Understanding the maker of cryptocurrency is extremely important as that is a fee that involves the transactions that you make in the crypto orderbooks. In fact, crypto trading is not as simple as just going in for an exchange wallet, depositing some fiat and starting to make transactions. There are a lot of considerations that you have to take into account to trade successfully, and maker is one of these, which checks whether a seller is adding liquidity to the market, or is taking liquidity away from the order books. Conventional manufacturers are referred to the trader or the transaction that is geared towards adding this liquidity to the crypto orderbooks. In turn, the trader is given some rebate to incentive him into doing this again, and this rebate is what is known as a maker’s maker.
Understanding the Maker Maker in Cryptocurrency
Market making is the process of placing limited orders on the order books or crypto ledgers. This is what the first maker in the “maker maker” refers to in cryptocurrency trading. This is called a maker’s maker, because this adds liquidity to the overall cryto orderbook. If such orders do not exist, the buy and sell orders would tend to keep on moving so as to match each other, and this would in a way remove the liquidity from the market. The person doing this is therefore called the market maker.
The second is the rebate that such a maker is given by the cryptocurrency exchange for doing so as mentioned above. More precisely speaking, this is the concessional fee that the market maker is offered by the exchange to always prefer carrying out such transactions. So even if an order goes partially on an order book, it is referred to as maker. This is because it will not be fulfilled at once, but will wait for an opportunity to match, and this will mean that it is adding liquidity in the meantime to the crypto ledger. Given the very large volumes involved in crypto trading, and the bulky fees that accumulate over time in the course of such high volume transactions, a maker’s maker is always a great attraction to traders to add liquidity to the market, which in turn is great for the exchange dynamics.
Consistency of Maker Maker Across Exchanges
Most of the well known exchanges today operate on the maker taker model, the taker is classified as the person who takes away this liquidity and is charged an extra taker fee for some exchange. The numbers that are charged or rebated as maker takers vary across almost all exchanges, but in general most of them operate on this model. In fact, for larger traders, the maker fee is an important criterion while deciding as to place what trade on what exchange.
How to Gain the Best Out of Maker Maker
A recent trend, but one that is gaining ground very quickly is that people are hiring either private consultants or online consultants like executium.com that help provide personalized services in any aspect of cryptocurrency. These are especially useful in places when a comparison of multiple exchanges is required before placing each trade, like the case of understanding the maker maker in crypto trading. It is never bad to invest a few dollars in a service that can reap your manifold benefits.