Ask the Expert: What goes into building a crypto trading platform?
We sat down with Nick Baes, our VP, Crypto Engineering for an enlightening discussion on what goes into creating a successful crypto trading platform.
Building an effective crypto trading experience from scratch is no easy task. While a vast amount of technical know-how and engineering finesse is certainly required, a truly great platform is also born from timeless values such as cross-departmental collaboration, constructive feedback loops, and a “fail fast” mentality. Our dedicated team lies at the heart of all we do, and well-oiled organizational pathways go a long way in standing out from the competition. Read on for insight from our conversation with Nick Baes into our decision-making processes, and the core principles underlying Bakkt® Trade.
Liquidity and scalability
From an engineering standpoint, Bakkt sets itself apart through an emphasis on liquidity and scalability. During its eleven-month development phase, a primary concern in building Bakkt Trade was sourcing liquidity for all 8 coins it would offer: Bitcoin, Ethereum, Bitcoin Cash, Ether Classic, Dogecoin, Litecoin, USD Coin and Shiba Inu. Achieving this required not only extensive networking, but also technological support. However, the more significant hurdle lay in scaling the platform efficiently.
This scalability was ultimately accomplished by ensuring that different components of the trading platform, including order acceptance, market transactions, and data storage, were all loosely coupled—meaning that they are not overly dependent on one another. This allows each component of the platform to scale independently, much like adding multiple assembly lines in a factory to increase production.
B2B2C model
As a B2B2C provider, Bakkt balances catering to business clients while also keeping the needs of end consumers in mind. In the often-volatile world of crypto, ensuring uninterrupted liquidity even in the midst of extreme market conditions is of utmost importance. Bakkt addresses this not only by partnering with multiple reliable liquidity providers, but also by building redundancies into our systems in order to maintain consistent, round-the-clock service. Deep liquidity and tight spreads at Bakkt ensure stable pricing.
Know your audience
Beyond reliability, businesses considering rolling out their own crypto trading platforms must also exhibit deep understandings of diverse market segments; a novice will be drawn to different order types and capabilities than an advanced trader. Removing barriers to entry, simplifying user flows, and providing educational materials can help bring less experienced users into the fold, while advanced order types are attractive to the more seasoned crypto owner. The goal is to make every step of the trading journey as intuitive and enticing as possible. These nuances can be built into the platform, facilitating the delivery of truly tailored experiences.
Bakkt’s approach
Bakkt’s approach, blending institutional-grade trading and custody with our legacy of traditional financial expertise from entities like the Intercontinental Exchange (ICE) allows for a combination of disciplines and strengths that leads to high-powered, highly scalable, ultra-safe platforms. Bakkt’s focus on creating a resilient, secure trading experience in the space speaks to our commitment to furthering the widespread adoption of cryptocurrencies in the US and abroad.
The world of crypto is evolving, and so are the strategies that smart providers must harness in order to stay ahead of the game. The B2B2C model, with its high levels of market penetration, trustworthy reputations and financial know-how, present an optimal arena in which to deliver crypto trading to wider audiences.
Biography
Nick Baes is a hands-on technology leader with 20+ years of experience in the TradFi, FInTech, and crypto market segments, and currently leads the crypto engineering department at Bakkt. Nick has built platforms in all areas of capital markets - front office & proprietary trading, clearing, brokerage, risk management. He’s experienced in the full trade lifecycle across many asset classes - equities, options, futures, swaps, crypto. Over the course of his career, Nick has held leadership roles across highly successful firms, both public and private, such as Intercontinental Exchange Group and PEAK6 Investments.