Definition ∞ A Two Sided Auction is an auction format where both buyers and sellers submit bids and offers, respectively, and transactions occur when a buyer’s bid matches a seller’s offer. This contrasts with single-sided auctions where only one party makes proposals. It facilitates price discovery through competition on both sides of the market.
Context ∞ Two-sided auctions are a fundamental component of order book-based decentralized exchanges and traditional financial markets. In cryptocurrency news, discussions often relate to the efficiency and liquidity provided by such mechanisms, especially when comparing them to automated market makers. Their performance is crucial for the efficient price discovery of digital assets.
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