An on-chain order book auction is a type of auction that takes place on a blockchain platform, where buyers and sellers place orders to buy or sell a particular asset, and these orders are matched based on certain criteria.
In an on-chain order book auction, the buyers and sellers place their orders on the blockchain platform, and the platform matches the orders based on their price and volume. The auction typically has a set end time, and at the end of the auction, the orders that have been matched are executed, and the trades are settled on the blockchain.
The on-chain order book auction is commonly used in the trading of cryptocurrencies and other digital assets on blockchain platforms. It provides a decentralized, transparent, and efficient way to trade these assets, as all the orders and trades are recorded on the blockchain and can be accessed by anyone.
Unlike centralized exchanges, where the order book is maintained by the exchange operator, in an on-chain order book auction, the order book is maintained on the blockchain and is accessible to anyone. This ensures that the auction is transparent and tamper-proof, as all the orders and trades are recorded on the immutable blockchain ledger.