# Central Limit Order Book

### What is Central Limit Order Book ?

A Central Limit Order Book (CLOB) is a market mechanism where all buy and sell orders are centralized into a single order book. These orders are organized by price and time of placement, fostering a transparent and efficient trading environment.

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## Why Use CLOB for Onchain Prediction Markets?

#### **Transparency and Trust**

With all orders publicly displayed, participants can rely on the fairness and transparency of the market. Order book visibility ensures that users can make informed decisions without concerns about third-party manipulation. Trust is crucial in prediction markets, where participant confidence is key.

#### **High Security**

Leveraging blockchain technology ensures that data and transactions are secure from attacks and fraud. Transactions are executed automatically via smart contracts, reducing the risk of third-party interference.

#### **Accurate Pricing**

CLOB facilitates precise order matching on the order book, unlike Automated Market Maker (AMM) models. This results in significantly lower price slippage for orders.

**Low Transaction Fees**

The automation and transparency of blockchain technology help minimize intermediary costs, resulting in lower transaction fees for users.


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