> ## Documentation Index
> Fetch the complete documentation index at: https://docs.ascend.market/llms.txt
> Use this file to discover all available pages before exploring further.
# CLOB & Matching
> How the orderbook executes trades on probability prices
Ascend uses a Central Limit Order Book (CLOB) for price discovery and trade execution. Traders place bids and offers at specific probability prices, and the matching engine pairs compatible orders.
This is the same orderbook model used by major exchanges. No AMM, no bonding curves, no protocol-owned liquidity. Just traders trading with each other.
***
## How the Orderbook Works
The orderbook is a live list of open orders, split into two sides:
* **Bids (LONG):** Buyers posting "I will pay up to this price." The highest bid is the best one. It is closest to getting filled.
* **Asks (SHORT):** Sellers posting "I will accept this price or higher." The lowest ask is the best one. It is closest to getting filled.
The gap between the best bid and the best ask is called the **spread**. That is the cost of trading immediately.
**Example: BTC \$100k market:**
| Bids (LONG) | Price | Asks (SHORT) |
| ----------- | ----- | ------------ |
| | 65% | 500 USDC |
| | 64% | 1,200 USDC |
| 800 USDC | 63% | |
| 2,000 USDC | 62% | |
| 1,500 USDC | 61% | |
Reading this: the best bid is **63%** (the highest price a buyer posted). The best ask is **64%** (the lowest price a seller posted). The spread is **1%**, the gap between them.
* Want to go **LONG** right now? You match the best ask and pay **64%**.
* Want to go **SHORT** right now? You match the best bid and receive **63%**.
Want a better price? Place a limit order and wait for someone to match you.
***
## Order Types
Ascend supports standard order types:
You specify a price and size. Your order rests on the book until:
* It gets matched with an incoming order
* You cancel it
* It expires (if you set a time limit)
**Example:** You place a limit order to LONG 500 USDC at 62%. Your order sits on the bid side. If someone comes in willing to SHORT at 62% or lower, you get filled.
**Use when:** You want a specific price and are willing to wait.
You specify only size. Your order executes immediately at the best available price.
**Example:** You place a market order to LONG 500 USDC. The best ask is 64%. You get filled at 64%.
**Use when:** You want to enter or exit immediately and accept the current price.
***
## Matching Logic
The matching engine follows price-time priority:
1. **Best price first**: Orders at better prices get filled before orders at worse prices
2. **Earlier orders first**: At the same price, older orders have priority
This ensures fair execution with no preferential treatment.
**Example:**
Three traders place LONG limit orders at 62%:
| Trader | Time | Size |
| ------ | -------- | -------- |
| Alice | 10:00:01 | 500 USDC |
| Bob | 10:00:05 | 300 USDC |
| Carol | 10:00:10 | 400 USDC |
A new SHORT market order comes in for 600 USDC.
Fills:
* Alice gets filled: 500 USDC (she was first)
* Bob gets filled: 100 USDC (partial fill, he was second)
* Carol gets nothing yet (Bob's remaining 200 USDC fills before her)
Bob's remaining 200 USDC order stays on the book.
***
## Partial Fills
Orders can be partially filled when available liquidity is insufficient.
**Example:**
You place a market order to LONG 1,000 USDC. The orderbook looks like:
| Price | Ask Size |
| ----- | -------- |
| 64% | 400 USDC |
| 65% | 300 USDC |
| 66% | 500 USDC |
Your order fills across multiple price levels:
* 400 USDC at 64%
* 300 USDC at 65%
* 300 USDC at 66%
Total: 1,000 USDC filled at an average price of approximately 64.9%.
This is called "walking the book." Large orders may experience slippage if liquidity is thin.
***
## Spread and Liquidity
The spread is the gap between the best bid and best ask.
| Spread | Meaning |
| ---------------- | ---------------------------------------------------- |
| Tight (0.1-0.5%) | High liquidity, active market, low trading cost |
| Medium (0.5-2%) | Normal liquidity, moderate trading cost |
| Wide (2%+) | Low liquidity, higher trading cost, use limit orders |
**Example:**
* Best bid: 62%
* Best ask: 64%
* Spread: 2%
If you market buy and immediately market sell, you lose 2% just to the spread. In tight markets, this cost is much lower.
***
## Order Validation
Every order is validated before being accepted:
You must have sufficient margin to cover the position if the order fills. Orders that would exceed your available margin are rejected.
The resulting position must stay within the market's maximum leverage. Orders that would create excessive leverage are rejected.
Orders at extreme prices (far from current market) may be rejected or flagged. This prevents fat-finger errors and manipulation.
Orders must meet minimum size requirements and cannot exceed maximum position limits.
***
## Matching vs Risk Management
The matching engine and risk engine are separate:
| System | Responsibility |
| --------------- | -------------------------------------------- |
| Matching Engine | Pairs compatible orders, executes trades |
| Risk Engine | Enforces margin, leverage, liquidation rules |
The matching engine is "risk-neutral." It only matches orders. All safety guarantees are enforced by the risk engine independently.
**Key invariant:** No order can be matched unless margin and leverage requirements are satisfied at execution time. If a match would violate risk constraints, it is rejected.
***
## Why CLOB for Prediction Markets
The orderbook model provides:
* **Transparent pricing**: All bids and offers are visible
* **Fair execution**: Price-time priority treats everyone equally
* **No slippage from curves**: You trade at discrete prices, not along a bonding curve
* **Real depth**: You can see exactly how much liquidity exists at each price level
* **Professional compatibility**: Market makers and algorithmic traders can participate using familiar infrastructure
This is what allows Ascend to attract the liquidity that prediction markets need.
***
## Continuous Price Discovery
Prices on Ascend update continuously as orders are placed, matched, and canceled.
Every trade prints a new price. Every new limit order changes the orderbook state. The "current price" is always the midpoint between best bid and best ask, or the last traded price.
This continuous process is how probability prices evolve in real time as traders express their views.
***
Learn how markets resolve and positions settle