Limit Order
Limit order is a trading instruction that tells the system to buy or sell tokens only when a specific price condition is met. Unlike a market order, which executes immediately at the best available price in the market, a limit order will wait—sometimes seconds, sometimes days—until the market price reaches the trader’s target. This makes it a powerful tool for traders who prioritize precision and price control over immediate execution.
Core Idea
The essence of a limit order is simple: "I want to trade, but only if I can get this price or better." If you’re selling, that means setting a minimum acceptable price. If you’re buying, that means setting a maximum price you’re willing to pay.
How It Works
When placing a limit order, a trader defines:
Trading pair — the input token they’re giving and the output token they want.
Price condition — the exact rate at which they want the trade to execute.
Amount — how much of the token they want to trade.
Duration — how long the order remains valid before expiring.
Slippage tolerance (optional) — how much deviation from the target price they’re willing to accept.
Additional constraints (optional) — for example, execution only within certain block times or liquidity conditions.
Once submitted, the limit order sits in the system awaiting favorable market conditions. If the market moves to meet the target price within the order’s validity period, the order becomes executable. If not, it simply expires without any cost to the trader.
Strategic Use Cases
Entry at Lower Prices: A trader wants to buy a token only if it dips to a cheaper level.
Profit-Taking: An investor wants to sell a token if it rises to a certain profit target.
Volatility Capture: In a fast-moving market, a trader sets multiple staggered limit orders to take advantage of price swings.
Automated Execution: Traders can leave orders active while away from the market, ensuring they don’t miss opportunities.
Benefits
Full Price Control: Avoids the uncertainty of fluctuating market order fills.
Risk Management: Helps protect against buying too high or selling too low.
Time Efficiency: No need to watch charts constantly—orders execute automatically when conditions are met.
Potentially Better Outcomes: In volatile conditions, a limit order might achieve a price significantly better than a market order placed at the same moment.
Trade-offs
While limit orders offer more control, they are not guaranteed to execute. If the target price is never reached within the specified timeframe, the opportunity is missed. In highly volatile or low-liquidity markets, partial fills or delayed execution are also possible.
FanxX — Powering Limit Orders with Dutch Auction Execution
FanxX is FanX’s intent-based, filler-driven execution layer designed to handle advanced order types—such as limit orders—efficiently and securely.
How FanxX Works for Limit Orders
Order Creation The trader defines a limit order, including:
Input and output tokens
Minimum acceptable output (or maximum input)
Order validity period
Price decay parameters for the auction
Intent Signing with Permit2 Instead of submitting the order directly on-chain, the user signs an intent that authorizes the token transfer only upon successful execution. Permit2 handles token approvals without requiring native gas fees from the user.
Public Broadcast to Fillers The signed intent is shared publicly. Anyone—market makers, MEV searchers, or bots—can act as a filler to execute the trade.
Dutch Auction Mechanism The auction starts with favorable pricing for fillers, gradually decaying toward the trader’s minimum acceptable output. This incentivizes quick execution while ensuring the trader gets the best available rate.
On-Chain Execution A filler submits the intent through FanX’s Reactor and Executor contracts, which verify all conditions before completing the swap. The filler pays the gas cost, keeping the experience gas-free for the trader.
Settlement & Order Closure The trader receives the output tokens. If the price never reaches the target before expiry, the order simply expires without cost.
Advantages of Using FanxX for Limit Orders
Gas-Free for Traders: Fillers cover gas costs, whether or not execution succeeds.
Competitive Pricing: Dutch auction competition between fillers drives optimal rates.
MEV Protection: The execution design minimizes front-running and sandwich attacks.
Access to Aggregated Liquidity: Fillers can route orders through multiple on-chain and off-chain sources to maximize fill efficiency.
No Manual Management: Unlike liquidity range orders, there’s no need to adjust or withdraw positions manually.
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