In order book exchanges, bids and asks are usually only matched based on their price. A trade happens when the seller and buyer agree on a price, or better to say only when the ask and bid prices match. Bids and asks with the same price are often aggregated on regular exchanges. This is possible because the commodity that is traded is fungible, meaning that one entity of the asset is completely interchangeable. As a result, on regular commodity exchanges, buyers do not really care about which exact product they get, as long as the price is right. In this regard, the Origin Exchange is very different from regular commodity exchanges. The EACs that are traded all have characteristics that make them unique. As discussed in the Orders section, asks hold information about the underlying EACs and bids hold the buyer’s requirements. To ensure that the requirements of the buyers are met and that the unique characteristics of the EACs are taken into account, additional criteria have to be incorporated into the matching process. This increases the complexity of the matching process significantly in comparison to a simple price matching.
This more complex matching process provides a lot of value to the market participants. Buyers can specify exactly what kind of EAC they want to buy and easily find it on the market. They do not have to settle for having very limited information about the product that they are buying or the cumbersome manual process of going through every single sell offer to find out the details. Similarly, sellers get the opportunity to have all the unique characteristics of their EACs be counted in during the purchase process. By incorporating additional criteria into the matching, buyers can easily find EACs matching their very detailed needs and sellers can expect to get paid a premium for EACs with highly valued characteristics. The aim is to transform EAC trading from an intransparent bulk buying of EACs with very limited impact-related information into a transparent process that delivers more value to all market participants by actually meeting their specific proof of impact needs.