Consortium Blockchain-Based Decentralized Stock Exchange Platform
The global implementation architecture of the traditional stock market distributes responsibilities and data across different intermediaries, including financial and governmental organizations. Each organization manages its system and collaborates with the others to facilitate trading on the stock e...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
IEEE
2020-01-01
|
| Series: | IEEE Access |
| Subjects: | |
| Online Access: | https://ieeexplore.ieee.org/document/9127940/ |
| _version_ | 1818379582071373824 |
|---|---|
| author | Hamed Al-Shaibani Noureddine Lasla Mohamed Abdallah |
| author_facet | Hamed Al-Shaibani Noureddine Lasla Mohamed Abdallah |
| author_sort | Hamed Al-Shaibani |
| collection | DOAJ |
| description | The global implementation architecture of the traditional stock market distributes responsibilities and data across different intermediaries, including financial and governmental organizations. Each organization manages its system and collaborates with the others to facilitate trading on the stock exchange platform, and typically buy-sell orders go through different parties before settlement. This design architecture that involves a complex chain of intermediaries has several limitations and shortcomings, such as a single point of failure, a longer time for financial settlements, and weak transparency. Blockchain technology consists of a network of computer nodes that securely share a common ledger without the need of having any kind of intermediaries. In this paper, we present a novel blockchain-based architecture for a fully decentralized stock market. Our architecture is based on a private Ethereum blockchain to create a consortium network leveraging organizations that are already involved in the traditional stock exchange to act as validating nodes. In our architecture, the stock exchange trading logic is completely implemented on a smart contract, while considering the existing governmental market regulations. Since the new platform does not introduce significant changes to the stock exchange trading logic and does not eliminate any of the traditional parties from the system, our proposal promotes efficient adoption and deployment of decentralized stock exchange platforms. In addition, we present a proof of concept implementation of the new architecture, including the smart contract for trade exchange, as well as a virtualization-based test network to assess the platform performance. The test network consists of virtual nodes that run the developed stock exchange smart contract where we measure the buy-sell orders throughput and latency under different network sizes and trading workload scenarios. The obtained results have shown that the proposed trading platform can reach a throughput of 311.8 tx/sec, which is equivalent to 89% of the optimal throughput when the sending rate is 350 tx/sec. This throughput is largely sufficient to meet the requirement of major stock exchanges, such as Singapore stock market. |
| first_indexed | 2024-12-14T02:05:04Z |
| format | Article |
| id | doaj.art-5743bf0d688a46ca80ba4b242c1e8330 |
| institution | Directory Open Access Journal |
| issn | 2169-3536 |
| language | English |
| last_indexed | 2024-12-14T02:05:04Z |
| publishDate | 2020-01-01 |
| publisher | IEEE |
| record_format | Article |
| series | IEEE Access |
| spelling | doaj.art-5743bf0d688a46ca80ba4b242c1e83302022-12-21T23:20:55ZengIEEEIEEE Access2169-35362020-01-01812371112372510.1109/ACCESS.2020.30056639127940Consortium Blockchain-Based Decentralized Stock Exchange PlatformHamed Al-Shaibani0https://orcid.org/0000-0002-1983-9960Noureddine Lasla1https://orcid.org/0000-0001-6685-9043Mohamed Abdallah2https://orcid.org/0000-0002-3261-7588Division of Information and Computing Technology, College of Science and Engineering, Hamad Bin Khalifa University (HBKU), Doha, QatarDivision of Information and Computing Technology, College of Science and Engineering, Hamad Bin Khalifa University (HBKU), Doha, QatarDivision of Information and Computing Technology, College of Science and Engineering, Hamad Bin Khalifa University (HBKU), Doha, QatarThe global implementation architecture of the traditional stock market distributes responsibilities and data across different intermediaries, including financial and governmental organizations. Each organization manages its system and collaborates with the others to facilitate trading on the stock exchange platform, and typically buy-sell orders go through different parties before settlement. This design architecture that involves a complex chain of intermediaries has several limitations and shortcomings, such as a single point of failure, a longer time for financial settlements, and weak transparency. Blockchain technology consists of a network of computer nodes that securely share a common ledger without the need of having any kind of intermediaries. In this paper, we present a novel blockchain-based architecture for a fully decentralized stock market. Our architecture is based on a private Ethereum blockchain to create a consortium network leveraging organizations that are already involved in the traditional stock exchange to act as validating nodes. In our architecture, the stock exchange trading logic is completely implemented on a smart contract, while considering the existing governmental market regulations. Since the new platform does not introduce significant changes to the stock exchange trading logic and does not eliminate any of the traditional parties from the system, our proposal promotes efficient adoption and deployment of decentralized stock exchange platforms. In addition, we present a proof of concept implementation of the new architecture, including the smart contract for trade exchange, as well as a virtualization-based test network to assess the platform performance. The test network consists of virtual nodes that run the developed stock exchange smart contract where we measure the buy-sell orders throughput and latency under different network sizes and trading workload scenarios. The obtained results have shown that the proposed trading platform can reach a throughput of 311.8 tx/sec, which is equivalent to 89% of the optimal throughput when the sending rate is 350 tx/sec. This throughput is largely sufficient to meet the requirement of major stock exchanges, such as Singapore stock market.https://ieeexplore.ieee.org/document/9127940/Blockchainsmart contractstock exchangetrading |
| spellingShingle | Hamed Al-Shaibani Noureddine Lasla Mohamed Abdallah Consortium Blockchain-Based Decentralized Stock Exchange Platform IEEE Access Blockchain smart contract stock exchange trading |
| title | Consortium Blockchain-Based Decentralized Stock Exchange Platform |
| title_full | Consortium Blockchain-Based Decentralized Stock Exchange Platform |
| title_fullStr | Consortium Blockchain-Based Decentralized Stock Exchange Platform |
| title_full_unstemmed | Consortium Blockchain-Based Decentralized Stock Exchange Platform |
| title_short | Consortium Blockchain-Based Decentralized Stock Exchange Platform |
| title_sort | consortium blockchain based decentralized stock exchange platform |
| topic | Blockchain smart contract stock exchange trading |
| url | https://ieeexplore.ieee.org/document/9127940/ |
| work_keys_str_mv | AT hamedalshaibani consortiumblockchainbaseddecentralizedstockexchangeplatform AT noureddinelasla consortiumblockchainbaseddecentralizedstockexchangeplatform AT mohamedabdallah consortiumblockchainbaseddecentralizedstockexchangeplatform |