Order Book#

The Seesaw order book is a fully on-chain matching engine that pairs buyers and sellers of YES shares. Understanding how it works helps you place better orders and get better prices.

Order Book Architecture#

Single Book Design#

Seesaw maintains one order book per market for YES shares only. All NO orders are converted:

Why Single Book?#

1. Simpler matching - One book instead of two
2. Better liquidity - All orders in one place
3. No arbitrage - Prices stay in sync
4. Consistent pricing - YES @ 0.60 ↔ NO @ 0.40

Order Types#

Limit Orders#

Specify exact price. Order rests on book until filled or cancelled.

Market Orders (Effective)#

Submit limit at extreme price to guarantee fill:

Buy YES "at market":
└── Submit Buy YES @ 1.00 (max price)
└── Fills against best available asks

Sell YES "at market":
└── Submit Sell YES @ 0.01 (min price)
└── Fills against best available bids

Price-Time Priority#

Orders match based on price first, then time:

Matching Algorithm#

incoming_order = Sell 100 YES @ 0.55

while incoming_order.quantity > 0:
    best_bid = orderbook.get_best_bid()

    if best_bid is None:
        break  # No bids

    if best_bid.price < incoming_order.price:
        break  # Price doesn't cross

    # Match at bid price (price improvement for seller)
    fill_qty = min(incoming_order.quantity, best_bid.quantity)
    execute_trade(buyer=best_bid.owner, seller=incoming_order.owner,
                  price=best_bid.price, quantity=fill_qty)

    incoming_order.quantity -= fill_qty
    best_bid.quantity -= fill_qty

if incoming_order.quantity > 0:
    orderbook.add_ask(incoming_order)  # Rest remainder

Tick Size#

Prices must align to tick boundaries:

Tick Rounding Rules#

• Bids round DOWN to nearest tick
• Asks round UP to nearest tick

This ensures the protocol never loses money on rounding.

No Crossed Book Invariant#

The order book cannot have bids >= asks:

If a new order would cross, it immediately executes against resting orders until uncrossed or fully filled.

No Naked Shorts#

Users can only sell shares they own:

Alice owns: 50 YES shares

✓ Sell 50 YES @ 0.60  (valid)
✗ Sell 100 YES @ 0.60 (rejected - insufficient shares)

To "short" YES (bet on DOWN), users must:

1. Buy NO shares, OR
2. Mint YES+NO pair and sell YES

Order Lifecycle#

Order States#

Reading the Order Book#

Depth Chart#

Price    Bid Size    Ask Size    Cumulative
─────────────────────────────────────────────
0.65                 200         650
0.60                 300         450
0.58                 150         150
────────── spread ──────────
0.55     100                     100
0.54     250                     350
0.52     500                     850

Key Metrics#

Order Book Events#

Events emitted for indexers and UIs:

// Order placed
{
  type: "OrderPlaced",
  orderId: "abc123",
  side: "Bid",
  price: 5500,  // 0.55 in bps
  quantity: 100,
  owner: "7abc..."
}

// Trade executed
{
  type: "Trade",
  price: 5500,
  quantity: 50,
  maker: "7abc...",
  taker: "9xyz...",
  makerFee: -5,   // rebate
  takerFee: 15
}

// Order cancelled
{
  type: "OrderCancelled",
  orderId: "abc123",
  remainingQuantity: 50
}

Best Practices#

For Makers (Liquidity Providers)#

1. Quote both sides - Earn rebates on both bid and ask
2. Manage inventory - Don't accumulate too much of one side
3. Update frequently - Adjust to price movements
4. Watch the spread - Wider spread = more profit per trade

For Takers (Traders)#

1. Check liquidity - Ensure enough depth for your size
2. Use limit orders - Avoid slippage with price limits
3. Split large orders - Better execution across price levels
4. Time your trades - Spreads widen near market close