In traditional order book exchanges, such as centralized cryptocurrency exchanges, there are often two types of fees: maker fees and taker fees. These fees are charged to users based on their role in the trading process. The fee structure incentivizes users to act as makers and provide liquidity to the market. By offering lower fees for makers, exchanges encourage users to place limit orders, add depth to the order book and make liquidity providing position. This, in turn, improves market efficiency and reduces slippage for traders.

In general, distinguishing between makers and takers is typically straightforward because trades in the order book are executed sequentially. The order book operates in a way that when a trade takes place, it indicates that a newly submitted order has been matched with existing orders already present in the order book. Consequently, we can consider the maker order as one that was already in the order book, while the taker order represents a newly submitted order that resulted in a trade.

However, in the case of Crescent DEX, a large number of orders are processed during the batch matching process, which erases the time priority of the orders, making it difficult to simply apply traditional methods. To solve this problem, Crescent determines the maker and taker in the following way:

  1. In the batch matching process, maker orders are orders that resist price movement and taker orders are orders that create price movement. In other words, if the price is rising after matching, sell orders become makers and buy orders become takers, and vice versa.

  2. In the sequential matching process, the distinction is the same as usual: orders that were already in the order book are maker orders, and newly submitted orders that are matched are taker orders.

  3. Orders submitted by liquidity pools are also classified as maker or taker based on the above criteria, but orders in the pool are not charged a fee even if they are classified as taker. (Taker orders in the pool are set to 0% fee rate)

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