> For the complete documentation index, see [llms.txt](https://docs.world.inc/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.world.inc/essentials/order-books-+-rfq.md). # Order books + RFQ ## All CLOBs - No Pools, No AMMs All markets on WCM are order books (CLOBs), including the lending market. There are no pools of any kind. This distinction is important because cross-asset lending pools are subject to adverse selection and subsequently death spirals. George Akerlof won the 2001 Nobel prize for his demonstration of this effect and we don't intend to contradict the man! Akerlof, G. A. (1970). *The Market for "Lemons": Quality Uncertainty and the Market Mechanism*. **Quarterly Journal of Economics, 84**(3), 488–500. . An even more practically relevant paper: **Rothschild, M., & Stiglitz, J. E. (1976).** *Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information*. **Quarterly Journal of Economics, 90**(4), 629–649. [https://doi.org/10.2307/1885326](https://www.uh.edu/~bsorense/Rothschild\&Stiglitz.pdf) Segregating risk to bilateral contracts protects all users and enables safe portfolio margin. ## RFQ World's RFQ system is integrated into its order book. Clients can request RFQ access in which they will be streamed tight quotes from dealers and market makers. When a trade is agreed between the parties, it settles on World's order book like any other trade on World. The integration with the order book ensures the taker takes the best price available to them, between the RFQ system and order book. It is additionally possible to condition on post-execution logic with the RFQ system. ## Looping Looping is common in DeFi. It happens due to TVL limits on over-collateralized lending venues. Users loop to increase exposure, i.e. increase leverage, to an asset. WCM is under-collateralized, which means there is no need to loop - you can achieve the same result with 1 click and lower liquidation risk. ## Fixed term, fixed rate lending A common problem with pool-based Morpho and Aave-style markets is that the borrowing rate is both overly sensitive and easy to manipulate. All loans on WCM are 10-day terms with a fixed rate over that duration. If as a borrower, you match with a lender at a 6% rate, then you are guaranteed that rate over the 10-day duration of the loan. If your lender is liquidated, the liquidation engine will source another lender from the order book as part of the liquidation process, and the liquidated lender will pay the difference in rates. A borrower can only borrow if they can afford the full 10-day interest payment on loan, which is taken out of their available margin. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.world.inc/essentials/order-books-+-rfq.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.