Think of yourself like a trader. You have made an order to sell Bitcoin for $11,000 and to purchase it for $10,000. Both of your commands have already been carried out when you least expect it! How did this take place?
Despite what you may believe, there is a lot more going on than merely filling your orders at the greatest costs. In this essay, the order matching engine — the brains of every Bitcoin exchange — will be examined. We’ll go through its operation and the reasons it’s essential to ensuring prompt and correct order execution.
How Does It Work?
The software that matches buy and sell orders on a cryptocurrency exchange is known as an order matching engine. It serves as the foundation of any exchange and enables buyers and sellers of cryptocurrencies to transact quickly and effectively.
By continuously scanning the order book for new orders, the order matching engine operates. When an order comes in, the engine will make an effort to match it with an existing order in the book. If there are no orders that match, the order will be added to the order book and held there until another order comes in that matches it. In the event that a match is discovered, the transaction will be carried out and both parties informed.
A crypto matching engine must be capable of processing a large number of orders quickly. Incorrect or malicious commands must also be handled by the engine. Because of these factors, creating an order matching engine is a difficult undertaking.
Order matching may be accomplished using a variety of algorithms. First In First Out (FIFO) is the most often used algorithm. Simply matching orders depending on the time of receipt is what this algorithm does. The first order that can be matched with the first order that arrives will be done so.
The Price Time Priority (PTP) algorithm is yet another popular choice. Both the price and the order-delivery time are taken into account by this algorithm. Although it will favour older orders, it will match orders based on pricing. Thus, orders are kept from spending too much time waiting in the book.
Depending on what the exchange requires, a certain algorithm is chosen. Others may need to make sure that all orders are matched equitably, while certain exchanges may need to swiftly match a large number of orders.
The Order Book’s Function
A compilation of all buy and sell orders submitted to an exchange is called the order book. Incoming orders are matched with current orders using this database, which is maintained by the order matching engine. You might think of the order book as a collection of orders.
The purchase side and sell side of the order book form two separate sections. A list of the orders that buyers or sellers have placed is present in each half. The lists are arranged in order of the order’s cost.
It is a crucial tool for traders since it informs them of the market’s status at any given time. It may be used to place orders, keep an eye on positions, and monitor price changes.
How Do I Locate a Reliable Order Matching System for My Business?
When searching for an effective order matching engine for your bitcoin exchange, there are a few factors to keep in mind. The first is quickness. The engine should be as quick as possible. An engine that can rapidly and effectively match orders is what you desire.
Accuracy is another factor to think about. You need an engine that can accurately match orders. You won’t need to be concerned about commands being out of sync since a competent engine will be highly accurate.
In the end, you want a dependable engine. You don’t want an engine that may malfunction or crash. A good engine will be able to handle a lot of traffic and keep running even when under a lot of strain.
What Is The Best Order Matching Engine Currently Available?
The B2Trader from B2Broker is among the top selections out of a few others. This engine has a solid track record, is intended for performance, and is reliable. It is extremely precise and can handle high volumes of traffic. You won’t have any problem getting started because it’s simple to use and set up.
The B2Trader from B2Broker is an excellent choice if you’re searching for an efficient solution. Its matching engine is quick, trustworthy, accurate, and simple to use. The engine can process 10,000 orders per second starting at 0.05 milliseconds for request time. Additionally, the engine requires less downtime for maintenance and operates continually. Furthermore, because the solution comes in three different packages, you may choose only the features you truly require.
So, if you’re searching for a reliable order matching engine for your bitcoin exchange, the B2Trader from B2Broker is a great choice.