This article has been translated from English to Gen Z Slang.
Trading crypto ain't free, peeps. 😲
When you're copping or ditching crypto on a trading app by a centralized crypto exchange (CEX), you gotta deal with those trading fees.
It's vibes to know what kinda fees these exchanges slap on ya and how they roll. 🙉
Mostly, when you're tryin' to figure out them exchange fees, it comes down to the order type you're whipping up, and you get charged when your order's like, executed and matched.
Orders usually vibe in two flavors:
- Orders that hit ya with “maker fees“
- Orders that hit ya with “taker fees“
Maker fees be chill compared to taker fees. And both flip-flop based on your average trading volume over, like, the last month or so. 📅
As you trade more and more, those fees skrrt lower as a tiny piece of your trade size. 🔥
This sesh, you're gonna get the lowdown on:
- How them crypto exchanges flex with a fee structure called the “maker-taker” fee model.
- The 411 on “maker” and “taker“.
- What “maker fees” and “taker fees” are and how they stack up against each other.
Who’s a Maker and Who’s a Taker? 🕺
Okay, okay, here’s the tea: crypto exchanges hook buyers and sellers up, like speed dating for crypto. 💃 They slide in and charge a fee when your order’s executed (“matched” with another homie’s order).🤝
The fee depends on these deets: 🎯
- The trading pair you pick 👫
- Your trading volume track record 📈
- Whether you’re team maker or team taker 🤔
Most exchanges are all about that “maker-taker” fee model to sort out them fees for y’all. 💼
The maker-taker gig works by splitting fees between orders that make it rain liquidity (“maker” orders) and those that scoop it up (“taker” orders). 🌊
If you drop an order that’s done lickety-split, you’re a “taker” ‘cause your order grabs liquidity. So yep, you'll get hit with a “taker fee“. 💨
If your order chills on the order books before partying, you’re a “maker” ‘cause your order adds liquidity, and it's gonna get a “maker fee“. 👍
Makers and takers roll with different fees. Let’s dive deeper... 💦
What’s a Maker Fee? 💸
The “maker fee” is the cost for hyping up the order book with “maker” orders. 💥
A maker order sits tight if it doesn’t get instant action with a buyer’s (or seller’s) order on the order book. 😴
To be in the maker squad:
- Your buy order gotta be lower than the lowest sell order (aka “ask”). 🤑
- Your sell order gotta be higher than the highest buy order (or “bid”). 💰
Your order gets comfy on the order book, making you a “maker”. 🙌
A limit order = Your Maker Move 🎯
Submit a limit order that doesn’t act right away? Boom, you’re a maker order. 🚀
Imagine this: BTC/USD is chilling at $31,000, and you slide in a buy limit order for 1 BTC at $30,000. That order ain't gonna fill instantly.Instead, it’ll lounge on the order book, catching rays until the price dips to $30,000. ☀️
By dropping this order, you’re called a “maker” ‘cause you brought liquidity and “crafted” a market. 🛠️
Without your splash, no one might grab 1 BTC for $30,000. 😶
So, if a seller pops up for 1 BTC at that price, and there’s no other buyer, it’s like crickets at eBay if no one wants your flashy Rolex or Hermès! 🦗💍👜
Thanks to your order, you “made a market” ‘cause now you’re the baller ready to buy. That’s why you’re the “maker”. 😎
Taker Fee - Diving In 💦
The “taker fee” is the charge for the FOMO folks who want it now with “taker” orders. 😱💰
A taker order gets matched like a turbo with a buyer’s (or seller’s) order waiting on the board. 🏎️💥
To step into the taker shoes:
- Your buy order’s gotta hit the lowest sell order (the “best ask”). 👟
- Your sell order’s gotta match the highest buy order (“best bid”). 🕴️
Your order zaps and clears the order book, and just like that, you’re Team “Taker”. 🔥
Market Order = Taker Order Mood 🎯
