How Does an Exchange’s Matching Engine Speed Affect Liquidation Success?

The speed and efficiency of the exchange's matching engine are critical for successful liquidation. A fast matching engine can execute the liquidation order immediately, minimizing the chance of the market moving further against the position before it is closed.

A slow or congested engine can delay the execution, leading to a much worse fill price and a higher probability of a deficit that must be covered by the insurance fund. Speed is a key risk mitigation factor.