Limit orders are free to make on Matcha due to the following reasons:
- Limit orders are created and submitted off-chain to 0x Mesh, which broadcasts your order across the entire 0x network to be filled. This does not require any Ethereum gas.
- When your limit order fills, the transaction settles on-chain, and the taker of the order pays for the transaction's Ethereum gas fee + 0x protocol fee.
Unlike other decentralized exchanges that solely operate on-chain, such as Kyber, Oasis, and EtherDelta, 0x does not store orders on the blockchain. Instead, orders are stored off-chain, and only trade settlement occurs on-chain. This unique feature of 0x protocol's flexible architecture is what allows Matcha to offer free limit orders.
Please note that you can set limit orders to expire in 10 minutes, 1 hour (default), 24 hours, 3 days, 7 days. You can cancel a limit order at any time. This will require you to pay a small amount of ETH to cover the cancellation transaction's gas fee. Orders with set expiration times will automatically cancel at no cost.
For more information the difference between limit orders and market orders, check out this help article.
More information on 0x protocol's off-chain relay, on-chain settlement architecture
If the maker of a 0x order already knows their desired counter-party, they can send the order directly to them (i.e., via email, chat, or an over-the-counter platform). If the maker doesn't know a counter-party willing to take the other side of the trade, the order can be submitted via 0x Mesh to a 0x relayer, such as Matcha, to find a counter-party. A "relayer" is any entity that helps traders create, find, and fill 0x orders.
Once someone finds and wishes to fill the 0x order authored by the maker, they can fill it by submitting the order, along with the amount they want to fill it for, to the blockchain. The 0x protocol's settlement logic will verify the maker's digital signature and that all the conditions of the trade are satisfied. Once satisfied, the tokens are atomically swapped between the maker and taker directly into their wallets.