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How to Benefit From Negative Fees: Difference Between Maker & Taker Orders

Paymium
Paymium

The cryptocurrency exchange of trust for individual and institutional traders and investors.

Paymium is the only BTC/EUR exchange platform that allows you to benefit from negative fees. To make it simple, you get a trading reward instead of paying a fee, on each of your maker orders.

Amazing, isn't it? And you don't even need a master's degree in finance to be able to enjoy it. You just need to learn how to identify two simple order types.

Every order is an instruction you send to the trading platform, to buy or sell for a defined price.
To give extra possibilities and a higher flexibility, there are different types of orders, allowing you to process different instructions.

Orders placed on Paymium can be of two types: maker or taker

As long as your order is not fully filled instantly, it is considered as being a "maker order". If you make a limit order (that does not match instantly), you will be maker.
On the contrary, orders filled instantly are “taker orders”. Placing a market order means you will be taker.

Practically, you can see it like this: a maker order “makes (builds) liquidity” while a taker order “takes (destroys) liquidity” from the orderbook.
A higher liquidity in the orderbook means that the platform will offer a better price and better availability. This is why we reward the liquidity “builders” (makers).

To illustrate the functioning of this 2 different orders let’s see 3 cases where you can easily identify each order!
Ready?



SIMPLE INTERFACE (Paymium - Blockchain.io)


CASE 1
The easiest way to buy crypto is to use a simple interface, here is the Paymium interface. On Paymium, you have the choice to whether proceed a market or limit order. Here, I am buying approximately 0.05 BTC in EUR with a market order. I take out liquidity from the orderbook, I am a taker.




ADVANCE INTERFACE (Paymium - Blockchain.io)

CASE 2
Now let’s go on the advance interface! The last sell order (on the “Asks”side) is 0.021 BTC at the price of 8211.72 for 1 BTC. I place a limit order to buy 0.021 BTC at the price of 8200 for 1BTC. My buy price is lower than the last sell order and thus cannot be executed for the moment. It is added to the orderbook, making the liquidity as a maker order.

Note that the negative fees feature works on this type of orders. If you want to benefit from a trade rewards, you should privilege maker orders!

In the following orderbook, the sell orders (Asks) are in the red book, the buy orders (Bids) are in the green book.



CASE 3
Here, the last sell order on the advance interface is 4.6 BTC at the price of 8715€ for 1BTC (yep, we have a big fish here!). The second-to-last order is 0.1 BTC at the price of 9098€ for 1 BTC. I place a limit order to buy 5 BTC for 8715€ (I am a bigger fish).

Here, i’ll be able to buy instantly only 4.6BTC at the market price, it is a Taker Order. The 0.4 BTC remaining will be filled later, when a seller will decide to sell BTC at the price of my order, this is a maker order.
My order is then a taker and a maker at the same time!

To sum up:
Buying/selling at the market price is taking liquidity out of the orderbook, as you accept the first offer.
At the contrary, placing an order for another price is making liquidity as your trade is waiting to be matched. These are the basics order on a trading platform.
The negative fees feature works with the maker orders, you should then use them if you want to be rewarded for trading!

Paymium
Paymium

The cryptocurrency exchange of trust for individual and institutional traders and investors.

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