FOR IMMEDIATE RELEASE
7 January 2024, Mississauga, Canada: The last few years have seen the ultra low-latency (ULL) space continue its race to lower latencies, and 2025 promises to be no different. Given the continued competitiveness in financial markets and technology, regulatory and industry changes on the horizon, LDA, the leader in developing advanced ULL, FPGA and network solutions, predicts four key trends for 2025.
Exchanges moving to 25G
Vahan Sardaryan, CEO of LDA, said: "In 2024 the market discussion has been centered around exchanges considering a future move to provide 25G connectivity to trading firms, and how trading firms can ensure a smooth transition. With increasing trading volumes, we believe the future is here, and market participants need to be prepared for this change in 2025. Although some technology is yet to catch up, innovation in this space has already happened, from Layer 1 switches to timestamping, with enterprise-grade solutions now available in the market. Financial firms now have the chance to find an innovative technology partner that can support not only this change but also future changes."
Continued race to zero
As fierce competition to reduce already low latency continues, Sardaryan expects to see more market participants looking to optimize their infrastructures. For firms in HFT every nanosecond counts, and being able to shave off nanoseconds by optimizing everything from cabling to Layer 1 switches — that were once considered almost free from latency — means being and staying ahead of the market. "The feeling in the market for quite a few years has been that, as we approach the speed of light, there are not many more latency reductions to be made. But incredibly, technology keeps giving us more opportunities to reduce latency by some nanoseconds; now even picosecond reductions are beginning to be important," says Sardaryan.
Exchange fairness
Over the past year, there has been growing discussion around exchange data fairness, with the aim for all market participants to receive data at exactly the same time. A number of exchanges are now looking to address this and have started to consider the technological advancements needed to achieve this goal. Precision at the level of picoseconds, rather than the tens of nanoseconds some systems currently rely on, will be essential. The reason for timing discrepancies can vary, with causes such as cabling, market data distribution hardware and the design of the exchange systems. Some of the largest exchanges have dedicated years to ensuring that cables from each participant are the same length in order to have data fairness. However, achieving true fairness involves not just cable lengths, but also the performance of the distribution hardware, to ensure equal access to data for all participants.
Replacing end-of-life devices
In 2024, numerous popular systems in the finance industry reached the end of their lifecycle. Among them was the Arista 7150, a once revolutionary 10G low-latency Layer 3 switch. While many of these devices were replaced by FPGA/Layer 1 switches, which have much lower latency, thousands of them are still being used in less latency-critical networks where full Layer 3 functionality is needed. As these devices now require replacement, many large firms are looking for alternatives that provide a similar level of Layer 3 functionality while offering optimized latency, modern features such as 25G support and integration capabilities, including timestamping and network analytics.
LDA is developing a range of solutions on its new platform to meet these needs, with official announcements expected in Q1 2025. In addition to the Arista 7150, some FPGA/Layer 1 switches by Cisco and Arista also reached end-of-support in 2024, urging customers to explore replacement options.
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Editorial contacts:
Alla Lapidus / Alice Jiga
Moonlight IQ
Email: LDA@moonlightiq.com
Tel: +44 (0) 20 7250 4770
About LDA Technologies:
LDA Technologies is the leading provider of cutting-edge technology in the ultra low-latency, networking and FPGA spaces. Backed by 20+ years of research and development, the company offers next-generation, high-performance off-the-shelf products and consultancy services, helping clients gain a competitive advantage.
Formed in 2010, LDA Technologies is an independent, agile and flexible business developing innovative technology for HPC and Capital Markets., The company is headquartered in Mississauga, Canada. LDA's team has extensive knowledge and years of experience designing products for industries such as networking, information security, and trading.
Learn more at www.ldatech.com and follow us on LinkedIn.