What role do market makers play in trading markets? This question may seem simple, but it actually involves the underlying logic of overall market liquidity.

The core function of market makers is not mysterious—they maintain market continuity and depth by continuously quoting prices and providing bid-ask spreads. In other words, when you want to execute a trade immediately, the market maker is the counterparty willing to take the other side instantly. They earn the bid-ask spread and also bear inventory risk.

In cryptocurrency exchanges, the role of market makers is especially critical. They ensure liquidity for trading pairs, reduce slippage losses for regular traders, and enable large orders to be executed more smoothly. Without sufficient market makers, the market would become rigid, and the bid-ask spread would widen significantly, which is bad news for all trading participants.

From an exchange's perspective, market makers are an important dimension of market quality. A healthy trading ecosystem requires the participation of market makers, liquidity providers, and regular traders.