This beginner’s guide to maker and taker fees on cryptocurrency exchanges will give you an easy to follow explanation of these two trading terms.
Cryptocurrency traders have to pay trading fees for trading on an exchange. Trading fees depend on the types of orders that are placed.
Maker and taker fees meaning explained
Makers ‘create or make a market’ for other traders and bring liquidity to an exchange. A maker order is a limit order which rests in the order book.
Takers remove liquidity by ‘taking’ available orders that are filled immediately.
Maker fees for orders are often lower than other fees.
Cryptocurrency exchanges have an interest in attracting traders to their platforms to generate liquidity. Liquidity on an exchange indicates the extent of market interest based on the number of active traders and trading volume.
Lower maker fees, therefore, incentivise creating a market.
What are market makers?
It is useful to note that ‘makers’ and ‘takers’ as order types are not the same as the term ‘market makers’. Market makers act as traders that promote liquidity in a market to ensure trading efficiency. They hold a large number of assets that can be bought or sold at very short notice thus creating liquidity.
A cryptocurrency exchange, therefore, prioritises such activities to ensure its success.
Maker and taker fees example
Often maker and taker fees can vary based on trade volume and whether you hold native tokens on the exchange platform to secure favourable trading rates.
For ease, let’s look at two popular exchanges at the beginner trader level.
Maker and taker fees on Binance
Binance offers a flat trading fee of 0.10%. According to Binance, it doesn’t care about whether you are a taker or a maker. If you like trading without KYC, then this may be a good option.
Maker and taker fees on CoinMetro
For a centralised exchange, CoinMetro is one that is worth checking out.
Takers on the CoinMetro exchange pay a commission of 0.10%.
Makers pay no commission, the maker fee is 0%.
Additionally, CoinMetro Rebates enables traders to earn XCM (the native token of the exchange) rebates from their trading fees.
Up to 25% of taker’s fees can be paid back in XCM, and makers can earn up to 50% of the taker’s net fees.
Maker and taker fees final thoughts
Hopefully, this article gives you a better understanding of ‘what are maker and taker fees on cryptocurrency exchanges.
If you’d like to test out making and taking orders, why not head on over to CoinMetro and get started today.