Order book
List of all current buy and sell orders on the exchange.
Classic CEX exchanges (Binance, Kraken) and modern DEXes (dYdX, Hyperliquid) use an order book: buyers post bids on one side, sellers post asks on the other. The best bid and ask meet in the middle. The gap between them is the spread. Tight spread means a liquid market. Wide spread means low liquidity and a higher trading cost. AMMs (Uniswap) work differently, using a liquidity pool instead of an order book.
In plain words
A classic exchange (Binance, Kraken) shows all current orders: buyers on one side, sellers on the other. The highest bid and lowest ask meet in the middle. The gap is the spread. Tight spread (a few cents) means a liquid market and low trading cost. Wide spread means low liquidity and expensive trading. AMM DEXes (Uniswap) don't use an order book, they use a liquidity pool and a formula.
Example
BTC/USDT on Binance: spread typically 0.01% (1 cent per $100), $50B+ daily volume.
Also known as: spread, bid, ask