What are Market Makers and Marker Taker?

There are two market participants: market makers and market takers. Consider the cryptocurrency market as a supermarket. The market makers are just like the store suppliers adding items to the supermarket, and the market takers are buyers of these items. Therefore, if you have ever traded, then you're a market participant that falls into either of those two categories. 

Liquidity

The term liquidity refers to how easy it is to buy or sell something, in other words how fast it can be traded for cash. For example, it is easier to sell a carat of diamond compared to an antique vase. As a result, market makers are providing liquidity to the market because they create orders that can be filled by sellers that want to sell. Market makers are very important for an exchange as it enables the market to function smoothly and Hotbit offers a special maker fee for all of our market makers.

 

What is a Market Maker?

A market maker is any user who offers to buy any type(s) of token(s) at any price lower than the current price in a limit order or sells any type(s) of token(s) at any price higher than the current price in a limit order, which thus increases the market depth of either buy or sell orders. As said previously, they add depth to the market by creating liquidity. 

What is a Market Taker?

A market taker is any user who offers to take any type of buy or sell orders placed by any maker, which thus decreases the market depth of the order book. In other words, they remove the liquidity added by the market makers by placing market orders. This is the reason market taker usually pay a higher fee than market makers which adds depth to the market. 

Maker Taker Fees on Hotbit