The crypto exchange and clearinghouse, founded in 2022 by industry heavyweights, has built out its technology to meet the needs of the institutional market. In the process, it has learned important lessons about partnering with vendors, building in-house, and, ultimately, control.
Some would say that a crypto winter is the perfect time to build, and that’s exactly how Tony Acuña-Rohter, now CEO at EDX, came to see it, too. In his mind, EDX could show the market how a crypto exchange could safely appeal to traditional finance by combining elements of the institutional capital markets world with novel components of crypto. To do that, the exchange looked to its own technology team and a budding network of partners, including MEMX Technologies and Adaptive Financial Consulting.
EDX’s goal was to infuse high finance’s best practices with crypto’s cutting edge. This meant installing safeguards around separation of duties and responsibilities, resilience and disaster recovery, and ultra-low latency capabilities that could service 24/7 trading. To that end, EDX operates both an exchange and a clearinghouse, EDX Clearing (EDXC).
On the exchange side, EDX matches buyers and sellers at the best possible price as quickly as possible for healthy price discovery and liquidity. On the clearing side, EDX acts as the buyer to every seller and the seller to every buyer, essentially running as an all-to-all market. The platform features centralized risk management and the ability to trade on limits. Participants can post collateral based on their risk profile and credit tier, allowing them to trade all day without having to pre-fund their account.
“All of those things may sound boring to somebody who comes from TradFi, but these are novel things in the world of crypto,” Acuña-Rohter says. EDX launched its exchange in 2023 and its clearinghouse in 2024. “We have these two very separate and distinct architectures, but with a very distinct purpose, and they both work in harmony together.”
This article originally appeared on WatersTechnology. Read the full article here.
