System Design: Crypto Trading via Third‑Party Exchanges

Context

You are designing a trading service that accepts client orders (e.g., market and limit) and routes them to third‑party cryptocurrency exchanges. Third‑party exchanges expose nominally synchronous REST/RPC APIs, but may be slow or unreliable. The service must reliably track order state, handle partial fills, and scale under spiky traffic.

Assume:

• Users trade using balances held in your system; you must reserve funds before routing orders.
• Multiple exchanges may be integrated; each has different authentication, rate limits, and semantics.
• The client expects a quick acknowledgement and eventual, accurate execution status.

Tasks

1. Propose a high‑level architecture that integrates with multiple third‑party exchanges exposing synchronous APIs, while providing a responsive interface to clients.
2. Define the life‑cycle and state transitions of an order (including partial fills, cancels, and failure/unknown states).
3. Explain how to handle third‑party exchange timeouts, retries, and failures (including idempotency and reconciliation).
4. Describe strategies to cope with spiky traffic loads while respecting third‑party rate limits and preserving system stability.