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Maker and Taker: All about fees on cryptocurrency exchanges?

To put it simply, Maker fees are the fees charged to the person placing the order on the book.

The order must be one that is not already able to be fulfilled. Essentially this means that they add more money to the exchange because they are another person trying to buy, but they are creating a new order rather than buying goods that someone else already has for sale.

Overall, this means more money for the exchange because rather than taking an order from the book by buying it at that price, there is a new order on top of what is already on the books.

What are buyer fees?

As you may have guessed from the manufacturer’s fees section, Taker fees are the fees charged to the person taking an order from the book.

This means that they are buying assets at a price already available on the exchange, rather than creating a new order for a price different from current market prices.

Unlike a maker order,
this capture order takes cash off the books without providing anything new, so the net profit for the exchange is lower than when placing a new order for a price not currently available.

Why are they different?

Net profit is the main reason why exchanges often charge less for Maker orders than Taker orders. In fact, some exchanges don’t charge fees for Maker orders as a way to incentivize users to put more money on books.

Think of it this way, when you create a Maker order, you are
depositing X amount of dollars or cryptocurrency on the exchange, increasing the amount of assets they have because there are already other orders (to simplify it think of it as an available order/price that becomes two; you have made a new order). Conversely, when you take an order that is on the books you are decreasing the amount of available assets (an available order/price would become zero; you took an existing order).

So, exchanges want to incentivize you to put more orders on books and therefore charge less for producer orders, and this creates more profits for them because then there are more orders and then earn buying commissions while those producer orders are taken.

Is there a way to reduce these fees?

Yes! Almost all centralized exchanges (such as Binance or Crypto.com Exchange) offer lower fees for both manufacturer and buyer fees for various reasons.

Trading volume is one way to get lower commissions, with fees dropping the more volume increases. Holding the exchange’s proprietary token can also be a way to reduce the fees you pay for creator or buyer orders, again with fees decreasing as the amount of the token you hold goes up.

Some exchanges do not offer commissions for new users for their first month.

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