXs surpassed $1.43T in monthly volume, validating specialized app-chain and Layer 2 architectures as the future of on-chain derivatives.
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