Kronos Adopts AWS Graviton Instances, Reducing Latency by 10% for Better Trading Performance
We are excited to announce that Kronos Research, a leading quantitative trading firm and token market maker, has adopted AWS Graviton-based EC2 instances to boost trading performance. By using AWS Graviton instances, Kronos can save up to 20% on Amazon Elastic Compute Cloud (Amazon EC2) costs and decrease latency by 10% for heavy cloud workloads, all while ensuring industry-leading data protection.
Given that Kronos requires 4,000 to 6,000 cores during peak computation loads, Amazon EC2 efficiently supports trading algorithms in both production and research simulations. This new capability has significantly enhanced Kronos’s competitiveness in the cryptocurrency market, providing high predictive accuracy and trading efficiency.
Kronos’s transition to Graviton instances underscores its commitment to technological innovation and operational efficiency. CEO Hank Huang highlights that despite increased competition, Kronos remains a top 10 market maker on major exchanges, with an average daily trading volume of up to $23 billion.
Speed is Key to Profits in High-Frequency Quantitative Trading
At the core of its high-frequency quantitative trading business, Kronos focuses on analyzing and predicting micro-market pricing and order composition in cryptocurrencies. By observing and analyzing supply and demand changes in order books, Kronos can predict the total value of crypto prices within minutes or seconds and execute numerous trades in a very short time to profit.
Low latency is crucial for high-frequency quantitative trading, as slight delays can impact trading profits. “Even a difference of 100 microseconds can affect transaction probability,” Hank explains. Therefore, Kronos has chosen AWS because major exchanges are built on AWS cloud services, eliminating the physical distance between the server and the exchange, ensuring extreme speed while providing quotes, and executing trades with low latency.
Maximizing the Advantages of AWS Graviton Processors
The shift to Graviton instances is driven by cost efficiency and the advantage of having multiple independent processor cores. With this significant enhancement, Huang notes, “We plan to migrate operations, messaging, alerts, and dashboard microservices to Graviton instances, exploring more possibilities.” The development team has also utilized Graviton’s capabilities to accelerate computing, applying them to decentralized finance projects to boost Kronos’s competitiveness in achieving extreme speed and low latency.
Cryptocurrency trading is diverse and complex, with some activity occurring on large centralized exchanges and other activity on blockchains. Kronos’s Graviton application is designed to capture blockchain transaction data at high speeds, which is crucial for accurate cryptocurrency price predictions. This capability allows Kronos to gain market insights, capture speedy transaction data from blockchains, and accurately predict price trends.
Additionally, Kronos is developing a new generation of low-frequency trading systems to predict longer-term cryptocurrency price trends. Hank explains that this system requires handling more feature data in predictions and needs to monitor more market trends and trading targets. High-frequency trading systems strive for extreme speed with single-core processing for lightweight, rapid quoting, ordering, and cancellation. In contrast, low- and medium-frequency trading systems require more data and computational power, making multi-core design more suitable, and Graviton instances an ideal platform.
Strengthening Security with AWS
Kronos has also enhanced its security management by adopting AWS Secrets Manager to store and protect sensitive data and using AWS Key Management Service (KMS) for additional encryption. Secrets Manager and KMS are deployed in separate AWS accounts from the main application to ensure independence.
By leveraging AWS Graviton and enhancing its security measures, Kronos continues to lead in the high-frequency quantitative trading space, driving innovation and maintaining its competitive edge in the cryptocurrency trading market.
