At first glance, the landscape of crypto exchanges may appear saturated, with many prominent players already active in the industry for several years. However, a deeper dive shows that there is still a large niche that remains unaddressed. The increasing number of banks and financial institutions that are active in the crypto market are faced with significant challenges to confidently do business with cryptocurrencies and digital assets.
That is because institutional-grade trading venues that really meet the exacting standards of banks, securities firms and their institutional clients are virtually non-existent in the market today. Not to mention the lack of trading venues that offer both the transparency of a central limit order book and the ultra-low latency that high-volume traders are looking for.
Between the requirements for stringent compliance, institutional account structures, reporting – not to mention low-latency, capital efficiency and general market integrity – financial institutions are looking for much more from a trading venue than retail investors.
RULEMATCH, a Consensys Mesh portfolio company, has recognized the importance of meeting these exacting specifications. Founder and CEO David Riegelnig, together with co-founders Rolf Gätzi, Stefan Lütolf and Helena Schöni, set out in 2021 to do just that. One major element is that RULEMATCH leverages the pre-trade risk, matching engine and market surveillance technology of Nasdaq as a technical foundation for the RULEMATCH trading venue.
While many existing crypto exchanges play to the masses and target retail traders, RULEMATCH is focused on serving a much more professional niche of high-volume, discerning market participants.
Even though popular retail exchanges traditionally serve a much larger number of clients, the deficiencies of their tech stack – not to mention compliance controls and processes – make it extremely difficult to serve both retail and institutional clients at the same time. RULEMATCH’s extreme focus on banks and financial institutions means that it is built from “the ground up” to meet their needs.
The focus on high-value, trading-affine clients means that RULEMATCH has optimized its venue for performance. With millions of orders processed daily using the matching engine technology from Nasdaq and at speeds down to 30 microseconds – significantly faster than the current top crypto exchanges – plus strong technical deployment in Swiss data centers, RULEMATCH has built an extremely robust tech stack.
Besides speed, capital efficiency is also an often-forgotten feature that financial institutions are looking for. RULEMATCH has built custom systems that offer:
- Post-trade clearing and settlement: Unique post-trade settlement and clearing system using delivery vs. payment principle
- Proprietary algorithm: Own-developed algorithm created for optimized payments and transfers among trading participants during the settlement process
- Multilateral netting: Capital-efficient netting to support high-volume traders
As more institutional investors push into the space, at Mesh we believe RULEMATCH’s targeted strategy and strong technology will result in them becoming one of the top platform options.
Mesh participated in RULEMATCH’s seed round in September 2022 with a recent follow-on investment in 2023 as they continue their focus on the technology, talent, and compliance. Keep up with RULEMATCH with their socials here.
