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What Is a ‘Liquidity Rebate’ and Why Is It Offered?

A payment to market makers for adding liquidity (maker orders), offered to incentivize a narrower bid-ask spread and reduced slippage for all traders.
Greeks.Live23.11.25

What Is a ‘Liquidity Rebate’ and Why Is It Offered?

A liquidity rebate is a payment made by the exchange to a market maker for placing a limit order that adds liquidity to the order book. It is offered to incentivize market makers to narrow the bid-ask spread and increase market depth, which benefits all traders by reducing slippage and improving the overall trading environment.

What Is a “Market Maker Rebate” and How Does It Incentivize Liquidity Provision?
How Does High Trading Volume Typically Affect the Bid-Ask Spread?
How Does Front-Running Risk Affect the Bid-Ask Spread for Crypto Derivatives?
Why Do Market Makers Prefer to Trade at the Bid or Ask Rather than the Mid-Price?

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