The new mechanism allows orders to be processed as they are opened without having to place orders in a pending queue.
The Bitstamp cryptocurrency exchange has introduced a mechanism for matching orders from the technology provider of NASDAQ stock exchange – Market Technology. Bitstamp claims to be “the first major crypto exchange to use a trading engine like traditional stock exchanges.”
The press release says that the new engine will allow the exchange to meet the high level of demand even during sharp jumps in trading volume. The new mechanism processes orders as they are opened, without placing orders in a pending queue.
“The client can be confident that the order placed by him will either be executed immediately or not be accepted at all, because the order cannot be agreed at this moment – a significant advantage for private and institutional traders who need to make decisions about their orders within a split second, ”the exchanges wrote.
The new trading engine is an improved version of the mechanism from Cinnober (acquired by NASDAQ in 2018), which the exchange already uses. According to a joint study by Bitstamp and cryptocurrency data provider Kaiko, the new mechanism allows orders to be executed 1250 times faster and increases the platform’s throughput by 400 times compared to the previously used solution.
The management of the exchange believes that high-frequency traders will receive the greatest benefit from the introduction of the new engine, and the updated infrastructure will allow Bitstamp to deploy new types of orders and trading pairs at any scale.
Bitstamp plans to gradually improve the performance of its platform over the next three months. The company’s specialists believe that the exchange’s API has the greatest impact on the trading speed, where the new mechanism will reduce the execution time of an order to one millisecond.