Cryptopedia
Maker and Taker
1. Basic Meaning
2. Origin & History (concise)
3. The Connection with Liquidity
4. Application in gate.io Trading
2. Origin & History (concise)
3. The Connection with Liquidity
4. Application in gate.io Trading
Reference:
https://www.binance.vision/zh/economics/what-are-makers-and-takers
https://support.kraken.com/hc/en-us/articles/360000526126-What- are-Maker-and-Taker-f ees-
http://www.marketswiki.com/wiki/Maker-taker
https://www.investopedia.com/articles/active-trading/042414/what-makertaker-fees-mean-you.asp
https://smallbusiness.chron.com/liquidity-provider-67347.html
https://cryptocurrencyfacts.com/maker-vs-taker-cryptocurrency/
Basic Meaning
Maker is a trader who submits the name, quantity and price of their underlying assets for potential trading. If there is no trader in the market at that time, then the order will remain on the exchange's marketplace, providing quotes for the entire market.
Taker refers to a trader who completes an order with the maker. That is, according to the price of the current order on the exchange's marketplace, a number of orders will be issued by the makers to be traded with those issued by the takers. It should be noted that the "maker" and "taker" should not be confused with "buyers" and "sellers". A maker is a user who increases liquidity by adding orders to the order book; a taker is a user who reduces liquidity by taking orders from the order book.
Usually, takers and makers pay a certain amount of trading fees. However, since makers are able to provide liquidity for the market, many exchanges charge them a lower fee than takers. In this way, more investors will be encouraged to add orders to the Order Book.
Origins & History
"Maker & taker" gets its roots from the pricing model used by the stock market. In 1997, the model was designed by Joshua Levine and developed by the Island Electronic Communications Network (IECN) as an incentive for liquidity providers to trade in markets with poor spreads. The taker pays a fee when he trades, but the fee is rebated to the maker. For example, the maker receives a rebate of $0.002 per share on his order, while the taker pays a fee of $0.003 per share on his order. The exchange gets a difference of $0.001 per share. By the mid-2000s, this model had become the primary means of incentivizing the market, with rebates ranging from 20 to 30 cents per 100 shares traded. Due to controversy, the "maker & taker" model has only recently been embraced by the Options Markets. Common exchanges that have adopted such a model include the New York Stock Exchange, NASDAQ, NYSE Euronext's Arca on the trading of futures options, BATS Global Markets, and others.
"Maker & Taker” and Liquidity
Liquidity is often referred to as Market Liquidity. It refers to the speed at which a trade can be concluded or the ability of market participants to trade at market prices without causing significant price fluctuations. Three indicators of good liquidity are the exchange’s trading volume over 24 hours, depth of the order book, and the spreads of a trade.
A maker is considered a "liquidity provider" because he provides a certain number of orders in the market (a bid price or ask price for a particular asset). The increase in order volume accelerates the trading between the maker and the taker. Some exchanges, such as Gate.io, encourage makers by offering a rebate and a chance to earn commission. The more makers, the more depth there will be. In markets where there is depth, takers will be more willing to trade. The idea is that the whole market will be in a virtuous circle with increasing liquidity.
Introduction to Gate.io Contract Rates
The fees for Gate.io perpetual contract products are different for makers and takers. Makers can get a 0.025% rebate. Takers can get a 0.075% rebate, of which 0.025% is deducted from the users account to pay for the trading fees and 0.05% is deducted by Gate.io Points. When the Gate.io Points are deducted,the equation is: 1 POINT = 1 USD. The USD price is converted according to the BTC/USD contract real-time index price.
Basic Meaning
Maker is a trader who submits the name, quantity and price of their underlying assets for potential trading. If there is no trader in the market at that time, then the order will remain on the exchange's marketplace, providing quotes for the entire market.
Taker refers to a trader who completes an order with the maker. That is, according to the price of the current order on the exchange's marketplace, a number of orders will be issued by the makers to be traded with those issued by the takers. It should be noted that the "maker" and "taker" should not be confused with "buyers" and "sellers". A maker is a user who increases liquidity by adding orders to the order book; a taker is a user who reduces liquidity by taking orders from the order book.
Usually, takers and makers pay a certain amount of trading fees. However, since makers are able to provide liquidity for the market, many exchanges charge them a lower fee than takers. In this way, more investors will be encouraged to add orders to the Order Book.
Origins & History
"Maker & taker" gets its roots from the pricing model used by the stock market. In 1997, the model was designed by Joshua Levine and developed by the Island Electronic Communications Network (IECN) as an incentive for liquidity providers to trade in markets with poor spreads. The taker pays a fee when he trades, but the fee is rebated to the maker. For example, the maker receives a rebate of $0.002 per share on his order, while the taker pays a fee of $0.003 per share on his order. The exchange gets a difference of $0.001 per share. By the mid-2000s, this model had become the primary means of incentivizing the market, with rebates ranging from 20 to 30 cents per 100 shares traded. Due to controversy, the "maker & taker" model has only recently been embraced by the Options Markets. Common exchanges that have adopted such a model include the New York Stock Exchange, NASDAQ, NYSE Euronext's Arca on the trading of futures options, BATS Global Markets, and others.
"Maker & Taker” and Liquidity
Liquidity is often referred to as Market Liquidity. It refers to the speed at which a trade can be concluded or the ability of market participants to trade at market prices without causing significant price fluctuations. Three indicators of good liquidity are the exchange’s trading volume over 24 hours, depth of the order book, and the spreads of a trade.
A maker is considered a "liquidity provider" because he provides a certain number of orders in the market (a bid price or ask price for a particular asset). The increase in order volume accelerates the trading between the maker and the taker. Some exchanges, such as Gate.io, encourage makers by offering a rebate and a chance to earn commission. The more makers, the more depth there will be. In markets where there is depth, takers will be more willing to trade. The idea is that the whole market will be in a virtuous circle with increasing liquidity.
Introduction to Gate.io Contract Rates
The fees for Gate.io perpetual contract products are different for makers and takers. Makers can get a 0.025% rebate. Takers can get a 0.075% rebate, of which 0.025% is deducted from the users account to pay for the trading fees and 0.05% is deducted by Gate.io Points. When the Gate.io Points are deducted,the equation is: 1 POINT = 1 USD. The USD price is converted according to the BTC/USD contract real-time index price.
