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![maker-taker-model.png](https://cdn.steemitimages.com/DQmWcBJ54GtNLhqzY9YcmxXMLRhUZgX4CM9zXqcRWWAu4tH/maker-taker-model.png)
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A while back I was trying to figure out Coinbase fees and I ran into the terms 'maker' and 'taker'.  I didn't really understand what these things meant by the definitions given in the Coinbase FAQ so I thought I'd mention it here. 

# Maker
Being a maker means you've created (made) liquidity on the market.  Say Litecoin is selling for $100.  If you place an order to buy Litecoin at $99 or sell Litecoin at $101 you are a maker.  Even buying at $99.99 and selling at $100.01 would make you a maker.  Makers help lower the volatility of the asset being traded and are often rewarded by the exchange.  On Coinbase, makers pay no fees.   However, if everyone was a maker nothing would ever get sold in the first place.  Every transaction pretty much requires one person to be the maker and one person to be the taker. 

# Taker
A taker takes liquidity away from the market and will drive the price of an asset up if they buy and down is they sell.  The taker fee on Coinbase is 0.25% (x0.0025).  Most of us poor folk will never actually visibly change the value of an asset by being a taker.  That would require a lot of money.  Still, every taker takes away liquidity and moves the price in one direction or another. 

# [Binance (BNB)](https://steemit.com/ethereum/@edicted/binance-coin-and-dai)
As far as I can tell, Binance gives no incentive to be a maker.  They charge the same fee no matter what.  0.1% max and 0.05% min (if you own BNB and it's your first year of trading).  They also charge a custom flat fee to remove funds from the exchange.  Check the link above for more info. 

# Coinbase
Coinbase charges nothing for being a maker and 0.25% for being a taker.  They charge zero fees to remove funds from the platform.  This is a great business model for consumers because Coinbase is the easiest way for Americans to turn USD into crypto and they often want to move funds out of Coinbase and onto another platform.  

A disciplined trader can use Coinbase to incur zero friction in the form of fees.  You simply have to decide in advance what prices you are willing to buy and sell at.  Trading in this manner is good for the cryptosphere because you are part of the solution to lowering market volatility.  Coinbase understands the value of this dynamic and rewards users with zero fees.