diff --git a/contracts/orderbook/src/orderbook.rs b/contracts/orderbook/src/orderbook.rs
index 6c6e9b8..0c79d56 100644
--- a/contracts/orderbook/src/orderbook.rs
+++ b/contracts/orderbook/src/orderbook.rs
@@ -1,6 +1,6 @@
 use crate::error::ContractError;
 use crate::types::Orderbook;
-use crate::state::new_orderbook_id;
+use crate::state::{new_orderbook_id, ORDERBOOKS, MIN_TICK, MAX_TICK};
 use cosmwasm_std::{DepsMut, Env, MessageInfo, Response};
 
 pub fn create_orderbook(
@@ -10,15 +10,51 @@ pub fn create_orderbook(
     quote_denom: String,
     base_denom: String,
 ) -> Result<Response, ContractError> {
-    let book_id = new_orderbook_id(deps.storage).unwrap();
+    // TODO: add necessary validation logic
+    // https://github.com/osmosis-labs/orderbook/issues/26
+
+    let book_id = new_orderbook_id(deps.storage)?;
     let _book = Orderbook {
         book_id,
         quote_denom,
         base_denom,
         current_tick: 0,
-        next_bid_tick: -1,
-        next_ask_tick: 1,
+        next_bid_tick: MIN_TICK,
+        next_ask_tick: MAX_TICK,
     };
 
-    Ok(Response::new().add_attribute("method", "createOrderbook"))
+    ORDERBOOKS.save(deps.storage, &book_id, &_book)?;
+
+    Ok(Response::new().add_attribute("method", "createOrderbook").add_attribute("book_id", &book_id.to_string()))
+}
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+    use cosmwasm_std::testing::{mock_dependencies, mock_env, mock_info};
+
+    #[test]
+    fn test_create_orderbook() {
+        let mut deps = mock_dependencies();
+        let env = mock_env();
+        let info = mock_info("creator", &[]);
+
+        // Attempt to create an orderbook
+        let quote_denom = "quote".to_string();
+        let base_denom = "base".to_string();
+        let create_response = create_orderbook(deps.as_mut(), env, info, quote_denom.clone(), base_denom.clone()).unwrap();
+        
+        // Verify response
+        let expected_book_id: u64 = 0;
+        assert_eq!(create_response.attributes[0], ("method", "createOrderbook"));
+        assert_eq!(create_response.attributes[1], ("book_id", &expected_book_id.to_string()));
+
+        // Verify orderbook is saved correctly
+        let orderbook = ORDERBOOKS.load(deps.as_ref().storage, &expected_book_id).unwrap();
+        assert_eq!(orderbook.quote_denom, quote_denom);
+        assert_eq!(orderbook.base_denom, base_denom);
+        assert_eq!(orderbook.current_tick, 0);
+        assert_eq!(orderbook.next_bid_tick, MIN_TICK);
+        assert_eq!(orderbook.next_ask_tick, MAX_TICK);
+    }
 }
diff --git a/contracts/orderbook/src/state.rs b/contracts/orderbook/src/state.rs
index a02fd56..69b6ddc 100644
--- a/contracts/orderbook/src/state.rs
+++ b/contracts/orderbook/src/state.rs
@@ -3,6 +3,10 @@ use crate::ContractError;
 use cosmwasm_std::{Storage, Uint128};
 use cw_storage_plus::{Item, Map};
 
+pub const MIN_TICK: i64 = -108000000;
+pub const MAX_TICK: i64 = 342000000;
+
+
 pub const ORDERBOOKS: Map<&u64, Orderbook> = Map::new("orderbooks");
 /// Key: (orderbook_id, tick)
 pub const TICK_LIQUIDITY: Map<&(u64, i64), Uint128> = Map::new("tick_liquidity");