In this guide
Every transaction on PolyGram and Polymarket is processed via a Central Limit Order Book—the identical order-matching system employed by NASDAQ, NYSE, and all leading financial exchanges worldwide. Grasping how CLOB functions will sharpen your approach as a prediction market participant. Let us walk through the fundamentals.
What Is a Central Limit Order Book?
A Central Limit Order Book (CLOB) is a digital ledger containing all active buy and sell orders for a given asset, organised by price level and timestamp. When an order enters the system, the matching engine seeks to pair it with orders on the opposing side of the book.
Within prediction markets, the "asset" refers to a YES or NO contract in a given event. The CLOB for "Will Bitcoin exceed $100K in 2026?" displays every outstanding order to purchase YES contracts and every outstanding order to sell YES contracts (or equivalently, to purchase NO contracts).
Reading the Order Book
- Bids (buy orders): Participants seeking to acquire YES contracts at a stated price or lower. Displayed in descending order by price.
- Asks (sell orders): Participants prepared to dispose of YES contracts at a stated price or higher. Displayed in ascending order by price.
- Best bid: The highest price at which someone presently wishes to acquire YES contracts
- Best ask: The lowest price at which someone presently wishes to sell YES contracts
- Spread: The gap between best ask and best bid. Narrower spread indicates greater market liquidity.
How Orders Match
Upon submission of a market order (acquiring at prevailing price), the CLOB engine:
- Identifies the current best ask (lowest available seller price)
- If your bid price ≥ best ask: the transaction completes at the ask price
- Your order fulfils in full or in part based on existing supply
- Any unfilled balance becomes a fresh bid within the book
Limit orders function comparably but only execute once the market reaches your designated price threshold.
Why CLOB Matters for Traders
- Price improvement: Your order settles at the most advantageous available price, rather than a predetermined surcharge
- Transparency: All pending orders remain visible to you before you commit to a transaction
- No counterparty risk: The CLOB matching engine, not an individual market maker, processes your transaction
- Better prices vs AMM: CLOB-based venues typically deliver narrower spreads relative to automated market makers (AMMs)
CLOB vs AMM in Prediction Markets
Polymarket's CLOB (utilised by PolyGram) differs fundamentally from AMM-based prediction venues such as early iterations of Augur. CLOBs deliver granular pricing and order depth; AMMs furnish perpetual liquidity availability yet incur wider slippage on substantial orders. In the majority of prediction market scenarios, CLOB architecture proves advantageous.
FAQ
- What is slippage in a CLOB prediction market?
- Slippage materialises when your order volume surpasses the liquidity obtainable at the best price, forcing portions of your order to complete at less favourable rates. PolyGram calculates and displays projected slippage prior to you finalising any transaction.
- Can I place limit orders on PolyGram?
- Certainly — you may set an upper limit for YES contract acquisition or a floor for NO contract acquisition. Your order remains in the CLOB until the market reaches your specified threshold or you withdraw it.
- How often does the CLOB update?
- The Polymarket CLOB refreshes instantaneously around the clock. PolyGram synchronises with these changes at near-zero delay via its CLOB connection.