> ## Documentation Index
> Fetch the complete documentation index at: https://ilovecoffee.compute.exchange/docs/llms.txt
> Use this file to discover all available pages before exploring further.

# How Auctions Work

Compute Exchange operates through an auction-based marketplace where participants can buy and sell compute resources. Buyers specify their requirements, and sellers list their available compute capacity.

Auctions follow a structured process, divided into three distinct phases:

```mermaid theme={null}
timeline
    title Auction phases
    Auction begins : Orders can be placed
    No cancel period : Orders become binding
    End of auction : Matching orders are executed
```

## Auction Phases

<Steps>
  <Step title="Auction Begins">
    At the start of the auction, buyers and sellers submit their orders:

    * Sellers list compute specifications and set their asking price.
    * Buyers define their compute needs using filters and place bids.
    * An indicative market price is published based on initial orders.
    * Buyers and sellers can modify or cancel their orders.

    <Info>
      Orders are **not yet binding** in this phase.
    </Info>
  </Step>

  <Step title="No-Cancel Period">
    Once the auction progresses into the no-cancel period:

    * All active orders become binding and cannot be canceled.
    * Buyers can only increase their bid price (not lower it).
    * Another indicative market price is published.
    * Participants can see if their orders are likely to be filled.
  </Step>

  <Step title="Auction Ends">
    At the conclusion of the auction:

    * Matching orders are executed at the agreed-upon price and quantity.
    * Unmatched orders are automatically canceled.
    * No further changes can be made.
  </Step>
</Steps>