Binance Will Soon Reward Market Makers for Providing Futures Liquidity

The exchange is adjusting its fee structure to incentivize market makers to add liquidity on its futures platform.

AccessTimeIconFeb 4, 2020 at 2:59 p.m. UTC
Updated Sep 13, 2021 at 12:14 p.m. UTC

Cryptocurrency exchange Binance is adjusting its fee structure to get market makers to add liquidity on its futures platform.

Under the revised Binance Futures Market Maker Program, market makers will receive a negative fee for selected trading pairs, according to an official announcement on Monday. A “market maker” is a user who adds liquidity, or buying and selling limit orders in which the limit price is below/above the current market price, by placing a trade in the order book. A “market taker” is the one who takes liquidity off the market by filling a trade already placed. 

Exchanges generally try to enhance liquidity on their platforms by offering makers lower fees compared to those offered to takers while filling an order. Binance, however, has upped the ante by announcing what's effectively a reward for placing market-making trades on "select" pairs. 

Binance hasn’t yet disclosed details relating to the negative fee structure. To join the program, market makers must have 30-day trading volumes in excess of 1,000 BTC on Binance, and have "quality market maker strategies," the post says. The exchange will also accept proposals with evidence of similar trading volumes on other platforms. 

A weekly performance review will be imposed, based on metrics like market volumes, market-making time, bid/offer spread, total order size and order duration. 

Binance's strategy shift comes as the crypto derivatives space is heating up. Regulated firms including the Chicago Mercantile Exchange (CME) and Intercontinental Exchange's Bakkt recently started offering bitcoin options after they had offered futures contracts. 

Binance futures went live in September 2019, with the firm's figures suggesting they've seen solid growth. 

In January, Binance futures volume witnessed an 85 percent month-on-month increase, with $56 billion traded across its perpetual contract markets. Further, open interest increased 98 percent from $137 million to $271 million as of Jan. 31. Bitcoin (BTC)/tether (USDT) perpetuals remained the most invested contract, comprising 75 percent of its total open interest, according to Binance Research. 

Perpetuals are no-expiry contracts that mimic a margin-based spot market and trade close to the underlying reference price.

In December, BitMEX and Binance accounted for the majority of the BTC perpetual futures market volume at $1.7 billion (40 percent) and $947 million (22.5 percent) per day, respectively, on average.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.