ErisX Builds Matching Engine and Futures Clearing System from Scratch to Support Innovative Vision for Digital Assets

Based upon decades of collective experience in global futures, equities and options trading, the team at ErisX understands high performance trading architecture and operations. Working with traditional finance and native crypto participants required leading edge technology that looked familiar to institutional investors but also met the needs of today’s digital asset traders. When we embarked on building the solution, we considered speed and throughput, ease of use, reliability, and consistent performance pillars of importance and real-time settlement a priority.

With the launch of our futures market last year, we migrated to a new matching engine that supports our vision of a unified technology platform where spot and futures trade side by side. To meet this requirement, we built the Exchange’s matching engine (TME™) as well as our Clearinghouse’s clearing system (TCS™) from scratch. Making use of the latest in technology advances across hardware, software, and cloud computing, we were able to create a system to trade and clear digital asset spot and futures contracts on a stack built to today’s technology standards. With our innovative platform now in production, below we highlight how we incorporated low latency design and architecture, why we work with open source software and how our platform is built to advance institutional development in the digital asset space.

The Matching Engine (TME™)

To meet the needs of our vision for an enhanced digital asset trading and investing experience, we required a matching engine that would support a unified platform for spot and futures. When setting out to build our platform, we knew our solution needed to be superior to both cloud-based crypto exchanges, and existing traditional exchange technologies that institutional investors utilize today. Drawing upon our collective experience our matching engine incorporates low latency design and architecture and is deployed in a premier financial services data center to enable ease of access, performance, reliability, and security.

In addition to building high performance software, we developed risk mitigating functionality such as self-match prevention, price banding and maximum order sizes to enable efficient market operation and maintain market integrity. Our messaging protocols were also enhanced to provide transparency into our markets and enable robust data analytics. For example we added nanosecond-precision timestamps to all messages published from the matching engine allowing customers to precisely correlate messages across drop copy, order entry and market data feeds.We have also simplified the ability to process market data by always publishing messages in a predictable way with additional FIX tags which provide valuable data about the trade event.

These improvements, along with many others, enable market participants to confidently trade on our matching engine and monitor market data in real-time to respond to complex events.

We were able to achieve our technological goals quickly and cost-effectively in part by using state of the art open source technologies across our FIX Gateways, Reliable Messaging Libraries, and Garbage-free Data Structures. Leveraging all of these open source technologies to create a next generation platform, ErisX has actively sponsored open source work in these projects leading to significant improvements that the community can now use; it is to everyone’s benefit if market participants and the open source community can reduce friction in the building of their own trading technology and connectivity, including to ErisX!

For more information please see:

• Artio — High Performance FIX Gateway
• Agrona — High Performance Data Structures
• Aeron — High Performance Reliable Messaging

The Clearing System (TCS™)

We also built our Eris Clearing clearing system from the ground up to meet the demanding needs of a modern clearinghouse. It is one of the first new platforms for spot and futures clearing developed in decades and includes a non-stop, 24/7 digital and fiat clearing solution that processes every event and maintains customer segregated accounts in real time. Without reservation, we can say that no compromises were made in bringing our vision for a modern clearing system to life.

Our event-driven clearing architecture enables immediate processing of trades and other transactions, in contrast to the overnight batch processes of legacy systems. The underlying ledger, built using double-entry accounting standards, provides the ability to query the state of an account at any point in time. The highly redundant, geographically distributed system design continues operating seamlessly at all times, even if an entire network region were to fail.

Built to advance institutional development in the digital asset space, our offering provides API access for balances and historical account data. This enables users to retrieve clearing account information from their own applications as well as manage and extract information about trading and clearing transactions without having to log into the clearing portal GUI. All data requests are private and authenticated, with the ability to filter, sort, and paginate results using custom queries.

We have included the capability for individual clients to have multiple accounts and sub accounts, in order to structure their assets accounting any way they require. Account activity reports can be downloaded in CSV format on demand instantly via the client portal, or at the end of each day via secure file transfer. As a regulated exchange, we make it easy for our clearing members to stay compliant by providing daily and monthly statements that contain all pertinent information regarding settlement and movement of assets.

Strict internal procedures govern asset withdrawals and provide additional protection to our members. We have built in a multi-level administrative approval process and secondary cryptography-based authentication for sensitive operations such as adding new wallet addresses and bank accounts for receipt of withdrawals, or initiating withdrawal requests. These additional safeguards, along with state-of-the-art blockchain security, work together to ensure the safety of our members’ assets.

What This Means

We are extremely proud of the work our team has done to build out our trading and clearing systems. Similar systems to the ones we have built in under a year have, in some instances, 100x the employees working on them and cost orders of magnitude more to build. Operating in a nascent and evolving market such as digital assets, it is important for our technology to be nimble and flexible to meet the market’s changing needs. We chose to develop our platform for extensibility to meet the dynamism of digital assets, but we get the added benefit of the ability to support multiple products and tenants, enabling us to support the growth of innovative products, in traditional and digital markets, front to back from trading to clearing.

Our proprietary matching engine and clearing system were built from day one to maximize benefits of open source software, support multiple products and tenants, as well as perform in ways that institutional investors expect and retail intermediaries require. The launch of our unified platform for spot and futures on digital assets is just the first step in the next chapter of our journey. We will be welcoming partners such as futures commission merchants and brokerage houses into our market soon and are thrilled to see our intermediary-friendly vision bring familiarity and conventionality to the maturing digital asset space.