We are a taker and we will pay a taker fee. If we add a sell order at $95 or less, it will match right away the order No. 3, and we are the taker. If we add a buy order at $91 it will not match any order at the moment, and we will be a maker and we will pay a maker fee, whether there is any (it will probably be 0). Apr 13, · Limit buy order (Maker): Imagine you are going to buy 1 BTC from an exchange that uses maker / taker fee structure. The current market price (exchange rate) of Bitcoin is $ The current market price (exchange rate) of Bitcoin is $ Bitcoin, Bitcoin maker vs taker and other cryptocurrencies area unit “stored” using wallets, a notecase signifies that you own the cryptocurrency that was unsent to the wallet. Every wallet has a national line up and a private key. Once you know how Bitcoin maker vs taker works, it is A no-brainer to understand that Bitcoin is here to stay.
Maker vs taker bitcoinWhat are Maker vs. Taker on cryptocurrency exchanges? A quick explanation - Exchange comparer
Thereby taking, hence the name , that liquidity of the exchange an paying a higher fee for it. This is a model much requested from the exchanges userbase since it lowers the fees for active traders.
But this is not only a win for the users but also the exchanges benefit from this. Increased liquidity from the Makers attracts more customers which compensates for the lower fees. Taker — you make an order which is going to be filled immediately. In order to understand the concept of maker and taker you need to first understand the order book which is nothing but the list of all orders for a particular trading pair.
The order book contains both buy orders and sell orders. Now do not confuse it with buyers and sellers. Makers are users who make orders to the order book, increase the size of the order book thus increasing liquidity to the exchange.
Whereas takers are users who take away orders from the order book, decrease the size of the order book thus consuming liquidity. In both the above examples you are the maker. Whether it is buy or sell; you place order with a price different from the current market price hence your order enters the market order book either partially or fully. Now your limit order will not be filled immediately. Orders that sits in the order book will only be executed when someone market taker matches it.
It will sit there until it gets filled, or expires, or you cancel it. The orders from market takers never gets in to the order book instead they agree with the price that is already listed on the order book.
Since they take away offers from the order book they are called takers and hence they pay taker fee. To become a market taker one should be willing to pay the lowest buying price to sell and highest selling price to buy.
But why taker fees are usually higher than the maker fees and how does exchange benefit from this model? To understand this lets consider the following situation:. Now by adding additional BTC to the exchange order book you are providing liquidity to the exchange.
This will help in bringing more volume to the exchange and thus enhancing the overall trading experience for other users. As it is the current selling price and it is already in the order book; your order gets filled immediately. Here in this example you are not adding anything to the order book. Instead removing liquidity plus the opportunity for someone else to buy BTC at that price.
They charge a premium for those who trade quickly. Meanwhile, taker fees are charged when an order is filled right away. Paying maker fees requires you to set limit orders.
Limit orders help make the market and gives others something to take. Once that order sells or buys, that is once another customer places an order that matches yours, you are considered the maker. On partial fills : If an order is partially matched immediately, you pay a taker fee for that portion. The remainder of the order is placed on the order book and, when matched, is considered a maker order.
This is usually the case with a market order.