What are maker fees and taker fees for cryptocurrency traders?
The idea behind these maker-taker fees is to stimulate trading activity within an exchange by extending to firms the incentive to post orders which in theory is facilitating trade. Cryptocurrency trading is not free. So to trade effectively, traders have to know about the common types of trading fees cryptocurrency exchanges charge for orders. When calculating cryptocurrency fees especially on Bitcoin Code, orders are classified into two categories namely those charged with maker fees and those charged with taker fees. Maker Fees  An order doesnt add liquidity to an order book until it is picked by another trader which helps to make the market. So when a limit order for trade on an exchange is usually not immediately filled. It is only triggered once the price of an asset such as bitcoin rises or falls below a certain limit. Therefore, a trader who places an order like this makes liquidity in a market for other traders. By placing this order, the trader adds liquidity to the order book and regarding this order, it is known as the maker for providing traders with new options. For an order to be considered a maker, a sell order placed by the would-be maker has to be higher in price than the highest buy order or the trader would need to place a buy order lower in piece than the lowest selling order. Makers fees for orders are often lower than other fees. Exchanges have an interest in attracting traders to their platforms to generate liquidity. Liquidity on an exchange indicates the extent of maker interest based on the number of active traders and overall trading volume. Lower maker fees incentivise creating a market. Takers Fees  Takers fees is the term used to classify traders who are looking for trading options they can immediately fill. Such options could be a market order as market orders are based on immediacy. Takers place buy orders or sell orders for filling orders available in an order book and pay taker fees upon execution. A market order will always fill immediately. If an order is so large that there is not enough liquidity in the order book at this time, it will be rejected since a market order can only be filled fully or rejected. So if there is not enough liquidity in the order book to fill 1 BTC, then the market order will be rejected due to insufficient liquidity. Remember that market orders are available regardless of the current price of an asset. Therefore, our taker fills the order almost instantly to buy the 1 BTC without delay and pays a slightly higher taker fee for the convenience and fast execution provided by the exchange and the makers. In most order books, orders are limit orders and stop-limit orders, which remain in the order book for a long time. There is always a maker and a taker to a filled order. Placing a limit order with the same price as what is currently in the order book will be filled as a taker. Conclusion  It is very important to cryptocurrency that traders create liquidity and trading volume on its platform. We should endeavour to exchange incentivise trades accordingly.