Grassroots crypto education S2volume10|| the concept of market makers and takers||by @habdallah

1.Briefly Explain an Order book in the Crypto Ecosystem. What is your understanding of Market Makers and Market Takers? State their Differences.

2.What are the types of orders that can be utilized by Market Makers and Market Takers? Show an illustration from an exchange with screenshots (It's not necessary to make real trades, please take note)

Hello everyone. I hope you are all safe and doing well. I come to you all with my entry task of the 10th lecture by @fredquantum. This lecture is a little mind bugging but very interesting and educative. Moving on to the task at hand.

Order book in the crypto ecosystem can be referred to as a list or collection of buy and sell oders in the crypto market which are created by market makers. The collection or lists try to show the bid price point of a particular cryptocurrency. The orders created by the market makers in the order book determines the volatility of the crypto market.
This is where most(order book) where most people use to place a trade, that is either to buy or sell. All this happens in a centralized exchanges like binance and huobi.
The constituents of the order book,that is those trader who utilizes the order book are the market makers and market takers.

MARKET MAKERS
The term market maker is any individual that creates or makes orders either for buy or sell on the order book on a crypto market for other to utilize. They create a buy or sell order for a particular cryptocurrency. The market makers in a crypto market are responsible for the increase in liquidity of the market.
Aside from them(market makers) creating buy or sell orders they also take profits from the orders they have created. They take the profit by imposing a charge on either the buy or sell orders they have created in the order book. They also benefit when the price of a particular asset drops.

MARKET TAKERS

The market takers as their literally indicates who or what they are in the market. The market takers are the particular people on the crypto market that utilizes or accept the orders created by the market makers. They try to work with the buy and sell orders in the order book created by the market makers. Market takers uses the orders created for a quick or instant change of cryptocurrency.
Market takers can enter into a trade instantly with a market order either to buy or sell. They can set a trade above or below the market order with the limit order too.

DIFFERENCES BETWEEN THE TWO

• Market makers are charged with low fees because they consume less liquidity and also creat orders for a particular cryptocurrency. In the incase of the market takers, they consume high liquidity and are charge with high fees.
  In most cases the market makers are not charged with any fees.

• Market makers creates a buy and sell order in the order book for market takers to use or utilize. Whiles market takers utilizes the order created by the market makers to place a market or limit order trade in the crypto market.

THE TYPE OF ORDER THAT CAN BE UTILIZED BY BOTH A MARKET MAKER AND A MARKET TAKER
The type of oder that can be utilized by the market takers is the market order and limit order. The market maker utilizes the limit order (post only).

Below is an illustration on how to place a trade as a market takers (using market order on binance app)

1.I first of all logged into my binance account in order to perform that activity.

1. I then checked for the price of a pair, which is Btc/Busd. Which is currently at 20,333.44
   After looking out for the price i clicked on the pair in other to proceed.

1. I then clicked on the buy order, i did that because i wanted to buy.

1. After clicking on the buy order option, i then changed the trading option from market order to limit order.

The trade would have been executed if i had typed in the amount i wanted to buy and it would have been shown in my trade history. But unlucky i didn't have any assets to proceed with the trade.

Steps on how to place a trade as market makers

I choose the pair i want to create an order, which is Btc/Busd. Which is currently at 20,333.44
After that i clicked on the pair in other to proceed.

I then clicked on the buy order, and then set my trade order to limit order. I then input the amount i want to buy.

After successfully buying, the trade would have appeared as a created independent order. That is an i personally created.

In conclusion, market makers creates an a crypto market order and the market takers utilizes them for instant cryptocurrency exchanges. Also you have to know that both the market makers and market takers are responsible for the liquidity of a particular cryptocurrency there by creating a suitable trading balance in the crypto market