Design crypto trading system

Q: Design crypto trading system

This question evaluates a candidate's ability to design a trading gateway that reconciles synchronous client APIs with asynchronous downstream exchange behavior, emphasizing distributed systems concepts such as state machines, correctness under failure, idempotency, and scalable traffic handling.

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Question

System Design: Crypto Trading Gateway via Logically Asynchronous, Synchronous APIs

Context

You are designing a trading gateway that brokers client orders to multiple third-party crypto exchanges. The external exchanges expose synchronous HTTP endpoints for order submission/cancel (request–response), but trade execution and order updates are delivered asynchronously (e.g., via WebSocket streams or polling). The system must present a clean client-facing API, ensure correctness under failures, and scale through volatile, spiky market conditions.

Requirements

Design the system and cover:

High-level architecture and request flow for placing and canceling orders using a synchronous client API while handling asynchronous downstream behavior.
A complete order state machine and state-transition diagram (e.g., NEW → PARTIALLY_FILLED → FILLED / CANCELED / EXPIRED), including intermediate and failure states.
How to detect and recover from third-party exchange timeouts or failures, including idempotency, retries, reconciliation, and circuit breaking.
Strategies to handle spiky traffic and protect downstream dependencies (queueing, autoscaling, back-pressure, prioritization, rate limiting).

Design crypto trading system

System Design: Crypto Trading Gateway via Logically Asynchronous, Synchronous APIs

Context

Requirements

Solution

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