To develop an order matching engine that can capably regulate a large network of cryptocurrency traders requires careful planning and precise engineering. Each component of the system must be optimized to perform various tasks on a second-by-second basis.
In this section, we will provide a high-level overview of the Tokenplace system architecture in non-technical terms. This is essentially what the system will look like when we’ve completed the 4 development stages outlined above. To help illustrate how each component integrates into a single, well-oiled machine, we’ll also run through a simple example trade at the end.
5.1 Frontend (UI)
The frontend (Level 1) of the Tokenplace system is what the users (i.e. traders and investors) will be interacting with every time they login to their account. This is the simpler portion of the platform to develop, but it’s nonetheless important because having an attractive and easy-to-use interface is critical in order to onboard large numbers of traders to our platform.
Anybody who’s already experienced cryptocurrency trading on another platform should have no problems adjusting to our trading terminal. It will have buy and sell order books for each cryptocurrency that look more or less the same as they do on other crypto exchanges. Orders will be placed on the books instantly and filled whenever the market price reaches the order price on any of our downstream exchange connections.
5.2 Global Multi-Currency Trading Engine and Network of Exchanges
Each user account will be directly connected with Tokenplace’s global, multi-currency account (Level 2). This is the heart and soul of the platform, as it aggregates all of the user sub-accounts as well as performing the constant optimization problem solving involved in high-volume order matching.
When traders place orders on their own accounts, Tokenplace acts as any typical cryptocurrency exchange does in filling the orders. The liquidity comes from within the platform so that orders can execute nearly instantaneously as soon as the market price and order price are aligned. This system architecture provides a high quality user experience and enables more demanding functions on the platform such as high-frequency trading. For this reason, it’s important that this primary account has adequate liquidity for every cryptocurrency being traded by end users.
TOK will be essential in being able to move cryptocurrencies between the primary Tokenplace account and each of the users’ sub-accounts, as well as Tokenplace’s accounts on each of the downstream cryptocurrency exchanges (Level 3) where price searching and optimization is occuring. In other words, TOK is used for liquidity between each of the levels of the platform.
The smart trading engine is responsible for continuously maintaining optimal volumes for every currency so that there is enough liquidity to execute orders. There will be a constant stream of communication between this trading engine, the user sub-accounts, and the external exchange accounts.
Users will know the best prices available for each cryptocurrency across our entire network of exchanges, and we will be able to quickly execute orders at those prices on the external exchanges while the original orders from user sub-accounts are filled directly from our primary account.
5.3 Detailed Overview
Below is a diagram illustrating the flow of currencies that occurs when a user places a trade on Tokenplace. In this case, the user is trading an amount ‘x’ of Bitcoin (BTC) for an amount ‘y’ of Ether (ETH). We assume that x and y are significant amounts, such that the best available price may be found by splitting the order across various exchanges through Tokenplace’s corporate exchange accounts.
Some extra points to note here:
- From the user’s point of view, none of this complexity is apparent. They simply see that xBTC leaves their account and yETH enters it when their order is filled.
- The order book displays the best available prices for each cryptocurrency as generated by the Smart Trading Engine, which is integrated with each of the TP Corporate Exchange Accounts.
- The solid lines (connecting the User Account to the Liquidity Pools of the TP Primary Account) indicate that the cryptocurrency moves immediately when the order is placed and filled at the best market price(s) available across exchanges.
- The dashed lines (between TP Primary Account Liquidity Pools and the Corporate Exchange Accounts) indicate that the transactions may be delayed relative to the speed of the order execution between the User Account and TP Primary Account.
- It often won’t be necessary to move cryptocurrencies between the TP Primary Account Liquidity Pools and the Corporate Exchange Accounts, especially for small volume orders. One of the key functions of the Smart Trading Engine is to constantly balance each of these accounts (Primary and Corporate) so that they have optimally-sized liquidity pools.
- Tokenplace’s liquidity will consist primarily of TOK and the top cryptocurrencies (e.g. BTC, ETH, BNB).
As you can imagine, increasing the value of TOK relative to the cryptocurrency market as a whole will be very beneficial to increase liquidity on our platform. For this reason, generating such a rise in value is one of the primary components of our business development strategy.