Batch Auction

Batch auctions are a trading mechanism in which individual orders are grouped together and executed simultaneously. All orders within a batch are settled at the same uniform clearing price. Batch auctions benefit from aggregated liquidity and are a popular mechanism for ensuring fair price discovery in both the decentralized and traditional finance worlds.

In the context of blockchains, batch auctions play an important role for initial token offerings, liquidations or buybacks of illiquid assets and as a means to prevent MEV. Batch auctions are fundamentally less vulnerable to MEV since the ordering of trades within a batch doesn’t have an effect on the price.