Curriculum·Graduate·G902
Exchange and Venue APIs
BitMEX during the crash of 12 to 13 March 2020. As the price of Bitcoin fell by nearly half in a day, the crypto derivatives exchange BitMEX was knocked offline at the worst moment by a botnet's denial-of-service attack, which it first misdiagnosed as a failed disk at its cloud provider, and was hit again ten hours later.
Lesson 1 opens on
BitMEX outage, 12 to 13 March 2020
As the price of Bitcoin fell by nearly half in a single day, the crypto derivatives exchange BitMEX was knocked offline at the worst possible moment, at 02:16 UTC on 13 March, by a botnet's denial-of-service attack, which it first misdiagnosed as a failed disk at its cloud provider, and was hit again ten hours later, when it restored full service within 25 minutes. While BitMEX was down, its cascade of forced liquidations stopped, and traders and their bots could not reach the venue to reduce, hedge, or close positions exactly when it mattered most, so anyone depending on that venue was frozen out precisely during the move they most needed to manage. Some later argued the outage inadvertently halted a liquidation spiral that might otherwise have driven the price toward zero.
The lessons
- G902-01A venue is infrastructure that goes down under loadExplain that a trading venue is fallible infrastructure that can go offline under loadabout 34 min · opens on BitMEX outage, 12 to 13 March 2020
- G902-02Rate limits and reachability when everyone trades at onceExplain that exchange APIs have finite capacity and rate limits that bind hardest under loadabout 34 min · opens on Coinbase outages during volatility, 2020 to 2021
- G902-03The venue can cut you offExplain that a venue can restrict or cut off your access when its own systems or capital are stressedabout 34 min · opens on The Robinhood GameStop restriction, 28 January 2021
- G902-04Even the largest exchange can go darkExplain that even the largest, most robust exchange can go fully offlineabout 33 min · opens on The NYSE outage, 8 July 2015