How Does a Tiered Fee Structure for Market Makers Promote Higher Trading Volume? ▴ Learn

How Does a Tiered Fee Structure for Market Makers Promote Higher Trading Volume?

A tiered fee structure links the market maker's fee or rebate level to their monthly trading volume. As their volume increases, they move into a more favorable tier, receiving lower taker fees or higher maker rebates.

This incentivizes market makers to increase their trading activity and provide more liquidity to achieve the best possible fee structure, which in turn boosts the exchange's overall volume.

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