FPGA Trading Architecture for High-Volume Transactional Determinism

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Solution Overview

Problem

Current electronic trading systems face challenges in maintaining transactional determinism, fault tolerance, and equitable access to information and opportunities under high transaction volumes, while also dealing with increased latency and throughput demands, and potential irrational market behavior.

Innovation Solution

Implementing an FPGA-based trading system architecture with redundant match engines, an Orderer component for transaction sequencing, and a Decider component for result determination, along with direct market instrumentation, to ensure deterministic and fault-tolerant operation, while enhancing trading opportunities and risk mitigation.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Productivity

If traditional electronic trading systems are used to handle high transaction volumes, then processing capacity increases, but transactional determinism and fault tolerance deteriorate

Engineering Contradiction:

Improvetransaction volume capacityVSAvoidtransactional determinism

Core Design Contradiction:

ProductivityVSReliability

Solution Approach 1:

The trading system is segmented into multiple independent match engines that process transactions in parallel. Each match engine maintains its own transaction queue and processing logic, allowing the system to handle high volumes while preserving deterministic behavior within each segment. The Orderer component further segments transactions by assigning sequence numbers to individual transactions across the distributed system.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The Orderer component acts as an intermediary that receives transactions from multiple sources, assigns deterministic sequence numbers, and distributes them to appropriate match engines. This intermediary layer ensures that even though processing is distributed across multiple engines, the overall system maintains transactional determinism through centralized sequencing.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Reliability

If redundant match engines are implemented for fault tolerance, then system reliability improves, but device complexity increases

Engineering Contradiction:

Improvefault toleranceVSAvoidsystem architecture complexity

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

Multiple match engines are merged into a coordinated system where they share common components such as the Orderer, decision logic, and market data feeds. This merging approach allows redundancy for fault tolerance while avoiding the complexity of completely independent systems, as the shared components provide centralized control and coordination.

Inventive Principle:

Principle #5Merging (Combining)

Solution Approach 2:

The match engines are designed as universal, identical units that can perform the same matching functions. This universality simplifies the system architecture because all engines follow the same logic and protocols, making them easier to manage and coordinate despite the increased number of components.

Inventive Principle:

Principle #6Universality (Multi-functionality)

3Reliability

If transaction sequencing is implemented to ensure determinism, then transactional determinism improves, but processing latency increases

Engineering Contradiction:

Improvetransactional determinismVSAvoidprocessing latency

Core Design Contradiction:

ReliabilityVSLoss of time

Solution Approach 1:

The Orderer assigns sequence numbers to transactions in advance, before they are processed by match engines. This preliminary sequencing action eliminates the need for complex coordination and synchronization during transaction processing, as the deterministic order is already established. The sequence numbers are assigned continuously without blocking transaction flow.

Inventive Principle:

Principle #10Preliminary action

4Loss of information

If direct market instrumentation is implemented for equitable access, then information accessibility improves, but communication overhead increases

Engineering Contradiction:

Improveinformation accessibilityVSAvoidcommunication infrastructure

Core Design Contradiction:

Loss of informationVSDevice complexity

Solution Approach 1:

Market participants connect directly to the match engines through standardized interfaces, allowing them to retrieve market data and submit transactions without intermediary systems. The match engines themselves provide the instrumentation and data feeds, eliminating the need for separate communication infrastructure and reducing overall system complexity.

Inventive Principle:

Principle #25Self-service

Data Source

PatentUS12443996B2Transactionally deterministic high speed financial exchange having improved, efficiency, communication, customization, performance, access, trading opportunities, credit controls, and fault tolerance

Publication Date: 2025.10.14 CHICAGO MERCANTILE EXCHANGE INC

AI summary

The disclosed embodiments relate to implementation of a trading system, which may also be referred to as a trading system architecture, having improved performance which further assures transactional determinism under increasing processing transaction loads while providing improved trading opportunities, fault tolerance, low latency processing, high volume capacity, risk mitigation and market protections with minimal impact, as well as improved and equitable access to information and opportunities.