Market maker
A market maker quotes buy and sell prices to provide liquidity, earning the spread and/or incentives.
Market makers post resting orders on both sides of the book, tightening spreads and improving execution for other participants. They manage inventory and hedging to control risk.
"A maker quotes BCH/USDT with narrow spreads and updates quotes as volatility changes."
"In AMMs, LPs act as passive market makers by supplying liquidity to pools."
Exchanges often offer maker rebates and lower fees to encourage liquidity provision, while takers pay higher fees for immediate execution.
"Posting a limit order that adds liquidity earns a maker rebate on some venues."
"Programs target pairs with wider spreads to attract makers and improve market quality."
Related Terms
Liquidity
→The ease with which a crypto asset can be bought or sold without affecting the market price.
Bid-Ask Spread
→The difference between the highest bid and lowest ask price for an asset.
Limit Order
→A trading instruction to buy or sell an asset at a specified price or better.
All terms and definitions may update as the Cryptionary improves.
