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How Does an Off-Chain Matching Engine Work on a CEX?

The off-chain engine is a centralized server that matches orders instantly by price/time priority, with only final settlement recorded on-chain.
Greeks.Live13.11.25

How Does an Off-Chain Matching Engine Work on a CEX?

An off-chain matching engine on a CEX is a proprietary, centralized computer system that manages the exchange's order book and executes trades. Orders are submitted to the CEX's server, not the blockchain.

The engine matches buy and sell orders based on price and time priority, updating the order book instantly. Only the final settlement or withdrawal of funds is recorded on the blockchain.

This system provides high speed, low latency, and inherent privacy for pending orders, which is why it is not vulnerable to public mempool front-running.

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