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What is a Cryptocurrency Matching Engine, And How to Use it For Your Business?

Discovering The Crypto Matching Engine’s Particular Features and Potential

Having a matching system in place is crucial for capital and trading markets, as it helps to reconcile orders and apply transaction fees known as spreads.

Especially in the times when electronic trading systems and white label software are largely used to place orders and interact with the crypto market through the internet. Let’s talk more about how a crypto matching engine works.

The Internal Mechanisms

An algorithm is used to pair buyers and sellers based on order book data, which helps to find the best price. There are two algorithms, namely pro rata and FIFO, which prioritise orders differently. 

Matching engines can be centralised or decentralised, with the former being faster. Decentralised engines use peer-to-peer networks to collect orders from various order books that are not on the local console.

Basic Parts

The efficient functioning of various digital modules and systems relies heavily on matching mechanisms. 

The compatibility and overall performance of matching systems, in turn, depend on three critical components of a crypto engine: the speed of processing, pricing strategies, and the security of the entire infrastructure. It’s, therefore, essential to consider these factors before choosing a matching system for a specific digital platform or system.

Rapidity Of Processing

Decentralised engines are considered to be more secure than centralised engines, although they may not perform as quickly. The decision of whether security or speed is more important for a particular situation is ultimately left to the discretion of the developers.

Transaction Costs

Brokerage companies and exchanges impose charges for every executed trade, which are determined by factors such as the spread and the development of matching mechanisms. 

The use of centralised algorithms leads to higher fees due to the increased utilisation of resources and the frequency of order processing. Decentralised peer-to-peer networks, on the other hand, are generally less costly.


Security is of utmost importance when deciding on a crypto engine. Although centralised engines are faster, they are less secure as they operate on a single server and can be the target of hacker attacks. 

Decentralised matching tools, on the other hand, are slower but provide greater safety since they allow for direct network operations between clients and providers.

How To Make the Best Decision?

Determining the operational procedures of your business and executing deals on your platform are the responsibilities of matching engines. The selection of the appropriate algorithm depends on your market knowledge and experience. 

It is crucial to consider the engine’s ability to provide real-time data before making a decision. To improve transaction waiting times and enhance customer experience, one suggestion is to use a first-serve method. The efficiency of operational speed and competitive price discovery algorithms is essential for optimised trading platforms.

The Bottom Line

A digital tool called a matching mechanism is employed to swiftly facilitate transactions by pairing bid orders of buyers and sellers in a market. 

It is of utmost importance to select the appropriate algorithm and engine to operate a cryptocurrency platform, ensuring users receive speedy execution, security, and the most favourable price.

IEMLabs is an ISO 27001:2013 and ISO 9001:2015 certified company, we are also a proud member of EC Council, NASSCOM, Data Security Council of India (DSCI), Indian Chamber of Commerce (ICC), U.S. Chamber of Commerce, and Confederation of Indian Industry (CII). The company was established in 2016 with a vision in mind to provide Cyber Security to the digital world and make them Hack Proof. The question is why are we suddenly talking about Cyber Security and all this stuff? With the development of technology, more and more companies are shifting their business to Digital World which is resulting in the increase in Cyber Crimes.


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