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How CEX.IO Spot Trading works: Explained on pineapples

CEX.IO

Cryptocoins Exchanges / CEX.IO 24 Views

CEX.IO Spot Trading, formerly known as Exchange Plus, stands as the preferred platform for users seeking a seamless experience in purchasing and selling digital assets. Our award-winning trading platform embodies cost efficiency, while offering a suite of trading tools designed to cater to both beginners and established traders.

The foundational reason for deciding to update our Spot Trading platform was to provide our customers with deeper liquidity. Compared with our legacy CEX.IO Exchange, we’ve achieved this goal. However, we continue working to improve our approach to make your trading journey even smoother, and more productive.

Sometimes our community members ask how this deep liquidity is achieved, and what’s under the CEX.IO Spot Trading hood. Given the recent rebrand of Exchange Plus to Spot Trading, we think it’s the perfect time to reintroduce our trading platform, and share some insights.&

Since everyone comes from a different background, and level of experience,& we’ll combine the ELI5 (Explain Like I’m Five) approach with a few technical details. And we’ll use pineapples as an accessible example. Yummy!

A pineapple delivery network (liquidity sources)

What do you do when you want to buy a pineapple? Typically, you go to the closest grocery store, or your favorite supermarket. The price may not be the best, or there are not enough pineapples available (a lack of liquidity). So you hear from your friend that the price is better elsewhere. But it may be too far or overwhelming to get there.&

However, what if your favorite marketplace, in addition to the pineapples they already have, offers you access to the inventory of other supermarkets, without needing to go there? You’ll get more pineapples, at potentially better prices, and a convenient way to buy them. That’s what our trading platform is doing, but with crypto instead of pineapples.

CEX.IO Spot Trading sources two liquidity providers: the CEX.IO trading engine, and CEX.IO Prime. The trading engine offers unique liquidity from market makers (they place their orders directly via market making API), with resting limit orders from Spot Trading.& &

All Spot Trading users have access to this trading engine via API, a web terminal interface, and our mobile application. This means anyone could be a market maker on CEX.IO. For instance, when you place a limit/stop limit order (which is not executed immediately) on our Spot Trading platform, you contribute to increasing the CEX.IO trading engine’s liquidity.&

On the other hand, CEX.IO Prime aggregates liquidity from the most liquid sources outside the CEX.IO ecosystem. These sources include other centralized and decentralized exchanges, liquidity pools, etc.

As a result, what users see in the Spot Trading terminal is an attractive mix of liquidity provided by the CEX.IO trading engine, as well as CEX.IO Prime.

Chasing the juiciest fruits (best prices)

Let’s say you need to buy 10 pineapples right now. You’re looking at the stall (order book), and want to pick the juiciest ones (with the best possible price). You ask a store representative to give you those (by placing a market order), and they immediately go find them.&

Furthermore, the clerk may go the extra mile, slicing the most delicious parts from different pineapples like a fruit ninja, to create the best pineapple available. Once again, it’s done immediately. In these cases, the juices could slightly leak (price slippage), but you can protect yourself from such situations (with our max slippage feature).

When paying for the10 pineapples at checkout, you could “tip” the store employee (pay a trading fee), or use your coupon (trading fee balance) to save funds. Now you can enjoy your pineapples, and/or put them in your fridge.

This simple example reflects CEX.IO Spot Trading’s power under the hood. It uses our own, proprietary Smart Router technology, which detects the best price between the CEX.IO trading engine and CEX.IO Prime. If the user’s order can be fully, or partially, executed with a better price on CEX.IO Prime, then Smart Router will send it there. Otherwise, the order will be filled using the CEX.IO trading engine.&

Notably, CEX.IO Prime can execute a single order, using several external liquidity sources at the same time, to achieve the best possible price. However, if available prices are equal, the CEX.IO trading engine will be prioritized against CEX.IO Prime to stimulate market-making provided by our users.

Making rare varieties (markets) common&

Let’s say you have specific tastes, and finding and acquiring the variety of pineapple you like/need can be difficult, and/or expensive. No worries, we have this case covered too!

The CEX.IO ecosystem features a so-called Converter, which empowers us to create new markets from existing ones. These new markets might not exist elsewhere.

For instance, let’s say there is a X/Y market, which could be uncommon, and, hence, not liquid. However, X/USDT and Y/USDT are quite popular. As a result, we can potentially combine both of these markets to create a new X/Y pair, with deeper liquidity on the CEX.IO Spot Trading platform.&

By the way, this feature also powers the Convert service in the CEX.IO Wallet, which empowers you to make anything-to-anything swaps.

Conclusion

In essence, the technologies integrated into our trading platform are purposefully adopted to provide our users with the best possible crypto prices, while offering a wide spectrum of markets with deeper liquidity. With our hybrid system of liquidity providers, we empower our users to become market makers of any magnitude, and capitalize on market opportunities within the broader crypto landscape.

The flexibility embedded in our approach allows us to swiftly adapt to evolving market conditions, seamlessly introduce new digital assets, and establish new markets. Through this brief exploration of the inner workings of CEX.IO Spot Trading’, we strive to showcase our commitment to delivering a platform that not only meets, but anticipates the dynamic needs of our users for pine… wait, cryptocurrencies.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.&


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