Are you a Maker or a Taker?

Cryptocurrency exchanges seem to agree that the maker-taker fee model best supports their business model, as this fee schedule is now commonly encountered on many of them. The maker-taker fee model usually charges lower fees to “makers”, or even provides them with a rebate. Any user can be a maker, as this title depends on the placed order. Users that place a non-marketable order are considered makers. Non-marketable orders are limit orders with a price behind the best bid or ask.

For example, if the best ask for one Bitcoin is $250 then a non-marketable order would be a buy order with a limit price of $249. This order will not be executed until the best ask drops to or below $249. By doing this, makers add liquidity to the order book. On the other hand, a marketable order would be a buy order with a limit price of $251 (or simply a market order). This order would be executed immediately. Users that place the latter type of orders are considered “takers”.

Take a second to support Digiconomist on Patreon!

Comments (9)

  1. Tom G October 3, 2020
  2. ghd sports November 23, 2020
  3. janet May 1, 2021
  4. Elsa Ritchie August 1, 2021
  5. Christopher Barbara September 28, 2021
  6. Andre Alexander October 11, 2021
  7. stephen colbert October 11, 2021
  8. Maria October 14, 2021
  9. Rita orlowski May 9, 2022