The FIX Protocol and Beyond

In 1992, Robert Lamoureux and Chris Morstatt authored a release of the Financial Information eXchange (FIX) protocol. This ushered in a new standardized method for establishing communication and relaying direct insight between enabled operating financial firms, primarily at the time between broker-dealers and their respected clients.

Before the introduction of FIX, the existing methodology for settlement and direct communication was reliant solely on verbal telecommunication channels between brokers and institutions. As global innovation scaled at never before witnessed heights, along with the launch of the internet, this process became dated and introduced a myriad of malicious attack vectors and simple hangups that couldn’t keep up with demand.

By introducing the FIX protocol, there was now a vendor-neutral messaging solution that established communication for end-users participating in markets. It gave the ability to relay pre-trade communications, trade execution, and enabled a streamlined process for data aggregation for regulatory reporting and auditing. FIX introduced what is now the standardized execution management system (EMS) that nearly every major institution has adopted in the United States.

Coincidentally, just like the initial timeline of market introduction to FIX, a new wave of financial product engagement presented itself in the last decade. Decentralized finance and cryptocurrencies have taken the world by storm and caught the attention of financial entities ranging in all sizes, including the world's general population.

Every firm, whether they are against the grandiose vision that crypto seeks or interested in coinciding with its ethos, is seeking market fits for how they can make these new financial products work for them and their client pools. The FIX community understands this and has released an innovative API for custodial centric interested parties to participate in this growing sector. Unfortunately, their vision for every major entity adopting this API workflow comes up short as it does not interact directly with the respected protocols and products it’s placing orders for.

With Re, we have seen the core concepts that FIX has ushered in the past and are taking their vision even further with the first-ever on-chain protocol that enables every party familiar with the standardized process FIX brought, and replicating that product suite and comms layer directly to the respected assets being traded within the Cosmos ecosystem.

With FIX, the previous engagement for token settlement relied on end-users interacting within an EMS, which would communicate with third-party liquidity providers and custodial market participants, diluting trade execution workflows and depending on execution intention, less favorable return. By introducing a native "EMS" protocol interacting with the Cosmos ecosystem, the enablement of a myriad of untapped market potential and negating previous latency metrics in the trading order flow allows participants to interact within a financial market unlike ever before. Higher arbitrage returns versus centralized custodial players, direct communication with the protocol negating 3rd party order fees, and base layer benefits are just the start for what Re enables versus the previous traditional method in utilizing the FIX API and similar products.

At a protocol level, Re alone ushers in a new form of communication that enables execution unlike anything before. Taking it further, Re enables native indexing, native options mechanics, and so much more. All within a regulatory-enabled framework that allows any market participant to engage with.