By creating the kinds of real-time support for liquidity and trading, crypto exchanges can enhance the experience for their investors.
It’s one of the greatest problems bedeviling some traders and investors who wade into cryptocurrency markets, and causing consternation from others on the other side of the desk as well: what do you do when your cryptocurrency exchange goes dark at just the wrong moment?
Unplanned downtime for cryptocurrency and defi asset exchanges is a major problem. It’s especially problematic when these outages happen during periods of high volatility, or when assets are quickly dropping in value. In many cases, that’s exactly when these stoppages occur, because of high volumes of trading and peak traffic that the system can’t handle in real-time.
Causes of Exchange Downtime
To be fair, downtime at an exchange can happen for many different reasons. Sometimes exchanges cite hardware problems or disk failures – sometimes, they attribute problems to a third-party vendor.
Binance, a leading cryptocurrency exchange, is an example of a place where a lot of trading happens – and where sometimes, for an instant, no trading happens!
Reports of outages at Binance have led to quite a bit of complaints from small investors who wonder why multimillion-dollar businesses don’t have practical tools in place to prevent this downtime. In one such case, Changpeng Zhao blamed a “message broker problem”, and in other cases, exchange leaders simply notified users that there was a brief outage, but deposits and withdrawals and other interactions were quickly restored. Another example of the frustration, albeit one outside of crypto, occurred over at Robinhood when the exchange couldn’t serve Gamestop transactions (going in one direction). The outrage was palpable. In crypto, the downtime is a little more anticipated, but it’s still a problem.
Preventing Downtime
By creating the kinds of real-time support for liquidity and trading, exchanges can enhance the experience for their investors.
One of the fundamental parts of preventing system downtime on exchanges involves inspecting the infrastructure and putting additional supports in place. For example, institutional grade crypto exchange AAX, is known for its London Stock Exchange-powered tech stack, which holds an impressive track record within stock trading.
Another aspect of this is reporting: although the rank and file traders often get their reports through sites like down detector, an exchange that is proactive is more likely to offer advance reporting so that investors don’t need to resort to this kind of DIY investigation.
Analysts cite more detailed SLAs and higher standards of availability as barriers to exchange downtime, but the needs of a particular network vary according to the build.
At Atani, low latency and excellent API trading tools create a robust framework protecting the system against unplanned downtime. The API build eliminates any single point of failure, and secure key handling provides peace of mind regarding cybersecurity outcomes.
This type of proactive strategy is an effective bulwark against downtime, but it also protects Atani users against various kinds of hacking. The non-custodial nature of the brokerage transactions also works to the advantage of both parties. Take a look at this platform that aggregates liquidity from 20 exchanges and accommodates trading of many thousands of pairs with tax tools, low trading fees and much more.
next