En the market for cryptocurrencies There will always be two classes of participants. Those who create an offer in the market, and those who keep that offer, be it the offer to buy or sell. Those who create the offers are known as makers (or manufacturers), introducing liquidity to the market. While the takers (or takers) they are all those who take those offers, subtracting liquidity from the market, but adding volume. These terms are not exclusive to the cryptocurrency markets, but are terms commonly used in the world of trading of any kind of thing.
It will be a maker That trader who enters an order of operation with a different value than the market and therefore does not execute it immediately with another existing order, but waits for another to complete said order, providing liquidity by remaining in the market. While the trader who accepts the offer and executes the order related to the operation will be the taker.
How does the Maker and Taker concept work?
In the trading platforms you can see a record of the operations carried out. This allows users to see how active that market is, knowing the volume and being able to detect tendencies or movements. These markets implement the model maker-taker, which was created with the intention of generating and contributing liquidity to them.
A liquid market is a “healthy” and interesting market to be used. For this reason, generally, platforms reward makers with much lower discounts or fees than takers when creating orders or operations in the order book of the exchange or market. These orders are the ones that will later be taken by the takers when they make offers that coincide with the previously created operations.
Differences between a market maker and a market taker
The main difference between a Market makers (market maker) and market taker (market taker) is that the maker or creator is the one who places the limit orders with values or prices different from those established by other makers in the market at a certain time. Therefore, these orders are not executed immediately, since generally the maker speculates, that is, he tries to sell at a higher price, or buy at a lower price than the established one.
So he Market makers It is he who creates the order and specifies the conditions he deems appropriate, such as prices, quantity of the value to sell or buy, the form of payment, among others. And wait for someone to agree to these conditions and execute the operation.
That is the role of market taker or market taker. Any person who has participation in a market and who agrees with an operation and its conditions, may take and settle the operation, removing it from the order book and becoming a taker.
Advantages of the maker-taker model
The maker-taker model allows profit through the different market rates and their fluctuations. So merchants can purchase profits of any size, large or small.
The creation of orders and orders also enables markets to remain active and stable and more attractive to users. In addition, this model also encourages healthy competition between manufacturers or makers in order to provide more liquidity to the market to obtain the best rates.
By keeping markets attractive and active, they are provides a place for investors and traders to invest your assets.
Likewise, many markets that work with levels or scales for both makers and takers. So also allows manufacturers and policyholders to level up and make better profits in proportion to the volume of operations they handle.