Numerous cryptocurrency exchanges exist currently, but some possess functional matching engines. The absence of good matching engine results in substantial wait times and order book lags for users. A well-designed matching engine effectively handles a high volume of orders, reducing user wait times and ensuring that the exchange meets market demand. Users may face extended wait times, and order book lags without a reliable matching engine.
A reliable exchange Matching engine must handle a vast volume of orders per second and users while validating substantial amounts of data with low latency. These characteristics are essential as customers seek alternatives if the exchange is unavailable. Furthermore, the trade engine must efficiently process orders, accommodate many users, and guarantee high reliability.
The Exchange Matching Engine vs. Traditional Financial Markets
Cryptocurrency exchanges differ from traditional markets in the volume of orders they must manage. The sheer volume of trades necessitates a robust engine capable of handling the increased order flow. Binance, for example, processes 40 times more trades than the New York Stock Exchange. Moreover, the swift price changes in the cryptocurrency sector require near-instant order execution. Delayed order matching may render a trade unprofitable, underscoring the importance of a timely and efficient matching engine.
Why Is It Beneficial?
A proficient order book matching engine can significantly boost user acquisition and retention, trading volume, and revenue for an exchange. This engine streamlines the process of finding optimal prices and fast trade executions, leading to an increase in trading volume and revenue. Moreover, it facilitates a more liquid market by providing superior price identification and execution, enabling participants to trade at the most favorable prices and minimize associated trading costs.