One of the first concepts every cryptocurrency trader should understand is the difference between a maker and a taker. Although the terms may seem technical at first, they simply describe whether your order adds liquidity to the market or removes it.
This distinction affects trading fees, execution speed and, in some cases, the overall efficiency of your trading strategy. Whether you trade on Binance, Bybit, OKX, Bitget or participate in a crypto prop trading program like Hash Hedge, understanding the difference between maker and taker orders can help reduce trading costs and improve execution quality.
- What Is a Maker?
- What Is a Taker?
- Maker vs Taker: Key Differences
- How Maker Orders Work
- How Taker Orders Work
- Maker Fees vs Taker Fees
- Which Order Types Become Maker or Taker?
- Advantages of Being a Maker
- Advantages of Being a Taker
- Which Is Better for Prop Traders?
- How Hash Hedge Traders Can Benefit
- Common Beginner Mistakes
- Final Thoughts
What Is a Maker?
A maker is a trader whose order adds liquidity to the Order Book.
This usually happens when a trader places a Limit Order that is not executed immediately. Instead, the order remains on the exchange until another trader accepts the offered price.
Since makers increase available liquidity, exchanges generally reward them with lower trading fees.
What Is a Taker?
A taker is a trader whose order immediately matches an existing order in the market.
Instead of adding liquidity, the taker removes liquidity from the Order Book.
Because immediate execution consumes available market liquidity, exchanges typically charge slightly higher fees for taker orders.
Maker vs Taker: Key Differences
Although both makers and takers participate in every trade, they play different roles in the market.
- Maker adds liquidity.
- Taker removes liquidity.
- Makers usually pay lower fees.
- Takers receive immediate execution.
- Both are essential for efficient markets.
Neither role is inherently better—the best choice depends on your trading strategy.
How Maker Orders Work
Suppose Bitcoin is currently trading at $118,500.
You place a Limit Buy Order at $118,300.
Your order enters the Order Book because no seller is currently willing to accept your price.
Later, another trader sells Bitcoin at your requested price.
Since your order was already waiting in the Order Book, you acted as the maker.
How Taker Orders Work
Now imagine you decide to buy Bitcoin immediately.
You submit a Market Buy Order.
Your order instantly matches the lowest available Ask Price already sitting in the Order Book.
Because your order removed existing liquidity, you acted as the taker.
Maker Fees vs Taker Fees
Most cryptocurrency exchanges use a maker-taker fee model.
- Maker Fees are generally lower.
- Taker Fees are usually slightly higher.
- Some exchanges even offer negative Maker Fees for institutional liquidity providers.
- Fee discounts may be available for high-volume traders.
The exact fee schedule depends on the exchange and your trading volume.
Which Order Types Become Maker or Taker?
The order type alone does not determine whether you are a maker or taker.
Instead, the deciding factor is how your order interacts with the existing Order Book.
- Market Orders almost always become taker orders.
- Limit Orders often become maker orders.
- Limit Orders that execute immediately may also become takers.
- Resting orders waiting in the Order Book are makers.
Advantages of Being a Maker
- Lower trading fees.
- Reduced long-term trading costs.
- Better for algorithmic trading.
- Suitable for patient execution.
- Supports market liquidity.
The downside is that there is no guarantee your order will be executed.
Advantages of Being a Taker
- Immediate execution.
- Useful during fast-moving markets.
- Better for breakout strategies.
- Ideal when speed is more important than price.
- Reduces the risk of missing trading opportunities.
The trade-off is paying slightly higher transaction fees.
Which Is Better for Prop Traders?
Professional prop traders use both maker and taker orders depending on market conditions.
During normal trading sessions, many traders prefer maker orders to reduce transaction costs. However, when protecting an open position or reacting to unexpected volatility, immediate execution often becomes more important than saving a small amount on fees.
The most successful traders understand when each approach is appropriate.
How Hash Hedge Traders Can Benefit
Hash Hedge traders should understand both execution methods because trading costs can accumulate throughout a Challenge or funded account. Efficient use of Limit Orders may reduce commission expenses, while Market Orders remain valuable when immediate execution is necessary for proper risk management.
Balancing execution speed with lower trading costs helps traders maintain consistency over the long term.
Common Beginner Mistakes
- Thinking Limit Orders are always maker orders.
- Using only Market Orders.
- Ignoring exchange fee schedules.
- Confusing trading fees with spreads.
- Choosing execution speed when patience would reduce costs.
Final Thoughts
Maker and taker orders are fundamental concepts in modern electronic trading. Makers improve market liquidity by placing resting orders, while takers consume liquidity by executing immediately.
Neither approach is universally better. Professional traders choose the appropriate execution method based on their trading strategy, market conditions and risk management objectives. Understanding when to act as a maker or a taker can help reduce trading costs while improving overall execution quality.
Continue reading: