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Quantitative Finance · Glossary

What is Private order flow, order-flow auction?

Also known as: private order flow · order-flow auction

Definition 22.8 Markets III: Commodities, Energy and Crypto · Chapter 22 — Maximal Extractable Value

Private order flow is transactions sent directly to builders or through private channels rather than to the public mempool, where searchers cannot see them. An order-flow auction is a mechanism that lets searchers bid for the right to back-run a user’s transaction, returning part of the proceeds to the user, without revealing the transaction in full.

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