A maker fee is a cost applied to an order that is executed on a trading platform for placing orders which adds liquidity to the exchange. This involves placing an order on the market for another trader to execute. This is known as adding liquidity to the market.
What is the maker/taker fee model?
Cryptocurrency exchanges that uses maker / taker fee model often charges little to no fees for the maker orders (limit orders) and a slight higher fee for taker orders (market orders).
What is the difference between a maker and a taker?
Now do not confuse it with buyers and sellers. ‘Maker’ and ‘Taker’ do not represent buyers and sellers. Maker / taker fees applies to both buy orders as well as sell orders. Makers are users who make orders to the order book, increase the size of the order book thus increasing liquidity to the exchange.
What is a maker order?
In order to be considered a maker order, a sell order placed by the would-be maker has to be higher in price than the highest buy order, or the trader would need to place a buy order that is lower in price than the lowest sell order. Maker fees for orders are often lower than other fees.
