Bitcoin exchange Kraken recently announced that they will be reducing transaction fees incurred in trades, as they are moving towards a “maker taker” fee model. This means that market makers will be able to provide the liquidity to “takers” or traders.

The company shared its revised fees in its latest blog post and said that this new model will reward market makers for providing liquidity to the bitcoin exchange market. The maker fee applies when a user adds liquidity to the Kraken order book by placing a limit buy below market price or a limit sell above market price. The maker fee is paid only when such orders are taken by new incoming orders.

Bitcoin Exchange Fees

Meanwhile, the taker fee applies when a user removes liquidity from the bitcoin exchange order book by placing a market or limit order that executes immediately against a limit order already on the book. All advanced orders on their exchange platform trigger either market or limit orders and the triggered market or limit order will be maker or taker.

With that, market makers will have more incentives to provide liquidity, as this could entitle them to bigger savings on their transactions costs. Takers could still benefit from this model which could be offset by deeper liquidity and potentially tighter spreads.

In particular, the new fees are: For the bitcoin-fiat pairs, the maker fee goes as low as 0% and up to 0.16% depending on the amount traded. The taker fee goes as low as 0.10% and up to 0.26% depending on the amount traded.

According to the bitcoin exchange, these updated fees and revised market model comes by popular demand since most of their clients requested for an overall reduction in transactions costs. The revised fee structure will take effect on August 1, 2015.