Anyone know if crypto exchanges act purely as matchmakers (e.g. if I sell 1 ETH for $750 those dollars come from a person that the exchange has matched me up with) or do some form of market making themselves (hold a buffer stock of each leg which they will directly fill)?
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is a very knowledgeable and often helpful crypto friend... and happens to run an exchange
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Would be super curious to learn about the mechanics.
My (ill-informed) assumption has been that it's largely a matchmaking type action.
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for most exchanges (including FTX) it's all matchmaking when you trade on an orderbook, though query what happens when you use OTC like functions on exchanges