Investment Infrastructure: Alpaca Announces Upgrade with 24/7 sub-250ms Latency Transaction Processing

At Alpaca, their vision is to build a global de facto standard infrastructure for investing, and for that, they claim it is critical that they continue to provide technology infrastructure to support this vision.

They prioritize their API platform, “designed with developers in mind, and constantly strive to enhance our underlying technology to ensure that your customers can trade with confidence.”

In a financial business, the ledger is “particularly important as it enables accurate and up-to-date transaction records that adhere to strict control requirements in order to ensure the integrity of our system of record.”

Traditional ledger systems, including Alpaca’s proprietary book of records “that has allowed us to innovate quickly throughout the trading stack, relied on large ‘end of day’ periods where transactions could not be processed until these end-of-day calculations were complete.”

This has “become an impediment to the nature of 24/7 access to multiple asset classes, such as US stocks and crypto.” Slow ledger transactions and journal processing “make it challenging and frustrating to offer quick onboarding or funding flows that customers expect today.”

To address this concern, they are pleased to share that they “have significantly improved their ledger, resulting in meaningful enhancements to their transaction processing times.”

Goal: Improve Transaction Processing Times

They started this initiative “with the goal of being able to process transactions at any time of day without any delays caused by batch processing.”

This is important “because you (our partner) depend on the timely processing of transactions.”

For instance, if an account “must be funded before it can trade, then an account cannot trade until the cash deposit or cash journal transaction that adds funds to it is processed.”

Traditionally, they had “carried out synchronous updates to relevant accounts’ snapshots for the day to ensure that End of Day (EoD) processes were carried out correctly.”

However, this method “had its limitations, as activities were blocked at certain times of the day, leading to delays in transaction processing times.”

To address this limitation, Alpaca reveals that it “moved away from synchronous blocking EoD processes to an asynchronous EoD process.” This means “that EoD processes and activities to the next day can be run concurrently, leading to significant improvements in transaction processing times.”

With the new asynchronous EoD process, Alpaca says it “can run EoD processes and book activities for the next day concurrently.”

This has “led to a marked improvement in transaction processing around EoD, bringing down the median processing time during this window from over 15 seconds to under 250ms (0.25 seconds).”

They now aim “to reduce the journaling time by another 50% over the coming months to set the industry standard in journal processing times.”

By reducing transaction processing times, they ensure their partners “can execute stock and crypto trades quickly and efficiently.”

This is described as being “critical in the fast-paced world of trading, where delays can lead to missed opportunities and lost profits.”

As noted in a blog post, the improvements in transaction processing times “demonstrate our commitment to providing a great technology infrastructure for investing.”

By continuously improving its underlying technology, they aim “to provide partners with the confidence to trade successfully.”

As clarified in the announcement, securities brokerage services are “provided by Alpaca Securities LLC (Alpaca Securities), member FINRA/SIPC, a wholly-owned subsidiary of AlpacaDB, Inc. Technology and services are offered by AlpacaDB, Inc.”

Cryptocurrency services are “made available by Alpaca Crypto LLC (“Alpaca Crypto”), a FinCEN registered money services business (NMLS # 2160858), and a wholly-owned subsidiary of AlpacaDB, Inc. Alpaca Crypto is not a member of SIPC or FINRA.”

Cryptocurrencies are “not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC.”

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