Given the fact that @aggroed just yesterday announced Dswap, a market taker software that executes trades from available bids and asks, I assume it's a great thing to know the difference as both market makers and market takers are equally important when it comes to trade. Regardless if we're talking about the traditional market, forex, stocks, or crypto, sellers must be matched with buyers and vice versa. Without meeting these criteria trading would be pointless as every participant would have to promote its product and hope someone actually needs it.

I believe it's important to understand that liquidity plays a vital role in the whole process, therefore, it's essential for us to understand it.

What makes some asset liquid is demand, meaning that Bitcoin will get sold more quickly than Hive because there's a bigger demand for it. In that sense, we can state that Bitcoin is more liquid than Hive. To draw a more traditional parallel, an ounce of gold is a very liquid asset as it can be traded for money at any given time. Now, we can apply such a methodology to the whole industry.

A liquid market would stand for a market in which you can buy and sell assets for a good price in a relatively small period of time.

On contrary, the illiquid market will have no such properties, and selling your goods or services might be a more tricky task. To put it in simple terms, if you want to sell your asset, and there's no one interested, there's a high chance you'll just keep whatever you wanted to sell.

Market Makers

Many market makers are often brokerage houses that provide trading services for investors in an effort to keep financial markets liquid. A market maker can also be an individual trader (known as a local), but due to the size of securities needed to facilitate the volume of purchases and sales, the vast majority of market makers work on behalf of large institutions.

It's a definition taken from Investopedia, so it doesn't exactly represent real definition when it comes to the crypto market, especially now, after AMM protocols started taking place.
In simple terms, I would describe market makers as individuals or firms that provide funds to make certain asset/stock/crypto more liquid. If you ever traded anything online, you must have noticed that trades take longer to execute while some are traded instantly. It's no brainer to understand that more liquid markets attract more users. The more traders the better.

Market Takers

A market taker is a participant of the market, that is agreeing with the currently listed prices on the order book and wishes to fill his trade immediately. If the highest selling price and the lowest buying price is okay for you and you settle a trade, you become a market taker.

In essence, market takers take liquidity out of the pool as contrary to the market makers. But it's not a complete definition prior to crypto as new ways of providing liquidity arises.

Market maker makes the order book and a market taker takes from an order book.

There are more and more tools being brought to help the development and prosperity of Hive Engine based tokens. For those who're not familiar with Hive Engine, it basically a smart contract platform built on top of Hive, also referred to as a second layer solution for anyone that needs smart contracts and wants to utilize the benefits of Hive as a feeless and fast blockchain.

The possibilities are endless.

Consider voting for a proposal.

https://peakd.com/signin?r=%2Fme%2Fproposals

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