Market Maker
A market maker quotes both buy and sell prices continuously, profiting from the spread while keeping markets liquid. In crypto they range from regulated tr
A market maker quotes both buy and sell prices continuously, profiting from the spread while keeping markets liquid. In crypto they range from regulated trading firms to anonymous wallets to the protocols themselves (many “DeFi” yields are just paid market-making).
Why it matters
Someone must always take the other side of your trade — understanding who, and what they’re paid, explains spreads, fake volume (wash trading to feign liquidity), and why new tokens offer “market-making deals” that are really disguised dumps. Healthy markets have competing makers; dead ones have one bot and a prayer.