Questions ยป What is a maker fee?

What is a maker fee?

A limit order is an order to buy or sell a cryptocurrency at a specified price or better, and it is only executed if the market price reaches the specified price.

A maker fee is typically lower than a taker fee, which is charged to traders who place market orders that are immediately filled at the best available price. The reason for this is that limit orders placed by makers help to create liquidity in the market and make it easier for other traders to execute trades.

For example, if a trader places a limit order to sell Bitcoin at $55,000 when the market price is $60,000, and the order is not immediately filled, the trader is a maker and may be charged a lower maker fee when the order is eventually filled.

Maker fees can vary between different trading platforms and may also depend on the trading volume of the user or the trading pair being traded. Some platforms may also offer discounts or rebates for high-volume makers or for users who hold a certain amount of the platform’s native cryptocurrency.

Traders should always consider the maker fee when placing limit orders and may choose to compare fees across different platforms to find the most cost-effective option.