A CLOB stands for Central Limit Order Book- it's the core mechanism that most traditional exchanges use to match buyers and sellers.

Basic Structure: A CLOB maintains two sides - a bid side (buy orders) and an ask side (sell orders). Orders are arranged by price priority, with the best bids (highest buy prices) and best asks (lowest sell prices) at the top.

Order Matching: When a new order comes in, the system automatically matches it against the best available orders on the opposite side. For example, if you place a market buy order, it gets matched with the lowest-priced sell orders first.

Price Discovery: The spread between the highest bid and lowest ask represents the current market price. As orders get filled, new orders move up in the queue, continuously updating the market price.

In Traditional Finance: Stock exchanges like NYSE and NASDAQ use CLOBs. Your broker sends your order to the exchange's order book where it waits to be matched.

In Crypto:

• Centralized exchanges like Binance use CLOBs but typically run them off-chain for speed
• Most DEXs historically used Automated Market Makers (AMMs) instead of order books
• Newer DEXs like Hyperliquid bring CLOB functionality on-chain, combining the familiar order book experience with decentralized execution