Frequent Batch Auctioning
Executing orders in a sequential manner encourages validators to arrange transactions in ways that can be profitable for themselves. For example, when they see an incoming market order, they can include their own market order to buy that asset, and their own limit order to sell that asset at a higher price before the incoming transaction is processed. To discourage this form of MEV (maximal extractable value) United Protocol's matching engine aggregates all market orders and executes them at the same uniform clearing price.
For example, if the order book has two asks (sell orders) orders for prices P1 and P2 and there are two incoming bids (buy orders) B1 and B2 , then both B1 and B2 will get executed at the uniform clearing price
rather than having B1 getting executed at P1 and B2 getting executed at P2. This results in the existing limit orders getting filled at their intended price (P1 and P2) while the incoming market orders get a fairer price.
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