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Order Book Meaning

An electronic list of buy and sell orders for a specific asset, organized by price level. It visualizes the supply and demand at any given moment.

The "Ask" side shows sellers wanting to sell at higher prices, and the "Bid" side shows buyers wanting to buy at lower prices. The gap between the highest bid and the lowest ask is the Spread.

A "Deep" order book has many orders at every price level, meaning you can buy a large amount without moving the price much. A "Thin" order book has few orders, leading to high volatility and slippage.

Centralized exchanges (like Binance) rely on order books. Most Decentralized Exchanges (like Uniswap) replaced order books with Automated Market Makers (AMMs), though some newer DEXs are bringing order book models back on-chain for professional traders.

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