What is the maker-taker model in cryptocurrency exchanges?

1 answers

• Braswell ElmoreAug 20, 2024 · a year ago
  The maker-taker model is a common pricing structure used by many cryptocurrency exchanges, including BYDFi. In this model, makers are traders who add liquidity to the market by placing limit orders. They are called makers because they make the market. On the other hand, takers are traders who remove liquidity from the market by placing market orders or limit orders that are immediately matched with existing orders. The maker-taker model benefits both traders and exchanges. Makers are incentivized to provide liquidity by receiving lower fees or even rebates. This helps to ensure that there is always enough liquidity in the market and reduces the impact of large trades. Takers, on the other hand, pay slightly higher fees for the convenience of executing their trades quickly. This model encourages market participation and helps to maintain a fair and efficient trading environment.
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