Introducing our latest patent-pending innovation – the Swarm™ Market Making Bot System featuring smart order routing, which can be used stand-alone, or with the Modulus Exchange Solution for extended market making capabilities. This combination of innovation has been heralded as the most flexible liquidity solution in the digital exchange industry.
The revolutionary smart routing system offers a complete aggregation and reconstruction of a global order book from multiple sources, including exchanges and liquidity providers. It also performs dynamic hedging of trades every fraction of a second, while offering plug-in capabilities for custom logic.
Notably, this solution is best suited to latency exchange models with order books. It runs at a refresh rate speed of 100 milliseconds, which can be halved if the system is hosted on the same server as the matching engine, making it the perfect companion to the Modulus matching engine, though it is also offered as a standalone solution. With low hedge latencies, this system provides an added benefit in a potentially volatile market. For example, every 100 milliseconds in the crypto markets could cost a basis point of profit or loss.
The system is based on swarm architecture, as it runs multiple processes and bots in parallel, aggregating a pool of liquidity from various exchanges and liquidity providers utilizing connectivity, including web sockets, FIX 4.2, 4.4 and 5. The sources of liquidity are aggregated and reconstructed into a macro order-book before being streamed to the target exchange with programmable parameters.
A state-of-the-art solution, it can be utilized as a stand-alone plug-and-play system for market making, or it can be used in conjunction with the Modulus Exchange Solution in order to offer the most flexible market making system available, while minimizing risk.
Known for developing the most customizable solutions in fintech, the Swarm™ Smart Order Routing System is no exception. The liquidity stream can be completely customized to fit the needs of the target exchange, including how the book is constructed; order sizes; and the levels, depth, and width of spread. Strategies can even be customized utilizing a plugin to run scripts based on C++ or other programming languages. Additionally, market makers can implement market making strategies on the source side to provide a more complex way of replicating order book price levels, TWAP , VWAP, and other such variables.
Unlike most white-label exchange providers, Modulus doesn’t participate in the standard markups associated with providing liquidity solutions. Modulus doesn’t engage in back-end deals with providers, and takes neither royalty nor commission from them.
In essence, this means that clients receive technically optimized architecture which better fits their needs than anything else on the market, as it can leverage the full potential of the matching engine without any bottlenecks --- all at a lower cost than alternatives.
The solution can use a single source exchange or liquidity provider, or an aggregated book from multiple sources. It allows multiple bots to run for the same pair (such as BTC/USD), and exchanges can define an unlimited number of bots running the same pair with different sources and different profit margins/spreads/order counts at different refresh intervals.
The system works on net position/exposure. At any time if it identifies a surplus or deficit, it executes a counter order at the best possible price from any source that feeds that pair. It is an extremely fast and continuous process, which does not stop until it can achieve a zero position, guaranteeing that the market maker is always hedged, as long as the sources are connected.
Also, in case of multiple trades occurring at the very same interval, since the bot works on net position, if those trades cancel each other, it will not perform any hedges and will not pay any fees to the source exchange or liquidity provider.
The system can define any synthetic pair A/B, as long as it has A/x and x/B source pairs available. For example, it can define BTC/TRY if there is BTC/USDT and USDT/TRY available to the bot as sources. In that case, any trade will be hedged on two source pairs which make up the synthetic pair.
The system uses individual threads for every single process. For example, every pair has its own thread, as does the balance calculator, hedge processor, and so forth. This ensures ultra-high performance. All threads either use signals or data caches to communicate. There is no lockstep synchronization, so they all run at maximum efficiency and scalability. It is quite possible to run 20 source connections and 100 pairs on a regular 4 CPU Amazon AWS, for instance.
Contact us today to schedule a demo, and prepare your exchange or trading firm for maximum profitability. See the Modulus Difference in action.