# How It Works?

#### Architecture

GVEX employs a hybrid architecture that combines the speed of centralized exchanges with the security of on-chain settlement:

**Layer 1**: GANChain L1 blockchain serves as the settlement layer.

**Matching Engine**: Off-chain orderbook matching engine processes orders with sub-second latency.

**Smart Contracts**: Solidity-based contracts handle on-chain settlement and custody. All contracts are deployed natively on GANChain L1.

This design allows GVEX to achieve high-performance order matching while maintaining complete on-chain verifiability for all settled trades.

#### Order Types & Matching

GVEX supports two order types:

**Limit Orders**: Specify your exact price and size. Orders are added to the orderbook at price levels that are integer multiples of the tick size, and sizes that are integer multiples of the lot size.

**Market Orders**: Execute immediately at the best available price in the orderbook.

**Matching Algorithm**: The orderbook operates on **price-time priority**, identical to centralized exchanges but fully verifiable on-chain. Orders at better prices are matched first. Among orders at the same price, earlier orders have priority.

#### Trading Specifications

**Tick Sizes (Price Increments)**:

* 0.01 for high-precision pairs
* 0.1 for standard pairs
* 1.0 for larger denomination pairs

**Minimum Order Size**: 0.1 for all assets

**Lot Sizes**: Orders must be placed in integer multiples of the lot size, which varies by trading pair.

**Settlement**: Trades settle instantly when orders are matched. The off-chain engine matches orders, and settlement occurs immediately on GANChain L1 through smart contract execution.

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