(Requires the TickSize amendment.)
When an Offer is placed into an order book, its exchange rate is truncated based on the
TickSize values set by the issuers of the currencies involved in the Offer. When a trader offers to exchange XRP and an issued currency, the
TickSize from the issuer of the currency applies. When a trader offers to exchange two issued currencies, the offer uses the smaller
TickSize value (that is, the one with fewer significant digits). If neither currency has a
TickSize set, the default behavior applies.
TickSize value truncates the number of significant digits in the exchange rate of an offer when it gets placed in an order book. Issuers can set
TickSize to an integer from
15 using an AccountSet transaction. The exchange rate is represented as significant digits and an exponent; the
TickSize does not affect the exponent. This allows the XRP Ledger to represent exchange rates between assets that vary greatly in value (for example, a hyperinflated currency compared to a rare commodity). The lower the
TickSize an issuer sets, the larger the increment traders must offer to be considered a higher exchange rate than the existing Offers.
TickSize does not affect the part of an Offer that can be executed immediately. (For that reason, OfferCreate transactions with
tfImmediateOrCancel are unaffected by
TickSize values.) If the Offer cannot be fully executed, the transaction processing engine calculates the exchange rate and truncates it based on
TickSize. Then, the engine rounds the remaining amount of the Offer from the "less important" side to match the truncated exchange rate. For a default OfferCreate transaction (a "buy" Offer), the
TakerPays amount (the amount being bought) gets rounded. If the
tfSell flag is enabled (a "sell" Offer) the
TakerGets amount (the amount being sold) gets rounded.
When an issuer enables, disables, or changes the
TickSize, Offers that were placed under the previous setting are unaffected.