A maker on the exchange is – Fundamentals of Trading Dynamics

In cryptocurrency trading, there are often two types of market participants: those who create conditions for trading, and those who utilize these conditions. The difference between them is significant for any investor. Let’s understand what is behind these definitions and why they are important for your strategy.

How Trading on the Platform is Structured

A cryptocurrency exchange is an electronic trading platform where the interests of sellers and buyers intersect. Instead of a physical building, a special digital system is used – the order book (order book). It is a registry of all active buy and sell orders for a specific asset at various price levels.

Imagine a store display window: one side shows the price at which people are willing to sell, the other – the price at which they are willing to buy. A crypto exchange operates on the same principle, but all this happens in real-time and at high speed.

Taker (Taker) – The Initiator of an Immediate Trade

Let’s start with the taker, as their behavior is easier to understand. A taker is a trader who wants to execute a trade right now. Instead of waiting for the perfect price, they look at existing offers in the order book and accept one of them under current conditions.

For example, if you see someone offering to sell Bitcoin at $62,000, and that suits you – you take that offer and buy. Your order is executed instantly because you are “taking” existing liquidity provided by someone else.

The main advantage of this approach is speed. The downside is that you need to pay a higher commission, as the exchange charges takers a larger percentage for using liquidity.

Maker (Maker) – The Market Creator and Liquidity Provider

A maker on the exchange is a participant who acts oppositely. Instead of accepting existing offers, the maker places their own order at a price that has not yet been executed on the market.

Suppose Bitcoin is now worth $62,000, but you think you can buy cheaper. You place an order: “Buy 1 BTC at $60,000.” This order “hangs” in the order book and waits for its turn. When a seller willing to release the coin at that price appears, the trade is executed.

The main difference of a maker is that they add new liquidity to the system, expanding opportunities for other participants. For this, the exchange rewards them with a lower fee or even a negative (pays them a small amount).

Key Differences and Their Consequences

The difference between these two types of participants concerns not only psychology but also economics:

Liquidity: Maker creates, taker uses.

Speed: Maker can wait, taker gets results immediately.

Commission: Maker pays less (sometimes zero or negative), taker pays more.

Why are exchanges set up this way? The answer is simple: they need liquidity. The more people place their orders, the “thicker” the order book, and the smaller the spread (the difference between the best buy and sell prices). This attracts new traders and increases trading volumes.

Practical Examples

Scenario one – you choose the role of a maker: Ethereum is trading at $3000. You believe the growth will slow down, and you place a sell order for 1 ETH at $3050. The order appears in the order book. If a buyer appears – the trade is executed, you get a slightly better price and pay less in fees.

Scenario two – you choose the role of a taker: You see that 1 ETH is being sold at $3000, and that suits you. You instantly click “Buy” and accept this offer. The trade is completed in microseconds, but the fee is higher.

Current Market Data

$GALA GALA 0.01 +10.24%

$NOT NOT 0.00 +12.66%

How to Use This Knowledge

Understanding the mechanics of maker and taker helps optimize your trading. If you are willing to wait and want to save on fees, choose the maker role – place orders at your desired prices. If time is critical and you need results immediately, take the taker role.

For long-term investors planning to hold positions for months or years, the difference in fees can accumulate to a significant amount. For scalpers making dozens of trades per day, this is already a critical parameter.

Experienced traders often combine both strategies: use the maker role to accumulate positions at good prices and the taker role for quick exits when a favorable opportunity arises.