Order Permanence describes the characteristic of an order remaining on a trading venue’s order book until it is either fully executed, canceled by the submitter, or expires due to a time-in-force constraint. Its purpose is to signify the persistence of passive liquidity and the duration a trading intention remains active in the market.
Mechanism
In a centralized exchange, order permanence is maintained by the exchange’s matching engine, which stores limit orders awaiting a contra-side match. In decentralized finance (DeFi), this can involve orders held within smart contracts or off-chain order books, pending eventual on-chain settlement. The system ensures the order’s visibility and eligibility for matching until its conditions are met or terminated.
Methodology
The strategic implication for liquidity providers and institutional traders is the ability to signal trading intent and capture bid-ask spread over time without immediate execution pressure. Orders with high permanence contribute to market depth and often seek price improvement, balancing the trade-off between execution certainty and passive liquidity provision in competitive crypto markets.
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