Order Book

Definition ∞ An order book is an electronic record listing all active buy and sell orders for a specific asset on an exchange. It displays the current market depth, showing the quantities of an asset buyers are willing to purchase (bids) and sellers are offering (asks) at various prices. This data provides transparency into market sentiment and liquidity, informing trading decisions. In digital asset exchanges, order books are fundamental for price discovery and matching traders.
Context ∞ The discussion surrounding order books in crypto often contrasts centralized exchange models with decentralized versions, such as those used in some decentralized exchanges (DEXs). A key debate involves the efficiency and fairness of different order book implementations, particularly concerning front-running and MEV (Maximal Extractable Value) in decentralized settings. Future developments will likely include hybrid order book models and advanced matching engines that balance speed with censorship resistance.