What Is the Difference between an AMM and a Central Limit Order Book (CLOB)? ⎊ Path

What Is the Difference between an AMM and a Central Limit Order Book (CLOB)?

A CLOB matches buyers and sellers based on specific limit and market orders, requiring a counterparty for every trade. An AMM uses a liquidity pool and a smart contract algorithm to facilitate trades, where users trade directly against the pool.

CLOBs are common in traditional exchanges and rely on market makers; AMMs are decentralized and rely on liquidity providers.

What Is the Primary Difference between an RFQ Platform and a Central Limit Order Book (CLOB) in Derivatives Trading?

What Are the Key Differences between an RFQ Platform and a Central Limit Order Book (CLOB)?

How Does an exchange’S’matching Engine’ Process Different Types of Orders?

What Is the Difference between an Order Book and a Liquidity Pool?

What Are ‘Limit Orders’ and ‘Market Orders,’ and Which Type of Order Pays the Cost of Immediacy?

What Is the Difference between an Order Book DEX and an AMM-based DEX?

What Is the Fundamental Difference between an Order Book and an Automated Market Maker (AMM)?

What Is the Primary Difference in How Slippage Is Calculated on an AMM versus a CLOB?

Glossar

CLOB

Execution ⎊ Central Limit Order Books (CLOBs) represent the foundational infrastructure for price discovery and trade execution within cryptocurrency exchanges and regulated derivatives markets, functioning as a digitized order book mirroring traditional financial systems.

Central Limit Order Book

Aggregation ⎊ This mechanism collects all outstanding buy and sell orders into a single transparent ledger.