Your market order is basically a taker order since it’s snappy fast. 🚀
Example time: BTC/USD is trading at $31,000. You summon a market order for 1 BTC, and bam! It's done. 💪
When you launch this move, you’re a “taker” ‘cause you scooped liquidity from the market. 💦
Without your move, that sell order at $31,000 would still chill with no takers. 🙇♂️
But your killer move means if another buyer wants 1 BTC at $31,000, there might not be any sellers vibin’ for that price. 👀
Show Me the Fees: Maker vs. Taker Examples 💸
Let’s slide into a crypto exchange and see how they charge a “maker” versus a “taker”. 💃🕺
Taker Fee Example 💸
Here’s the DL: 👇
- You wanna snag 3 bitcoin (BTC) at $30k each
- You’ve been flexin’ with a 30-day trading volume of $100,000
Based on the exchange’s menu of fees, you get either a:
- Maker Fee of 0.15%
- Taker Fee of 0.25%
Your order gets that taker fee glow-up 💁♂️
This deal shakes out at 3 * $30,000 = $90,000. 💰
You throw down a market order, and it fills like PB&J. 🥜🍇
Being a “taker”, your total “taker fee” hits different:
$90,000 * (0.25 / 100) = $225
Maker Fee Example 🤝
You're a big player in the game, aka “whale” 🐋, and this is what’s up:
- Snatchin’ up 100 Bitcoin (BTC) at $20,000 each
- Your mega 30-day trading volume is at $10,000,000.
Exchange’s fee menu serves you a:
- Maker Fee of 0.02%
- Taker Fee of 0.10%
In this trip, you’re forking out $2M – ‘bout what you spend on TP, right? 🚽
BTC/USD is cruising at $30K, so you drop a limit order at $20,000.
Your order’s posted up on the book, living its best life. 🏝️
Next thing you know, crypto takes a nosedive, your order gets filled. 📉💥
Since you’re in the Maker Squad, the “maker fee” rolls up like this:
$2,000,000 * (0.02 / 100) = $400
Peep that the maker fee is lower, making it rain logic for traders to stack liquidity. 💧
The snag? Maker orders can sometimes take their sweet time getting love. If ya ain’t seeing action, it might just camp out forever if the market’s looking “thin”. 😅
Wrap It Up with Some Maker and Taker Wisdom 🤓
A trade game is formed by the dance of makers and takers. 🎭
An order always has a maker and a taker. You can't have one 'side' without the other. 👫
Makers roll with creates orders that don’t jump off the page instantly, crafting liquidity, meaning other folks can vibe out and buy/sell pronto if they dig the maker’s vibe. 🌊
The peeps who want in and out quick, callin' themselves “takers”. They “take” those orders the makers… well, make. 🤗
Makers fork over a “maker fee” when life makes their order happen, while takers hit up a “taker fee”. 🧾
Your order might get hit with both. Example time: 📌
You place an order, and it’s partly matched on the spot; you’re getting a taker fee for that slice. 🍕
The rest of your order sets up camp on the books, awaiting the day it’s filled for that maker fee. 🌅
Say you peep 2 BTC. One BTC fills fast (taker fee), but if others ain’t down with your price, you’re just gonna chill ‘til one shows up. Then, when it matches, you’d be paying the maker fee. 🤪
IMHO, always hitting them with a limit order for those sweet low maker fees. 😎
Crypto exchanges drop blessings on makers with low fees since they add that liquidity spice. Since takers love that “immediacy” for fast buys/sells, they pay more in fees for the aimee vibe. 💸
Summed up:
- Makers “craft a market” by setting up orders for others to chase.
- An order gets hit with the maker fee if it catches a nap before getting matched on the books.
- Takers scoop liquidity, snagging those available orders pronto (and pay taker fees).
- An order's a taker order if it’s matched up pronto with what’s already in waiting.
| “Maker” Orders | “Taker” Orders |
| Adds vibes and liquidity | Clears out liquidity |
| Takes its time - chillin’ | Boom, fills in a flash |
