How Do Limit Orders Function on an AMM-based Decentralized Exchange? ▴ Learn

How Do Limit Orders Function on an AMM-based Decentralized Exchange?

Limit orders on an AMM-based DEX are typically implemented using an external service or a specialized smart contract layer. Since the AMM itself only supports market-like swaps, the external service holds the user's tokens and monitors the AMM's price.

When the desired limit price is reached, the service executes a market swap on behalf of the user. This is an off-chain/on-chain hybrid solution, not a native AMM function.

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