An order book is a type of market that operates based on an order book, a record of all buy and sell orders for a particular asset.
In an order book exchange, users can place limit orders, specifying the price and quantity they are willing to buy or sell an asset for. When a matching buy and sell order is found, a trade is executed, and the exchange takes a small fee for facilitating the transaction. Order book exchanges provide more precise price discovery and allow users to take advantage of market inefficiencies, but can suffer from liquidity issues and are more susceptible to front-running and other forms of market manipulation.
Overall, order book exchanges offer a more traditional trading experience compared to Automated Market Maker (AMM) exchanges, but with the added benefits of being decentralised and secure.