A Trade Protocol constitutes a defined set of rules, procedures, and standardized data formats that govern the interaction and exchange of information between participants in a crypto trading system. This structured framework ensures orderly, predictable, and verifiable transaction execution across decentralized or centralized venues.
Mechanism
Protocols specify precise message formats for order submission, quote requests, trade confirmations, and market data dissemination. They dictate communication channels, authentication methods, and the exact sequence of operations required for a complete trade lifecycle. These are often built upon established transport layers like FIX (Financial Information eXchange) or WebSocket APIs, adapted for crypto asset classes.
Methodology
Design prioritizes low latency, high throughput, and fault tolerance, particularly for institutional use cases demanding robust performance. Formal verification methods are employed to ensure protocol correctness and resilience against common attack vectors or system failures. Interoperability standards are crucial for seamless communication and liquidity aggregation across diverse trading venues within the broader crypto ecosystem.
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