[image credit : Bitfinex]
Crypto exchange Bitfinex announced that it has “deployed a proprietary surveillance tool — Shimmer — to combat market abuse and help promote orderly trading on the exchange.”
Bitfinex explained what Shimmer—which gets its name from a defensive mechanism used by giant honeybees—is designed to do.
Shimmer is a “market alert and reporting tool” that will “identify and investigate possible manipulative behaviours and suspicious trading practices on the exchange, improving market integrity and visibility.” It has be designed to “operate seamlessly with Hive, Bitfinex’s distributed, multi-threaded and multi-process matching engine built around speed, stability and scalability.”
When Shimmer detects “incidences of potential improper trading activity on the platform”, it alerts the Bitfinex team “via email summaries of suspicious trading patterns across all trading pairs listed on the exchange, including futures and margin funding products.”
One of these abusive practices that Shimmer is designed to combat is wash trading, where “a trader buys and sells an instrument with the intent of misleading the market, and layering, where a trader uses non-bona fide orders to mislead others regarding actual supply or demand in the market.”
Paolo Ardoino, CTO at Bitfinex, said, “Comprehensive market and trade surveillance capabilities are integral to operating a leading cryptocurrency exchange.
“To meet the complex needs of an evolving digital asset class and to protect our sophisticated participants, Bitfinex has chosen to develop its own state-of-the-art surveillance system.
“This will help to assure that potentially manipulative practices are rooted out and suspicious behaviour detected.”
Ardoino goes on to say that Shimmer is especially useful for Bitfinex’s futures and margin funding products.
Shimmer has been implemented using a programming language called Rust. According to the Bitfinex CTO, Rust was chosen due to “its execution speed and programming safety.”