GDEX Documentation
  • Welcome to GDEX!
  • đź”– Limit Order
    • What is a “Limit Order”?
    • Differences between Limit Orders in DEX and CEX
    • Technical advantages of the Limit Order on GDEX over other DEX platforms
    • Creating a Limit Order on GDEX
      • Creating a Limit Order
      • Copying, Depositing, Canceling Orders
  • đź”– Stop Limit Order
    • What is a “Stop Limit Order”?
    • Stop Limit terms and mechanics
    • Why should you use Stop Limit Order?
    • Creating a Stop Limit Order on GDEX
  • đź”– Order Book
  • đź”– My Orders
    • Balances
    • Order status
    • Copy past orders
    • Cancel orders
    • Filtering and Sorting
  • đź”– FAQ
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  1. đź”– Limit Order

Differences between Limit Orders in DEX and CEX

Limit Orders on Decentralized Exchanges work differently than Limit Orders on Centralized Exchanges.

According to Binance’s documentation, Limit Orders on Binance work the following way; “When a limit order is submitted, it will be placed on the order book immediately. But It won’t be filled unless the coin price reaches the specified limit price (or better). For example, you want to sell 10 BNB at $600, and the current price is $500. You can place a BNB sell limit order of $600. When the BNB price reaches the target price or above, your order will be executed depending on market liquidity. If there are other BNB sell orders placed ahead of yours, the system will execute those orders first. Your limit order will be filled afterward with the remaining liquidity.” (https://academy.binance.com/en/articles/what-is-a-limit-order)

And here is the Market Order definition on Binance. “A market order is an order to immediately buy or sell at the best available price. It needs liquidity to be filled, meaning that it is executed based on the limit orders already placed on the order book. If you want to buy or sell instantly at the current market price, setting a market order is your best option. For example, the price of BNB might be rising rapidly, and you want to buy it ASAP. You're willing to take the market's price so long as you can purchase BNB instantly. In this case, you'd make a market order on your chosen exchange.” (https://academy.binance.com/en/articles/what-is-a-market-order)

Based on the above definitions, the major differences are;

  1. Limit Orders on Centralized Exchanges are used as liquidity for Market Orders. Meaning that these types of limit orders are executed only when there are matching market orders or limit orders. While Limit Orders on Decentralized Exchanges run against the liquidity and they are executed when the price of the token meets the price requirement of the limit order.

  2. Limit Orders on Centralized Exchanges are executed in the order of FIFO (First In First Out). However on Decentralized Exchanges, the limit orders with higher gas fees get executed earlier than the ones with lower gas fees which introduces the risk of Front Running. (For more information about Front Running, please check this article: https://cointelegraph.com/explained/what-is-front-running-in-crypto-and-nft-trading)

  3. Limit Orders on Centralized Exchanges can be partially filled. For example if you want to sell 1 BTC at the price of $50K, and the price is moving rapidly, a limit order can be partially filled by “half” when the price requirement is first met. Once the price reaches $50K again, the limit order can be completed. However, limit orders on Decentralized Exchanges are singular in nature. Which means all limit orders are fully executed, no partial executions.

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Last updated 2 years ago