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  • What is the Matching Engine?
  • Types of Orders Matching
  • Matching Engine Algorithm
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Matching Engine

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Last updated 7 months ago

What is the Matching Engine?

The Matching Engine is a programmed matching algorithm to execute intent-based orders. It is a key component of the Quotex Intent-Based Architecture, working within the Unified Order Network. Its main function is to find the best routes to execute intent-based transactions.

Types of Orders Matching

There are three types of order matching within the Quotex Architecture:

  • Order-to-Order (Mirror Order). The Automated algorithm of Matching Engine executes opposite orders of different users against each other;

  • Order-to-Resolver. The Matching Engine proposes an order to a pool of resolvers, who then compete to execute the order at the most favorable price for the user;

  • Complex Match.This involves two or more resolvers executing the order. Or a mirror order may be executed partially, with one or more resolvers completing the rest of the order.

Matching Engine Algorithm

The logic behind the matching algorithm ensures users enjoy the most favorable conditions for their trades, prioritizing: (i) price; (ii) slippage; (iii) execution time; and (iv) execution integrity. The algorithm takes all these details into account to find the most efficient path for executing intent-based orders.

Based on these priorities, the algorithm typically executes transactions in the following order:

  1. Order-to-Order (Mirror Order). The cheapest, most efficient, and fastest type of trade for users.

  2. Order-to-Resolver. Resolvers compete on price to execute the order, providing the best price for the user.

  3. Complex Orders. These require more than one transaction, resulting in higher execution costs.

Please note that this is a basic explanation of the algorithm. In practice, complex orders might be more efficient to execute than order-to-resolver. For example, if User A wants to swap 1,000,000 USDT on chain X for USDC on chain Y, instead of executing the entire order through a single resolver for 998,000 USDC, the algorithm might swap 900,000 USDT for 900,000 USDC via a mirror order and the remaining 100,000 USDT via the same resolver for 99,800 USDC. Thus, User A receives 999,800 USDC instead of 998,000 USDC.