Electronic trading systems have definitely reshaped the way trading investing in the financial markets work, which gave rise to new exchange software to appear and more brokerage firms to emerge.
Most of these platforms’ capabilities are powered by API infrastructure that ensures the proper working of the software features, especially the ones derived from other servers or websites.
Let’s highlight the importance of API integrations for your crypto exchange and what you need to know about selecting the right configuration.
Understanding APIs in Crypto Exchanges
In broad terms, application programming interfaces (APIs) are messaging protocols that define the means and methods of communication between servers and websites. These tools enable your software to retrieve valuable information from other sources, such as market prices, exchange rates, breaking news, local times and others.
Configuring the API infrastructure of your crypto exchange is critical, and you need a developer to ensure correct integrations. Incorrectly built APIs can lead to malfunctions and improper work of your exchange, leading to customer frustration. In worst cases, security breaches.
From a decentralised exchange point of view, APIs for liquidity connect your platform with funding sources and markets that populate your platform with cryptocurrencies, tokens and digital assets.
Finding a crypto liquidity API for your exchange platform is crucial because it allows you to ensure updated market prices, stable liquidity flows and consistent platform performance.
The Best API Setup for Your Brokerage
Finding and connecting suitable integrations for your website can be challenging as it is very technical. However, for non-technical managers, there are essentials that you need to implement with your devs team.
Find a Reliable Liquidity Source
Inspect the LP’s reliability and legality before connecting your software with a liquidity provider API. Multiple funding sources offer similar services, and you need to check their market access types and consistency over time.
Sketchy providers result in unstable delivery of your services, high price variance and inconsistent trade availability.
Ensure a Top-notch Security Level
APIs are an easy target for hackers, who try to breach these protocols to manipulate their instructions and divert a transaction their way.
Therefore, implement as many security layers as possible and make sure the other party does not expose your or your client’s data.
Conduct Continous Monitoring and Checks
Continuously monitoring your API connections is as important as finding them. Perform periodic checks and performance evaluations to ensure the proper working of your software.
Address any anomalies if found in the system or in the API connections with other service providers in a timely manner to avoid damages.
Final Remarks
APIs are an integral part of modern trading systems; they connect multiple servers and websites to improve the performance and functionality of one platform. These tools serve various purposes, and in the crypto exchange context, they allow you to integrate liquidity sources and a seamless user experience on your website.
