Cryptopedia
Taker
Definition
A Maker refers to someone who “makes” orders by placing orders with specific information (i.e. name of the asset, amount, and price) of the asset to be traded. These orders will be displayed on the order book and wait for others to fill them, providing price references for the entire market.
A Taker refers to someone who “takes” orders by placing orders that match with the orders that already exist on the order book. Takers place orders based on the price of the order from the order book, so that the orders can be instantly filled.
The ideas of “taker” and “maker” are different from “buyers” and “sellers”. Makers are traders who create liquidity on the order book by increasing the number of orders, while takers are traders who take away the orders, decreasing the liquidity.
Both takers and makers need to pay handling fees when trading. Since makers can create liquidity, exchanges charge less fees for makers to encourage traders to “make” more orders.
The History of Maker & Taker
The “Maker-Taker” pricing model originates from the stock market. The model was designed by Joshua Levine In 1997, while Island Electronic Communications Network further developed it and introduced it to the equity market. The model aimed to encourage liquidity providers to trade even when the spread was high. A taker needs to pay a certain amount of handling fees, in which a transaction rebate will be given to the maker. For example, a taker pays the handling fee at the price of $0.003 per share, while the maker can receive $0.002 per share as the transaction rebate, leaving $0.001 per share for the exchange. In the mid-2000s, the “maker-taker” model became the mainstream incentive mechanism, the transaction rebate for 100 shares increased to 20 to 30 cents. Until recently, this model is was also adopted by the Options Markets. Exchanges such as the NYSE, Nasdaq, NYSE Arca, and Bats Global Markets apply the “Maker-Taker” pricing model as well.
The “Maker-Taker” Model & Liquidity
Market liquidity refers to the ability of how an asset can be quickly bought or sold in the market at a price that does not bring huge volatility. The market liquidity can be reflected on three parameters, which are the exchange’s 24-hour trading volume, the order book depth, and the bid-ask spread. Exchanges such as Gate.io encourage traders to become makers by providing transaction rebates. With more maker orders, the order book depth increases, which can attract more takers to the platform. In this way, with higher liquidity, the market becomes healthier and even more liquid.
Introduction to Contract Trading Handling Fees on Gate.io
In Perpetual Contract Trading, the handling fees that Gate.io charges makers and takers are different. A maker can receive a 0.025% rebate, which is covered by the handling fee paid by the taker. The taker has to pay the handling fee at a rate of 0.075%, within which 0.025% will be deducted in BTC to pay for the rebate. The rest of the fee (0.05%) can be paid with Gate POINTs where 1 POINT=1 USD. The price of USD will be calculated based on the real-time index of BTC/USD contract.
A Maker refers to someone who “makes” orders by placing orders with specific information (i.e. name of the asset, amount, and price) of the asset to be traded. These orders will be displayed on the order book and wait for others to fill them, providing price references for the entire market.
A Taker refers to someone who “takes” orders by placing orders that match with the orders that already exist on the order book. Takers place orders based on the price of the order from the order book, so that the orders can be instantly filled.
The ideas of “taker” and “maker” are different from “buyers” and “sellers”. Makers are traders who create liquidity on the order book by increasing the number of orders, while takers are traders who take away the orders, decreasing the liquidity.
Both takers and makers need to pay handling fees when trading. Since makers can create liquidity, exchanges charge less fees for makers to encourage traders to “make” more orders.
The History of Maker & Taker
The “Maker-Taker” pricing model originates from the stock market. The model was designed by Joshua Levine In 1997, while Island Electronic Communications Network further developed it and introduced it to the equity market. The model aimed to encourage liquidity providers to trade even when the spread was high. A taker needs to pay a certain amount of handling fees, in which a transaction rebate will be given to the maker. For example, a taker pays the handling fee at the price of $0.003 per share, while the maker can receive $0.002 per share as the transaction rebate, leaving $0.001 per share for the exchange. In the mid-2000s, the “maker-taker” model became the mainstream incentive mechanism, the transaction rebate for 100 shares increased to 20 to 30 cents. Until recently, this model is was also adopted by the Options Markets. Exchanges such as the NYSE, Nasdaq, NYSE Arca, and Bats Global Markets apply the “Maker-Taker” pricing model as well.
The “Maker-Taker” Model & Liquidity
Market liquidity refers to the ability of how an asset can be quickly bought or sold in the market at a price that does not bring huge volatility. The market liquidity can be reflected on three parameters, which are the exchange’s 24-hour trading volume, the order book depth, and the bid-ask spread. Exchanges such as Gate.io encourage traders to become makers by providing transaction rebates. With more maker orders, the order book depth increases, which can attract more takers to the platform. In this way, with higher liquidity, the market becomes healthier and even more liquid.
Introduction to Contract Trading Handling Fees on Gate.io
In Perpetual Contract Trading, the handling fees that Gate.io charges makers and takers are different. A maker can receive a 0.025% rebate, which is covered by the handling fee paid by the taker. The taker has to pay the handling fee at a rate of 0.075%, within which 0.025% will be deducted in BTC to pay for the rebate. The rest of the fee (0.05%) can be paid with Gate POINTs where 1 POINT=1 USD. The price of USD will be calculated based on the real-time index of BTC/USD contract.
