Introduction

SWARM Automated Broker & Liquidity System featuring smart order routing, which can be used stand-alone, or with high throughput exchange solutions for extended market-making capabilities.

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 using best global bid and offer rules, while offering plug-in capabilities for custom logic.

It is quite possible to run up to 20 source connections and 100 pairs on a regular 4 CPU Amazon AWS instance. The system can perform High-Frequency Trades, update order books very fast, and hedge latencies are very low. 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.

Technical Advantages

• Order Book
  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.

• Hedging
  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.

• Synthetic Pairing
  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 that make up the synthetic pair.

• Composites
  The system can construct an index reflecting a basket of pairs with different weightings and dynamically hedge at their respective sources. It can be done by creating a basket with multiple coins in any quantity. The index price will be calculated in real-time and hedged on the underlying assets and reported in detail accordingly.

• Anti Market Manipulation
  In an event where there is a whale large order based on the liquidity available platform, Guard orders hedge order books at a certain distance from the bid-ask spread to prevent wicks caused by thin liquidity on the platform.

• Comprehensive Reporting tools
  Detailed reports with a summary, all trades, and hedges with transaction execution IDs for those hedges, can be generated based on date ranges. Which is very convenient for back-office operations & reconciliations.

• e-OTC
  The feature can support order and execution management to power e-OTC platforms for Crypto & Fiat operations.

Technology

The system is based on a multithreaded architecture, where threads can run fully in parallel with supporting hardware, this allows for multiple threads to be created within a process, executing independently but concurrently sharing process resources. All of the threads either use signals or data caches to communicate, there is no lockstep synchronization so they all run at maximum efficiency and scalability. For example, every pair has its own thread, as does the balance calculator, hedge processor, and so forth.

This ensures an ultra-high performance environment, running multiple processes and bots in parallel. The liquidity sources get aggregated and replicated with programmable parameters e.g price levels, depth, bid-ask spread size, order sizes, etc. into a custom global/macro order book. And then streamed to the target venue (crypto exchange, wallet, e-OTC ).

Customizations

Custom strategies can be developed if required with zero downtime for implementation, by use of custom plugins to run as scripts based on C++ or any other programming language. Market-making strategies can be implemented on the source side to provide a more complex way of replicating order book price levels, TWAP, VWAP, etc.

Connectivity

SWARM is able to integrate with price streams from venues such as FX brokerages, Prime Brokerages, Crypto Exchanges and Commodity Exchanges. Supports the following API connections;

• REST
• Websockets
• FIX 4.2, 4.4 & 5.0

Secure & Fair

SWARM is a self-hosted cloud solution, with full support given to the client’s IT team beyond deployment. All liquidity counterparty relationships are between the client and liquidity providers, hence no hidden commissions or markups.

Alerts

SWARM system requires minimum oversight, it is able to send alerts and notifications based on event triggers to notify any events which may need intervention or monitoring.