Onchain Orderbook

Definition ∞ An onchain orderbook is a record of buy and sell orders for digital assets entirely stored and processed on a blockchain. Every order submission, modification, and cancellation is a transaction recorded on the distributed ledger. This design promotes transparency and resistance to manipulation.
Context ∞ Onchain orderbooks are a core element of many decentralized exchanges (DEXs), differing from the offchain orderbooks used by centralized exchanges. While offering greater openness and censorship resistance, they can encounter issues related to transaction fees and network delays, affecting trading effectiveness. Progress in layer-2 solutions and specialized blockchains aims to address these scalability concerns, making onchain orderbooks more competitive.