Jump Crypto has proposed the DFBA mechanism to address the challenges of traditional CLOBs on the blockchain.
BlockBeats News, August 23rd, the market maker Jump Crypto research team published an article proposing a new trading mechanism called Dual Flow Batch Auction (DFBA), aiming to address the challenges of traditional Continuous Limit Order Books (CLOBs) on the blockchain.
It is reported that CLOBs rely on continuous matching and a time priority mechanism, leading to latency arbitrage, MEV (Miner Extractable Value) issues, and adverse trading liquidity, increasing market trading costs.
DFBA conducts two independent auctions every 100 milliseconds, dividing orders into Maker and Taker groups, and completes transactions at a single fair settlement price. This mechanism eliminates the time priority, avoids competition among liquidity providers, and shifts the competitive focus from speed to price and scale.
Compared to traditional designs, DFBA can provide tighter quotes, deeper liquidity, while protecting natural traders from the effects of latency arbitrage and MEV front-running. Jump Crypto believes that this design inherits the advantages of previous trading models, such as continuous liquidity and auction fairness, while avoiding drawbacks such as high slippage and liquidity fragmentation, providing market participants with a more fair and efficient trading environment.
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