Maker vs Taker Fees: What is The Difference?
Limit orders let you trade with pinpoint precision, whereas market orders allow instant trades. These order types are often referred to as maker or taker orders, each with a different fee structure. In this guide, we’ll explore maker vs taker fees, compare fees for top exchanges, and examine the effect of each fee structure on trading profitability.
The seemingly small differences in cost can add up if you trade often or on larger orders. However, each of these order types can also be advantageous in certain situations. Maker and taker fees are also used in other financial markets, such as stock trading. So, it’s important to understand each type of trade order and the fees for each. So, what are maker and taker fees? Let’s find out.
What are Maker Fees?
Maker fees refer to the trading fees crypto exchanges charge for limit orders. A limit order adds trading liquidity to an exchange order book, allowing other traders to buy or sell against it. As the name suggests, a limit order sets a price limit for your order.
For example, you might create a limit sell order for 1 bitcoin (BTC) at $50,000 when BTC currently trades at $49,000. By using sell orders and making your BTC available to buy at $50,000, you’re “making” new liquidity for trades.
Maker fees are charged as a percentage of the trade amount. In the example above, you’d pay fees based on the value of your trade when the current market price of BTC reaches $50,000.
Maker Fee Example
Let’s look at some examples. We’ll use Kraken Pro’s maker fees to do the math. Kraken uses a tiered fee schedule based on 30-day trading volume, which is common in the crypto space.
We’ll look at two examples of calculating fees based on trading volume. Here are the base fees we’ll use.
- $0 to $10,000: 0.25% Maker Fee
- $10,001 to $50,000: 0.20% Maker Fee
These fee tiers can become relevant as your own trading volume increases. However, they are typically based on past orders rather than the current order you’re placing. For example, Kraken and Coinbase both only consider past orders when determining the fee tier.
Let’s examine a BTC buy order for 0.01 BTC, assuming a limit price of $50,000. When (or if) Bitcoin’s price reaches your price, the order will be executed immediately, and you’ll pay a maker fee.
- $50,000 x 0.01 = $500
- $500 x .25% (maker fee) = $1.25
In most cases, the fees are settled when the trade executes. In this example, you’ll pay $1.25 for the trade.
Now, let’s assume you’ve done a more substantial amount of trading in the past 30 days and now qualify for the next tier (0.20%).
- $50,000 x 0.01 = $500
- $500 x .20% (maker fee) = $1.00
While the $0.25 might not seem like a big difference, if you’re a frequent trader or trade in a larger size, the savings become more significant.
Check your order settings carefully. Several exchanges like Coinbase and Kraken toggle off the “post only” setting by default, meaning some limit orders may execute with higher taker fees.
What are Taker Fees?
Taker fees refer to fees for market orders. A market order, also called a taker order, takes from the existing liquidity on the exchange (maker orders), filling the order from open limit orders on the exchange. In addition to being a bit more expensive, fees for taker orders can be more complex to calculate because the order might fill at multiple price points.
Taker Fee Example
Let’s look at another example using the same 0.01 BTC order amount but using a market order.
First, we need to examine the existing orders on the exchange. For high-volume assets like BTC, these can change rapidly on busy exchanges.
The existing orders are displayed in the order book.
- Sell order 1: 0.0025 BTC at $50,000
- Sell order 2: 0.06 BTC at $50,500
While a spread this wide is unlikely, it makes the illustration clearer. The lowest sell order isn’t large enough to fill your market order for 0.01 BTC. Your market order will take that liquidity off the exchange first and then use the next available order.
Here’s how the order will be filled:
- 0.0025 BTC at $50,000
- 0.0075 BTC at $50,500
Using Kraken as an example again, taker fees will cost 0.40%, assuming you don’t qualify for a better fee tier based on trading volume.
- 0.0025 x $50,000 = $125
- 0.0075 x 50,500 = $378.75
The cost to buy 0.01 BTC has grown from $500 with a maker order to $503.75 using a taker order. Now, let’s look at the taker fees.
- $125 x 0.40% = $0.50
- $378 x 0.40% = $1.515
$0.50 + $1.515 = $2.015
Most platforms will show an estimated fee based on the open orders in the order book, and there’s no need to calculate the fees manually. In this example, using a taker order will cost you $3.75 more for the 0.01 BTC and $1.015 more in trading fees.
Comparing Maker/Taker Fees on Crypto Exchanges
When comparing maker vs taker fees, it also makes sense to compare fees across exchanges. Fees aren’t the only consideration when choosing an exchange, but they can affect trading costs and profitability over time.
The table below shows maker vs taker fees for several leading exchanges at the base tier, usually up to $10k in 30-day trailing trading volume. Most exchanges offer additional fee discounts based on higher volume. You might also find lower fees for certain pairs, like BTC/USD.
Maker vs Taker Fees for Top Exchanges (Spot Trades)
| Exchange | Maker Fee | Taker Fee | Comments |
| Coinbase | 0.6% | 1.2% | Coinbase offers a considerable discount for Advanced 2. Volume greater than 1k earns 0.35% maker and 0.75% taker fees. |
| Kraken | 0.25% | 0.4% | Instant buy transactions do not count toward higher volume tiers. |
| Binance | 0.1% | 0.1% | Binance offers additional discounts for fees paid in BNB or higher volume combined with the BNB balance held. |
| Gemini | 0.40% | 0.2% | Several stablecoin pairs allow free conversions from USD/GBP. |
| OKX | 0.08% | 0.1% | OKX offers additional discounts based on trading volume or OKB token holdings. |
| MEXC | 0% | 0% | Before promotional fees, MEXC charged 0.1% for maker and taker fees. |
| Bybit | 0.1% | 0.1% | Non-crypto trading pair fees start at 0.2% taker and 0.15% maker. |
| Kucoin | 0.1% | 0.1% | Save 20% by paying trading fees with KCS tokens. |
Binance Maker and Taker Fees
Binance is the largest crypto exchange in the world by trading volume. Low trading fees play a big role in helping the exchange hold the top slot.
