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Glossary Term

Market Maker

A participant that continuously quotes both buy and sell prices, providing liquidity and earning the spread.

A market maker continuously posts both bids and asks, standing ready to trade either side and profiting from the spread. By always offering a counterparty, market makers provide the liquidity that lets others trade instantly without moving price much.

In crypto, professional firms make markets on centralized exchanges, while AMMs automate the role on-chain. Exchanges court them with rebates (the maker side of maker-taker fees) because deep liquidity attracts traders. Their presence is why major pairs have tight spreads; their sudden withdrawal during stress is why spreads blow out exactly when you most want to trade.

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