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Advanced Orders FAQ

Is this an orderbook? How are the limit orders filled?

Limit orders are taker orders that are filled against the DAMM.ย  The orders are stored and settled on chain. The queue is constructed by a network of off-chain keepers that are incentivised to fill orders against the DAMM based on the age.

Is there a charge for placing an order? Is that charged in SOL or USDC?

Network fees aside, there is no additional SOL charge for placing an order. The taker fee is charged in USDC and is only applied if the trade is filled. If a trade is only partially filled, the fee charged will be for the notional amount filled.

Is there a charge for canceling an order? Is that charged in SOL or USDC?

No - if you cancel an open order, you will not be charged by the protocol. Fees are only charged on filled orders.

Can I place a maker order? With a fee discount/rebate?

Not currently (please show interest on Drift's Canny Board).

Is my order guaranteed to execute?

These orders are executed 'best-effort' by the network with special economic incentives designed to mimic the typical execution order seen in a Centralised Limit Order Book (CLOB).

What are conditional limit orders?

Conditional limit orders are only placed on the market when the conditions for the orders are met. For instance, stop orders are only placed on the market when the trigger price is hit (the condition being the trigger price).

What is the difference between a stop market and a stop limit?

Both orders are used as downside protection to stop losses. However, where they differ is how the orders are executed. A stop market order is immediately sold on the market in full once the trigger price is reached. Stop limits are a little different - rather than opening a market order, it opens a new limit order which can have a different price to the trigger price used to create the limit order.

What is the difference between take profit market and take profit limit?

The difference is in the way these orders are settled. Take profit markets are immediately sold on market upon hitting its trigger price. On the other hand, take profit limits are not sold immediately but partially filled as limit orders. The subsequenty limit orders donโ€™t need to have the same target price as their trigger price.

What is the difference between a stop loss and a take profit?

Both order types are set on the market when their triggers are met. Where the two orders differ is in their direction. Stop losses are used for downside protection to close losing positions and take profits are used to close positions that are in profit.

What does trigger price mean?

Trigger price refers to the price the particular asset needs to hit before the limit order can be executed against the DAMM by a Keeper.

How is an orderbook constructed off-chain?

When a user submits a limit order, it is submitted onto the Solana blockchain. This is known as an on-chain order.

A series of "Keeper Bots" monitor open limit orders on-chain. This is similar to the way liquidator bots track all user positions to monitor liquidiation eligibility. A Keeper Bots monitors eligibility of limit orders to be filled against the DAMM.

To accomplish this, Keeper Bots construct an orderbook structure off-chain categorising all the open limit orders by price, age, and then position size. Once the particular requisite trigger condition is met, the Keeper Bot will fill the oldest valid order against the DAMM for a financial incentive. If two orders have the same age, the Keeper Bot will most likely fulfill the order that is larger in size (up to the incentive cap).

Why is the orderbook constructed off-chain?

Drift doesn't construct a central limit orderbook on-chain and instead opts for a flat structure to achieve cost effective scalability. The network of Keepers monitor on-chain orders and construct their own orderbooks off-chain. This achieves (1) decentralisation (as each Keeper stores its own copy of the orderbook); and (2) computational efficiency (as the high throughput and intensive computations are calculated off-chain).

Theoretically, this should also translate to better performance during periods of high network congestions.

What is Reduce only?

Reduce only orders guarantees that you will:

  • NOT be made longer if you are already long (or shorter if you are already short); and
  • NOT be made short if you were previously long (or vice versa).

What are Keeper bots? How can I participate?

A Keeper will track and fill orders and earn a reward. Guide to run is listed in Running a Keeper Bot. Incentive structure is listed in Decentralised Limit Orderbook (DLOB).

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Updated 31 Mar 2022
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