Base-tier trades cost 0.1% for both maker and taker trades, which allows you to trade quickly if needed without paying higher fees.
The platform also offers a 25% discount for fees paid with BNB, reducing base fees to 0.075% for maker and taker fees. Binance also offers nine additional VIP levels, with each providing additional trading discounts based on trading volume and the amount of BNB held by the account holder.
VIP 1, the first tier following the standard user tier, requires a minimum trailing 30-day trading volume of $1 million and 25 BNB held. VIP levels 1 and 2 earn an additional discount on maker fees, although taker fees remain fixed at 0.1%. VIP levels 3 through 9 enjoy discounts on both maker and taker fees.
Coinbase Maker and Taker Fees
Coinbase is the largest publicly traded exchange and a trusted, secure custody provider for most of the new Ethereum ETFs. While Coinbase offers fewer cryptocurrencies than Binance, the platform’s selection covers the most popular cryptocurrencies and continues to grow.
Although many consider Coinbase one of the most trusted exchanges, its fee structure is frequently criticized. Maker and taker orders on Coinbase Advanced were the highest among the platforms we compared. At the base level, traders pay 0.6% for maker orders and a whopping 1.2% for taker orders.
However, the next fee tier is within easier reach for many traders. Accounts with $1,000 in 30-day trading volume earn lower fees of 0.35% for maker orders and 0.75% for taker orders.
Coinbase also offers a subscription for active traders called Coinbase One.
A monthly payment of $29.95 unlocks fee-free trading as well as additional features like premium support.
Kraken Maker and Taker Fees
Kraken offers one of the cleanest cryptocurrency trading screens you’ll find anywhere and has been a top destination for crypto traders since 2011.
Although Kraken’s base fees are higher than Binance, users flock to the platform due its reputation for safety and security. Maker fees cost 0.25% with taker fees at 0.4%, both of which come in lower compared to Coinbase. Higher-volume traders with a trailing 30-day trading volume of $10,001 or more earn additional trading discounts. The first discount tier brings maker fees down to 0.2%, whereas taker fees drop to 0.35%.
Both Coinbase and Kraken are available to US traders in most states, making both exchanges popular alternatives to Binance, which doesn’t serve US traders from its main exchange.
Which Exchange Has The Lowest Maker Fees?
As of this writing, MEXC offers the lowest trading fees based on its 0.0% maker and taker fees. It’s tough to beat free.
However, this promotional fee launched in early 2024 may not last. Before the promotion’s launch, MEXC charged 0.1% for maker fees.
Here are the lowest costs for maker fees among the leading exchanges.
- MEXC: 0.0% (formerly 0.1%)
- OKX: 0.08%
- Binance: 0.1%
- Bybit: 0.1 %
- Kucoin: 0.1%
Which Exchange Has The Lowest Taker Fees?
Unsurprisingly, the exchanges with the lowest taker fees mirror those with the lowest taker fees. Here’s how it looks.
- MEXC: 0.0% (formerly 0.1%)
- OKX: 0.1%
- Binance: 0.1%
- Bybit: 0.1%
- Kucoin: 0.1%
Nearly all charge the same percentage for market maker vs taker fees, with the exception of OKX, which charges 0.02% more for market orders.
Of note, you may find lower (or higher) trading fees depending on the trading pair. For example, OKX charges just 0.7% taker fees for certain trading pairs, including BTC trades.
Conclusion
Frequent trading or high-value trades can get expensive quickly, which makes it important to compare maker vs. taker fees and decide which best suits your trade. If you have to trade quickly, you may have to pay taker fees for a market order.
However, several exchanges charge the same price or percentage for maker and taker trades, giving you more flexibility. Most exchanges also offer additional discounts based on volume, which makes it beneficial to channel more trades on select exchanges rather than using a different one each time.
FAQs
What is the difference between a maker and a taker?
A maker is someone who adds trading liquidity to an exchange by using limit orders. A taker “takes” liquidity off the exchange by buying or selling against the supply provided by market makers.
How do you calculate maker and taker fees?
Maker and taker fees are a simple percentage of the trade amount. Multiply the fee by the trade amount. For example, a $500 limit order on Binance pays a maker fee of 0.1%. $500 x 0.1% = $0.50.
How do you know if you’re paying maker or taker fees?
The type of order you place determines whether you pay maker vs taker fees. Limit orders qualify for maker fees, which often cost less. Market orders take liquidity off the exchange and come with taker fees, which often cost more.
Is a limit order a maker or taker?
A limit order is a maker order. However, on some exchanges, your order might be immediately executed as a taker order if you don’t set the toggle on the Post Only option.
References
- New updates to Coinbase One: zero trading fees, boosted staking rewards & partnerships (coinbase.com)
- Industry leading fees across all our products (kraken.com)
- OKX Fee Schedule (okx.com)
Source: cryptonews.com
