Maker vs taker: what it means and how to save on exchange fees

Maker vs taker: what it means and how to save on exchange fees

Exchange fees seem trivial until you start counting them on every trade. In arbitrage, where the spread is measured in fractions of a percent, fees often decide whether a trade is profitable at all.

The fee you pay depends on your role in the trade - maker or taker. Let's look at how they differ and how to pay less.

What makers and takers are on an exchange

A maker places a limit order that does not fill immediately and rests in the order book. Makers add liquidity: other traders can trade against their orders.

A taker takes an order already resting in the book. Usually this is a market order, or a limit order whose price immediately crosses the best opposite quote.

Every trade always has two sides. The party whose order was resting in the book pays the maker fee, and the party who took it pays the taker fee.

Your role is determined not by whether you buy or sell, but by how your order was filled. A seller can also be a maker if their order waited in the book for a buyer.

How a limit order differs from a market order

A limit order can also end up as a taker order. If you set a buy price above the best ask, the order fills immediately, and you pay the taker fee.

Many exchanges offer a post-only option. Such an order either rests in the book as a maker order or is canceled if it would fill immediately.

Why makers pay lower fees

Exchanges benefit from a dense order book: a tight spread and good depth attract traders. Makers fill that book, so exchanges charge them less.

On some venues and tiers, the maker fee is zero or even negative - in that case the exchange pays you for liquidity. Takers pay more because they consume existing liquidity and get speed in return.

On futures, exchanges have their own fee schedule, separate from spot. But the maker and taker split works the same way there.

How to reduce exchange fees

Fee schedules differ between exchanges and change often, so always check the exact rates on the fee page of the specific venue. The general ways to save, however, are similar.

• VIP tiers. The rate goes down as your trading volume over the last month or your balance on the exchange grows.
• Exchange token discount. Many venues lower the fee if you pay it in the exchange's own token.
• Maker orders. Where speed is not critical, a post-only limit order is cheaper.
• Referral and promo programs. Sometimes they give a temporary fee discount.

From what we see, the maker-taker difference is exactly what traders underestimate most often. On large turnover, it adds up to a noticeable sum.

Keep in mind that discounts do not always stack. Sometimes the token discount only applies up to a certain VIP tier, and promotions have an expiry date.

How fees eat the spread in arbitrage

A cross-exchange trade involves at least two trades, and more often four: entry on two exchanges and exit on two. A fee is paid on each one.

A hypothetical example

Take textbook rates: taker 0.1% per trade, maker 0.02%. The cross-exchange spread on a coin is 0.35%, and the trade is opened and closed on two exchanges.

With taker orders only, the trade goes negative even before slippage. Switching to maker orders where possible makes the spread worth taking again.

Add slippage from the order book and the network fee if the trade requires moving coins. The spread cushion melts even faster.

But being a maker has its own cost: your order may not fill while the market moves away. In arbitrage, the window often lasts seconds, and an unfilled leg is more dangerous than an extra fee.

How to account for fees when calculating a trade

We believe fees should be built into the calculation before entry, not remembered afterwards. The minimum workable spread must cover the fees on all legs, slippage and the cost of the transfer.

It helps to keep a simple table for the exchanges you use: maker and taker rates on spot and futures, your VIP tier and current discounts. Then the entry threshold for each pair of venues takes a minute to calculate.

If one of the legs is a perpetual future, funding is added to your costs. It is paid not per trade but for the time you hold the position, and it also eats part of the spread.

The futures spread calculator shows what is left after fees and slippage, so it is easy to run this check in advance.

In our view, the most honest approach is to calculate for the worst case, where all legs are taker orders. If the trade still works, maker orders become a nice bonus.

Our tools

Fees differ between exchanges, so the same price gap on different pairs of venues produces different results. Our arbitrage screener keeps dozens of venues in one window, refreshes quotes every second and shows each gap together with the volume actually behind it. The spread calculator helps you check what survives fees, network costs and slippage at your size. The bot is fully manual. It never connects to your exchange API keys.

To test the tools on a live market, ArbitrageScanner offers one day of free access to the whole ecosystem.

FAQ (Frequently Asked Questions)

1. What is a maker on an exchange?

A maker is a trader whose limit order rests in the order book and adds liquidity. Makers usually pay a reduced fee.

2. What is a taker on an exchange?

A taker takes an order already resting in the book, most often with a market order. The taker fee is usually higher than the maker fee.

3. Why is the maker fee lower than the taker fee?

Makers fill the order book and make the market more liquid, so exchanges charge them less. Takers pay for speed and for using existing liquidity.

4. What is a post-only order?

It is a limit order that is guaranteed to rest in the book as a maker order. If it would fill immediately, the exchange cancels it.

5. How can I lower fees on a crypto exchange?

Use limit orders, move up VIP tiers through volume or balance, and pay fees in the exchange token if the venue offers a discount for it. Check the exact terms on the specific exchange's fee page.

6. How do I account for fees in arbitrage?

Add up the fees for all legs of the trade on entry and exit, then add slippage and the transfer cost. The trade only makes sense if the spread covers the full amount.

Conclusion

A maker adds liquidity and pays less, while a taker removes it and pays for speed. The difference looks small, but in arbitrage it is multiplied by the number of legs in the trade.

Calculate fees before entry and for the worst case. If the trade holds up at taker rates, everything else becomes a safety margin.

IMPORTANT! We are software developers. We do not give recommendations or promises of earnings and we do not advise you to invest your money anywhere. Our software is fully manual, all your money stays under your own control. We show examples of how our clients have earned on arbitrage in the past, but we do not advise repeating those actions one to one. Your earnings depend solely on your own actions and on market factors.