Who are Makers and Takers?

Makers and Takers: Core Market Participants

The cryptocurrency trading market relies on two primary participant types: makers and takers. Understanding how they differ is essential for effective trading.

Makers are traders who create orders and post them to the order book, waiting for other market participants to execute them. They “make” the market by quoting buy and sell prices. For example, if a trader places a limit order to buy BTC at 40,000 USDT and the order doesn’t fill right away but stays in the order book, that trader acts as a maker.

Takers are traders who fill existing orders from the order book, executing trades instantly at current market prices. They “take” liquidity from the market. For instance, if a trader uses a market order to buy BTC immediately at the best available price, that trader is a taker.

The key distinction is that makers supply liquidity to the market, while takers consume it. On exchanges using a matching engine, makers play a vital role by deepening the order book, which makes the platform more attractive for trading. Many exchanges reward makers with lower fees or even incentives for providing liquidity.

Order Book Matching Mechanism

The order matching mechanism is an automated system that pairs buy and sell orders based on price and the time they’re placed. This mechanism is the backbone of most centralized cryptocurrency exchanges.

Makers post orders at various price levels, and these are recorded in the order book. The order book is a digital ledger of all active buy and sell orders for a particular asset, organized by price. Takers match their orders to the corresponding levels in the order book to complete trades.

For example, if you want to buy tokens at 3 USDT, there must be makers selling those tokens at 3 USDT or less. The system will automatically find the best match and execute the trade. Every transaction requires both buyers and sellers, and the matching engine ensures smooth interaction between them.

Most centralized exchanges use this order book matching model. Key advantages include simplicity, flexibility, and speed. The system operates 24/7, processes thousands of trades per second, and delivers fair pricing driven by supply and demand.

Market Liquidity and Its Significance

Market liquidity is the ability to buy or sell an asset quickly at a fair market price without causing significant price movement. High liquidity signals a healthy, efficient market.

When both sides of a transaction can exchange assets quickly at the expected price, the market is considered highly liquid. Popular tokens like BTC and ETH usually offer strong liquidity, thanks to large numbers of active traders and high trading volumes. This means you can buy or sell these assets almost instantly at the market price.

By contrast, less-traded tokens can be hard to buy or sell efficiently due to low liquidity. In these cases, the order book may have limited offers, and the gap between bid and ask prices—the spread—can be wide.

Selling low-liquidity tokens at your desired price can be difficult. For example, if you hold a little-known token and want to sell it, you might need to drop your price significantly to attract a buyer. That could lead to considerable losses, especially if you need to sell urgently. When selecting assets to trade, always consider liquidity and prioritize tokens with solid trading volumes.

How to Tell If You’re a Maker or a Taker

Your role in a trade depends on how your order is executed and whether it adds to or removes market liquidity.

You’re a maker if you create an order that adds liquidity and improves the market’s execution price. When you place a limit order that doesn’t fill immediately at the current market price, your order enters the order book and awaits execution. At that point, you’re a maker, providing liquidity to other traders.

You’re a taker if you execute an order immediately, removing existing liquidity. If you use a market order or a limit order that fills right away at the current order book price, you’re acting as a taker.

As a rule of thumb: if your order doesn’t appear in the order book and fills instantly, you’re a taker. All market orders are classified as taker orders because they execute immediately at the best price available.

If your order isn’t filled instantly and is posted to the order book, it increases the number of active orders and boosts market liquidity. In this case, your action is considered a maker order. Keep in mind, a single trader can be a maker in some trades and a taker in others, depending on the strategy used.

How to View Order Roles on the Trading Platform

Most crypto exchanges provide detailed trade records, including your role in every transaction. Here’s how to check your order role on both the web and mobile platforms.

Viewing on the Website

Log in to the official trading platform website. At the top of the page, find the order management section and select the order type—spot or futures.

For spot orders: go to your trading history, which lists all completed trades. You’ll find a column indicating your role—maker or taker—in each trade. This is usually displayed alongside the fee charged, which varies by role.

For futures orders: likewise, go to the order history section and select “Trade History.” Your role is shown for every transaction, allowing you to analyze your trading strategy and optimize your commission expenses.

Viewing on the Mobile App

Log in to the trading platform’s mobile app. On the main screen, tap the user profile icon, usually in the top corner.

For spot orders: go to “Transactions,” select “Spot Orders,” then open the “Trade History” tab. You’ll see all your trades, each with your role clearly indicated.

For futures orders: in the “Transactions” section, select “Futures Orders,” then go to “Order History.” Use the filters to show only executed orders. Each trade’s details will specify whether you acted as a maker or a taker.

Knowing your role in each trade helps you refine your trading strategy and minimize fees, as many platforms offer discounted maker fees.

FAQ

What’s the main difference between Makers and Takers?

Makers create orders and add liquidity to the market while waiting for execution. Takers fill existing maker orders instantly. In short, makers provide liquidity and takers consume it.

How are Maker and Taker fees structured on exchanges?

Makers enjoy lower fees because their orders add liquidity. Takers pay higher fees to execute existing orders. This encourages market creation and narrows the spread between bid and ask prices.

What strategies do Makers use to profit from spreads?

Makers typically use two approaches: earning exchange rewards for liquidity provision and capturing profits from the spread between buy and sell prices. They place limit orders above and below the current price, collecting commissions for each filled order and earning from the spread when trading volume is high.

Why do Takers pay higher fees than Makers?

Takers pay more because they reduce market liquidity by filling existing orders. Makers increase liquidity by placing new orders, so they receive lower rates.

How can you become a Maker and qualify for lower fees on a crypto exchange?

To become a Maker and access lower fees, place limit orders to add liquidity. Boost your trading activity and volume to increase your VIP level and unlock additional fee discounts.