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

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.

What Is the Role of an Exchange’s Matching Engine in Ensuring Market Fairness?

What Is the Difference between Price-Time Priority and Pro-Rata Order Matching?

What Is the Key Difference between a CEX and a DEX Order Book Model?

What Is a “Pro-Rata” Matching System and How Does It Differ from Price-Time Priority?

How Does a Pool Operator Ensure That a Rejected Share Is Genuinely Invalid and Not Due to a Server Error?

How Does an Exchange’s Matching Engine Speed Affect Liquidation Success?

How Does ‘Time Priority’ in Order Matching Affect the Likelihood of Positive Slippage?

What Is a ‘Stop-Market’ Order’s Priority in the Order Matching Engine?