Accelerating trading system development with Aeron, Hydra Platform and Adaptive (Part II)

5 trading solutions we delivered with Aeron and Hydra Platform

This article is the second in a series of four blog posts on Aeron and Hydra Platform:

  • Part I: History of Aeron and Hydra Platform. Read here >>
  • Part II: 5 trading solutions we delivered on top of Aeron and Hydra Platform.
  • Part III: Aeron and Hydra Platform in a trading platform. Read here >>
  • Part IV: Operating Aeron and Hydra Platform based solutions. Read here >>

In the previous blog post I talked about the history of Aeron and Hydra Platform. Today, I’m going to provide an overview of some of the large scale trading platforms we delivered for our clients during the past three years leveraging Aeron and Hydra Platform.

We have delivered over 75 trading platforms since 2012. The 5 below were delivered on Hydra Platform, and are a small selection of our overall delivery experience. In all of our delivered solutions, our client has retained the bespoke implementation of their solution, resulting in them capturing and owning the value of our delivery.

Power & Gas Marketplace

A leading European energy provider wanted to be a first mover in the transition from voice to electronic power and gas providing 24/7 liquidity to clients.
Adaptive used Aeron and Hydra Platform to deliver an end-to-end cloud-hosted trading platform with matching engine and market making capabilities supporting CLOB, RFQ and click and trade functionality.

With an initial delivery in 4 months the platform provided a first mover advantage to achieve significant adoption and market share.

Collateral trading exchange

Our client, a tier 1 US exchange, had a time sensitive goal to launch a regulatory compliant Repo venue, managing complex products (repo, triparty, packages) and RFQ-based workflows.

Adaptive leveraged Aeron and Hydra Platform for the clients core infrastructure and integration with external systems. In addition we built out their proprietary business logic and trading UI.

An MVP delivery was achieved within 6 months, allowing the investment return to start quickly with the on-boarding of initial clients, and the product to subsequently evolve with rapid iterative deliveries.

We also operate this trading platform for our client as a managed service. This client had extremely strict constraints regarding security and we put a significant effort into the design of the AWS network, storage and infrastructure topology.

Cryptocurrency exchanges

A few firms building crypto exchanges were considering using Aeron Cluster. They realised that we were putting a lot of effort into Aeron Cluster, and reached out. One of them, LGO, was about to build a cryptocurrency exchange. Jean-Baptiste Dusseaut, their deputy CTO, got in touch and we helped them bootstrap their project using Aeron Cluster and Hydra. We usually build platforms ourselves in partnership with our clients, but this one was a bit different. Their development team did all the implementation, while we helped accelerate their delivery with some of our components and support around Aeron and Hydra. LGO has been live in production since March 2019 on Google Cloud.

When you are in the business of creating an exchange, the LMAX architecture is kind of the mandatory inspiration. After some experiments, it felt only natural to use Aeron / Aeron Cluster to sustain our operations. That being said, we were trying to find ways to accelerate our development efforts, and that's when we discovered Hydra Platform and Adaptive.

 

At first, we were convinced that buying Hydra Platform was a good way to avoid a lot of trials and errors on our side, and it did. But soon, we realised that for us, it was the amazing support from Adaptive that was invaluable. They were always available to help us, evaluating our architecture and infrastructure or enhancing Aeron and Hydra Platform given our feedback. In addition, their knowledge is not only technical, they have a lot to say about the domain too. As a domain driven design practitioner, it's a joy to be able to talk about the «why», before the «how».

 

Jean-Baptiste Dusseaut, deputy CTO at LGO

Bond trading platform

A client approached us with a need to deliver a new front-to-back corporate bond trading platform in a short time frame. Adaptive took the lead on the design and development with the MVP delivered in 7 months. Hydra Platform and Aeron Cluster proved the ideal tools to deliver this solution which required a bespoke RFQ-style trading protocol and the ability to respond to market feedback quickly in order to compete. The platform is due to go live in early Q3 2020.

Spot and futures cryptocurrency exchange with ErisX®

In 2019 we developed matching engine software in partnership with ErisX, a Chicago-based cryptocurrency exchange. As this is the most recent platform our customers have launched, I will provide more details about the project.

We successfully delivered a web trading gateway for ErisX in the tail end of 2018. Subsequently, ErisX decided they wanted to replatform their entire core matching, risk and market-data trading systems. Given the large scope, established vendors in the exchange space were invited to pitch. ErisX invited Adaptive to pitch alongside these vendors given our previous delivery success. Adaptive ultimately won the pitch, based on our ability to provide a more flexible solution that enabled ErisX to control their own destiny within the emerging cryptocurrency market; a market in which they believed the winner will be determined by the provider who can innovate most quickly due to market structure or regulatory changes.

We managed to establish confidence that with our experience and Hydra Platform, we would be able to meet the tight deadlines they had to replace their Spot cryptocurrency offering and launch Futures. We set up the relationship to be a strong partnership where we co-developed the platform based on our mutual experience from the technology, business, production support and operation perspective.

Tony Acuña-Rohter, the head of technology of ErisX played a pivotal role in the design and delivery of the platform, acting as an expert product owner while driving functional and technical requirements with our team. Tony worked for many years on the CME matching engine, and we could not have dreamed of a better candidate for the roles he played in the delivery.

The project started early 2019, and Adaptive put together a team with a cumulative experience of 70 years building exchanges and 160 years building financial trading systems. The Adaptive matching engine development team worked hand in hand with the Hydra Platform team and ErisX development team to design and build the platform. We had 8 months to build the platform from the ground up and this was quite a significant challenge, even with such an experienced team.

ErisX migrated their existing clients from their previous system to the new match engine in December 2019 and launched Futures that same month as a CFTC regulated venue. The system is hosted on bare metal using a low-latency network stack (kernel bypass, low-latency switches, etc).

This project was a fantastic personal experience for the Adaptive team and we believe mutually beneficial. It has been a privilege to partner with ErisX and their world class team. We are looking forward to continuing the partnership in 2020 to further enhance the product.

Partnering with Adaptive and leveraging their Hydra Platform enabled ErisX to focus on the business features we needed while accelerating critical infrastructure work to help meet our aggressive timelines.

 

Tony Acuña-Rohter, Head of Technology at ErisX

The five platforms referenced above had a range of market models (Central Limit Order Book, Request for Quote, Auctions and Indication of Interest), response time as low as 100 microseconds for new orders (at 99 percentile), user interfaces for customers and market operators and deployment models to AWS and on premise. All were accelerated by being built on top of Hydra Platform, and four of these platforms are running in production today, with the fifth due to go live later this year.

In part three of this series we will look in more details at Aeron and Hydra Platform and the role they play in trading system architectures.

The series is also available for download as a white paper. In this paper, we provide an overview of Aeron & Aeron Cluster, and look at some of the projects we have developed using Aeron during the past 3 years. We then provide an overview of Hydra Platform which contains some of the building blocks we produced to complement Aeron and further accelerate the development of systems we build. While we do not go into deep technical details, this document is particularly suited for developers, architects and CTOs.

 

Get the white paper

Olivier Deheurles

Co-founder and Chief Technology Officer,
Adaptive Financial Consulting Ltd

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