API synchronization affects the effectiveness of an arbitrage bot's ability to compare prices on exchanges in the same point in time, because the essence of any arbitrage strategy is based on price difference existing temporarily. If the price feed from one exchange is delayed compared to the other, then the bot can trade according to a non-existing price difference.
Syncing multiple exchanges requires dealing with different frequency of data update, authorization processes and data structures within every API. When building a system without taking into account such differences, all the data is considered to be up to date, and therefore errors in this case become extremely hard to track after executing trades.
Apart from comparing prices, API synchronization should also take into account the changes in order book, since the liquidity level changes all the time and may affect the possibility of capturing the spread. This problem is especially relevant in the context of the work of a Crypto Arbitrage Trading Bot Development Company or crypto arbitrage bot development company, as success there largely depends on proper synchronization of various data sources.
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