Self-Match Prevention (SMP) in crypto trading systems is a critical control mechanism engineered to prevent a single trading entity from executing a trade against its own resting orders on an exchange or within an internal matching engine. This feature is essential for maintaining market integrity and avoiding unintended self-execution, which can distort market prices or generate artificial volume.
Mechanism
The mechanism operates by identifying incoming orders originating from a specific entity or trading account and cross-referencing them against that same entity’s existing orders within the active order book. If a potential self-match is detected, the system automatically intervenes by either canceling the incoming order, canceling the resting order, or canceling both, based on predefined configuration rules, thereby preventing the undesirable self-trade.
Methodology
Implementing SMP involves integrating order matching logic with unique client identifiers and a rule-based engine that dictates the specific prevention action. The methodology focuses on ensuring operational integrity, mitigating potential market manipulation, and adhering to regulatory standards, which is critical for fostering trust among institutional participants and maintaining the credibility of crypto trading venues.
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