How We Reverse-Engineered The Chicago Mercantile Exchange

The exchange is a crucial component of the economic system, with various markets built to facilitate buyers and sellers meeting and transacting. The advent of computers and the internet has enabled online trading, reducing transaction times from months to seconds. Building an exchange requires expertise spanning multiple fields, including game theory, computer science, and finance. A centralized exchange platform solves the centralized clearing problem by ensuring market integrity and facilitating trades. However, building such a system is complex, and existing tutorials often focus on high-frequency market making or proprietary trading rather than exchange-side operations. The Chicago Mercantile Exchange (CME) has implemented a successful solution, but its architecture may not be directly applicable to cryptocurrency exchanges due to differences in market characteristics and volatility. Bitwyre aims to address this gap by building a derivatives exchange that offers institutional traders exposure to cryptocurrency price movements without holding the underlying coins, utilizing a cash settlement system and separation of wallet functionalities to mitigate risks. The platform uses SingleStore as its database and Redpanda for streaming processing, aiming to lower latency and improve performance compared to existing solutions.

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