Continuous Double Auctions

Continuous double auctions are the standard market mechanism used in most global exchanges, where buyers and sellers continuously submit orders that are matched immediately if prices align. This model allows for rapid price discovery and high liquidity, but it is also susceptible to high-frequency trading strategies that exploit millisecond differences in order processing.

In a continuous auction, the market state is updated in real-time, meaning that participants who can react the fastest have a structural advantage. While highly efficient for traditional markets, decentralized protocols are increasingly questioning if this model is appropriate for blockchain environments where transaction finality is not instantaneous.

Alternative models, such as batch auctions, are being explored to create a more balanced environment.