What is Synchronicity

Introduction

Traditional financial exchanges are structurally inefficient. Legacy markets burden traders with wider spreads, thinner liquidity and suboptimal execution, ultimately resulting in lower returns.

These inefficiencies are due to the asynchronous nature of these markets. First, trading strategies live outside of the market and communicate with the market asynchronously. Second, orders are matched sequentially. The combination of these two factors enables intermediaries with the lowest latency to exploit asynchronous order flow to extract value from every order.

Synchronicity is the world’s first synchronous market, where strategy, not speed, determines your profits. Synchronicity introduces two improvements to market structure that make it impossible for faster players to extract value. First, Synchronous Strategies enable traders to upload their trading logic to the exchange itself, where it reacts to new information in real time, free from latency games. Second, buyers and sellers are matched directly in a blind batch auction where everyone gets the best price. By pairing Synchronous Strategies with Synchronous Matching, Synchronicity creates the best possible conditions to trade for everyone except the HFTs extracting value.

Why Synchronicity Matters

In contemporary asynchronous financial markets, the requirement for static orders creates a structural vulnerability. HFTs use expensive infrastructure and algorithms to exploit these orders and ensure that traders receive their worst acceptable price.

The scale of this extraction is massive: billions are estimated to have been taken from market participants by high-frequency trading firms last year. Synchronous markets eliminate these predatory practices and ensure all risk-taking participants get the best price on their trades.

How it works

Synchronous Strategies

In traditional markets, “latency games” and connectivity issues give high-frequency firms an advantage which allows them to extract value from every other market participant. Synchronicity eliminates this extraction by allowing traders to deploy their trading logic directly onto the exchange where it runs in real-time and completely privately.

• Synchronous Execution: Upload your automated strategies to run directly within the exchange environment in real-time.
• Zero Latency & Connection Risk: Because your strategy lives on the exchange, you are immune to “API gates” going down or physical distance delays.
• Total Privacy: Your logic is encrypted. No one—not even Synchronicity—can see your strategy [coming soon].
• Instant Updates: Your strategy reacts to market data changes immediately, updating orders the instant the environment shifts.

No-Code Strategy Builder: You don’t need to be a developer to trade like a pro. Use our intuitive interface to build sophisticated strategies with zero coding required. Learn more about the Strategy Builder here: Synchronous Strategies.

Synchronous Matching

Rather than using a continuous limit order book, which is easily manipulated by intermediaries, Synchronicity utilizes Blind Frequent Batch Auctions (BFBA) to match buyers and sellers directly.

How BFBA Works:

Instead of matching trades one-by-one, the exchange gathers orders over a fixed interval. All overlapping buy and sell orders are then executed simultaneously at a single clearing price: the price that results in the highest volume of trades.

The Advantages:

• Uniform Pricing: Every participant in a batch receives the exact same price.
• Eliminating Middlemen: By removing the “first-to-arrive” advantage, high-frequency firms can no longer jump ahead of your trades to extract value.
• Incentivized Fairness: The game theory behind BFBA encourages participants to submit their best possible price. If the clearing price is better than your bid, you effectively receive a rebate for the difference. This logic applies to takers and makers alike, resulting in tighter spreads and deeper liquidity than CLOBs.

Learn more: Blind FBA: Game Theory and Implications.

A New Era for Markets

Synchronicity isn’t just a platform but rather a redesign of how value is created and shared in financial markets. By eliminating extraction and shifting the market from a latency race into a competition of strategy, Synchronicity unlocks the full potential of human and machine intelligence.