What Is a "Maker-Taker" Fee Structure Common on Centralized Exchanges? ⎊ Path

What Is a “Maker-Taker” Fee Structure Common on Centralized Exchanges?

A maker-taker fee structure is a model where traders who provide liquidity (makers, by placing limit orders) are charged a lower fee or even receive a rebate. Traders who remove liquidity (takers, by placing market orders) are charged a higher fee.

This incentivizes market participants to provide depth to the order book, improving liquidity and reducing the bid-ask spread for all traders.

Describe the Typical Participants on an Institutional RFQ Platform

What Is the Difference between a Maker and a Taker Fee Structure?

What Is ‘Liquidity Rebate’ and How Does It Incentivize HFT Market-Making?

How Does the Fee Structure Differ between a Dark Pool and a Public Exchange?

Why Do Market Makers Primarily Use Limit Orders Rather than Market Orders?

How Does the ‘Fee Structure’ Differ between a Centralized Exchange (CEX) and a Decentralized Exchange (DEX) AMM?

What Role Do Maker-Taker Fees Play in the Profitability of Arbitrage Strategies?

What Incentives Do Exchanges Offer to Market Makers to Ensure Narrow Spreads?

Glossar

Fee Structure

Allocation ⎊ Fee structures within cryptocurrency, options trading, and financial derivatives represent the systematic distribution of costs associated with executing and maintaining positions, impacting net profitability and strategic decision-making.

Market Orders

Execution ⎊ Market orders, within cryptocurrency, options, and derivatives, represent instructions to buy or sell an asset at the best available price immediately.