Maker or Taker?

Learn how these are different on Synthetix Exchange

In derivatives trading, the terms maker and taker describe different types of market participants based on how they interact with liquidity. Here's how these roles function traditionally and how they work in the Synthetix Exchange system.

Traditionally: Makers and Takers

In a traditional derivatives market, makers create orders that add liquidity to the market. These "resting" orders are placed on the order book, ensuring there are enough options for others to trade against. Takers, on the other hand, accept these orders, executing trades and removing liquidity from the market. To encourage liquidity, makers often receive lower fees or discounts compared to takers.

A Simple Analogy

Imagine a lemonade stand at a marketplace. Makers are like the people setting up the stand and displaying the lemonade price—they provide the offers. Takers are the buyers who come to purchase lemonade at the listed price—they accept the offers and remove the supply. This dynamic keeps the market both liquid (thanks to makers) and active (thanks to takers).

On Synthetix Exchange

Synthetix Exchange uses an Automated Market Maker (AMM) model, leveraging the Synthetix liquidity pool to fill all orders at a skew-adjusted oracle price. In this system, maker and taker roles are defined by their interaction with market skew:

• Maker Orders are trades placed against the current market skew, such as trading in the less-populated direction. These trades benefit from lower fees.

• Taker Orders are trades placed with the market skew, such as trading in the more-populated direction. These trades incur higher fees.

If a trade shifts the market skew (e.g., from positive to negative), it may result in an order being partially filled at both the maker and taker fee tiers.

How to Understand Your Fees

To determine the fees you’ll pay on a trade, check the current market skew or use the trade preview to see the estimated costs.

Example

The market above has $4,000 higher short open interest than long open interest, indicating a short skew of $4,000.

• All short traders will pay taker fees.

• Long traders up to $4,000 will pay maker fees.

• A long trader opening a trade larger than $4,000 will pay maker fees on the first $4,000, and taker fees on the remaining size of the position.