Order Book
A list of buy and sell orders for an asset, organized by price level, used by traditional and some decentralized exchanges.
In-Depth Explanation
Order books show resting limit orders at various prices—bids (buy orders) and asks (sell orders). The spread between best bid and best ask indicates liquidity. Unlike AMMs where you trade against a pool, order books match buyers with sellers directly. On-chain order books (dYdX, Hyperliquid) face latency challenges but enable familiar trading interfaces.
Related Terms
Decentralized Exchange
DEXA cryptocurrency exchange that operates through smart contracts without a central authority or custody of user funds.
Centralized Exchange
CEXA cryptocurrency exchange operated by a company that holds custody of user funds and maintains order books.
Automated Market Maker
AMMA smart contract that provides liquidity and enables trading using a mathematical formula instead of an order book.
Limit Order
An order to buy or sell at a specific price or better, which executes only if the market reaches that price.
More in Trading & Markets
View all →Slippage
The difference between the expected price of a trade and the actual executed price.
Maximal Extractable Value
MEVValue that can be extracted by reordering, inserting, or censoring transactions within a block.
Sandwich Attack
An MEV extraction technique where an attacker places transactions before and after a victim's trade to profit from the price impact.
Frontrunning
Placing a transaction ahead of a known pending transaction to profit from the anticipated price movement.