State machine replication and the modern exchange

Electronic exchanges play an important role in the world’s financial system, acting as focal points where actors from across the world meet to trade with each other.

But building an exchange is a difficult technical challenge, requiring high transaction rates, low, determinstic response times, and serious reliability.

We’ll look at the question of how to design an exchange through the lens of Concord, a system for building exchange-like systems that was developed at Jane Street. Concord is designed from the ground up around state machine replication, a classic distributed systems technique.

This choice has profound affects on the resulting system, providing a simple framework for building a reliable platform, while at the same time requiring very careful performance engineering to make it work effectively. We’ll discuss the pros and cons of the design, and consider the lessons it provides for other transaction processing systems.


Yaron Minsky got his BA in Mathematics from Princeton and his PhD in Computer Science from Cornell, where he studied distributed systems. He joined Jane Street in 2003, where he started out developing quantitative trading strategies, going on to found the firm’s quantitative research group. He introduced OCaml to the company and managed the transition to using OCaml for all of its core infrastructure, turning Jane Street into the world’s largest industrial user of the language. In the meantime, he’s been involved in many different aspects of Jane Street’s technology stack, including trading and risk systems, developer tools, and user-interface toolkits. Yaron has lectured, blogged and written about programming for years, with articles published in Communications of the ACM and the Journal of Functional Programming, and is co-author of the book Real World OCaml.