I was just thinking that after many people enter the crypto trading market, they often notice an interesting phenomenon: with the same kind of trading, some people pay particularly low trading fees, while others have to pay more. Actually, the logic behind this is whether you are a market maker or a market taker—the well-known difference between market maker vs taker.

Let me first talk about the concept of liquidity, because understanding it is truly crucial for trading. In the crypto market, liquidity refers to how quickly an asset can be bought and sold without causing too much impact on the price. Think about it: if a coin has a large trading volume and many participants, buying and selling becomes easy, and the spread is small. Conversely, if not many people trade it, the price will swing very sharply—this is a manifestation of poor liquidity.

So what determines whether liquidity is good or bad? First, it depends on trading volume: the higher the trading activity of a coin, the better the liquidity. Then, it depends on the size of the exchange—larger exchanges typically have deeper liquidity. Also, it depends on the depth of the order book, which determines how many buy and sell orders you can find at different price levels. Coins like Bitcoin and Ethereum naturally have high liquidity because there are so many participants.

Now let’s get to the core. The role of a market maker is to place orders in the order book, providing liquidity to the market. For example, Ethereum is at $2100 right now. A market maker might place a buy order at $2000 and, at the same time, place a sell order at $2100. This creates a market, and other people can come trade at any time. In contrast, market takers are those who directly take these orders—they use market orders to execute immediately, regardless of what the price is.

There’s an important difference here: market makers use limit orders, meaning “I want to trade at this price,” while takers use market orders, meaning “I need to trade right now, price is whatever.” If a market maker places sell orders for 3 ETH at $2100, and a taker sees that price and buys directly, the trade gets executed. It sounds simple, but this market maker vs taker model is crucial to how the entire market operates.

The fee difference is the most obvious part. Why do exchanges offer discounted fee rates to market makers? Because they provide liquidity, which is valuable to the exchange. Takers are different—they take away liquidity, and the exchange charges them higher fees. Some exchanges also tier fees based on trading volume, so large accounts may enjoy lower fee rates. This is why some professional traders pay special attention to the fee structure, because over the long run, these fee differences can make a real impact on returns.

However, both of these roles come with their own risks. The main risk for market makers is market volatility—they hold assets while also bearing the risk of price changes. If the market suddenly swings sharply, they might get stuck on the wrong side. The risk for takers lies in execution pressure and slippage—in particular, in markets with poor liquidity, large orders can cause significant price slippage, and the final execution price may end up far different from what they expected. Also, takers pay higher trading fees, which eats into part of their profit.

To do better in crypto trading, understanding the market maker vs taker logic is necessary. You need to choose strategies that fit your trading style, manage risks well, and pay attention to the fee structure. If you often do short-term trading, you may be better off understanding the costs of takers; if you want to be a liquidity provider, you need to learn how to protect yourself amid volatility. These are real situations happening on major exchanges like Gate. If you’re interested, you can try different trading approaches on the platform and see which one fits your style better.