Market Maker, Market Taker

A market maker is someone who places a buy/sell order, while a market taken is the one who accepts and facilitates those orders. It is through the parity between a market maker and a market taker, that trades are completed.

The same traditional order book model is followed by crypto exchanges and early DEX, where the buy/sell market orders are displayed for the market takers. Market makers play a significant role since they add liquidity to the market.

Market makers aspire to make profiles from the bid spread and volatility within the market. Similarly, market takers need liquidity in order to enter and exit from their desired positions.