Limit Orders

SuiDEX's limit orders use the AMM as the source of liquidity and inventory. Depending on the trading volume and liquidity of the pair being traded, limit orders may cause either significant or minimal slippage. Despite this, the limit order owner receives the order's placed amount, regardless of the slippage.

Market-making bots that scan and execute trades based on their fees and strategies are needed for limit orders to work. Once a limit order to purchase a particular token with a certain amount of ETH is created and approved, it is filled only when the AMM can support that purchase without any loss to the market-making bot(s). Since there are no automatic executions of manually placed events such as a limit order, a free market of bot(s) continuously scans limit orders for any that can be filled, and they charge additional fees. Bot fees do not affect the limit order, but only the price at which the trade is executed at the AMM level.

If the limit order cannot execute without creating a 10% slippage due to low liquidity in comparison to the trade, the trade will execute once the token is trading at a minimum of -10% of the purchase price. This is the minimum deviation that needs to happen for that order to fill successfully. Although the AMM pair is affected by slippage, the limit order is filled at the requested price.

Furthermore, inventory-based market-making is also possible without relying on the Switch native AMM module as a liquidity provider. Detailed information about the design specifications, examples, and market-making bots will be available soon.