Maker Fee

A maker fee in cryptocurrency trading is a fee that cryptocurrency exchanges charge to users who add liquidity to the order book by placing limit or stop-limit orders that aren’t instantly matched with an existing order on the exchange. These users are referred to as ‘makers’ because their orders help ‘make’ the market by providing liquidity for other traders.

Typically, a maker is a trader who places a limit or stop-limit order at a price different from the current market price. For example, placing a buy limit order at a price lower than the current market price or a sell limit order at a higher price.

Many exchanges incentivise liquidity provision by charging lower fees for makers compared to ‘takers’ (who consume liquidity by matching against an existing order on the order book). This provision rewards traders for adding liquidity, helping to promote a liquid and efficient market.

Note that the actual percentage of the maker fee varies across exchanges.