Announcing Maker Orders on Drift Protocol

Actively provide liquidity on Drift and get paid for it!

Maker Orders are now live on Drift!

Two months ago, Drift Protocol launched Limit Orders and heralded the first hybrid AMM-orderbook design with a novel decentralised limit orderbook (DLOB) in DeFi.

Today, we announce the launch of Maker Orders. Maker Orders allow users to actively provide liquidity to the exchange — enabling them to earn exchange spreads and limited time rebates. With this new feature, our DAMM-DLOB design has been elevated from one source of exclusive liquidity (internally from the DAMM) to multiple sources of liquidity (any user that’s willing to provide liquidity and be a Market Maker).

We’re launching a limited time Rebate Program to: (1) celebrate Maker Orders on Drift; and (2) to incentivise liquidity provision. See how you can provide liquidity and be paid to do so in the Rebates section below.

What are Maker Orders?

Maker Orders make liquidity available in the orderbook by adding latent orders that can be filled by anybody.

Maker Orders are “post-only” limit orders that sit in the orderbook. They add to the liquidity available for taking.

For instance — in a regular orderbook, if a maker posts a maker order at $99 (mark price at $100); then, a taker can come in and take the existing liquidity provided by the maker at $99.

Hence, liquidity has been made available at that price by the maker.

What are Taker Orders?

Taker Orders are orders that take liquidity away from the orderbook.

In Drift’s case, the available liquidity is comprised of the DAMM and Maker Orders put up by users. Taker Orders fill against this available liquidity. The liquidity is extracted from the orderbook once the order is executed.

Why Maker Orders?

Maker Orders have many benefits including: (1) market making strategies; (2) reduced fees; and (3) fee rebates*.

*Promotional rates for Maker Rebates is available for a limited time. Read here for more information.

Market Making Strategies

Maker Orders enable users to run traditional orderbook maker strategies on Drift, except with higher capital efficiency than other CEXs. This is due to our unique DLOB construction where no collateral is needed to post an order. The order will only fill if collateral is available, but you can ladder orders easily with no collateral.

Read more about market making strategies (along with example code) that you can run here.

Fees

Currently, Maker Orders have zero fees compared to Taker Orders, which charge a flat 10bps.

This is to reward market makers for their liquidity provision.

Rebates

To celebrate this release — Drift is launching a limited time Maker Order Rebate Campaign.

From 3 May 2022 to 31 June 2022, all users that post a Maker Order will be eligible for a trade rebate of up to 5bps.

The fees for Maker Orders and Taker Orders effectively become:

How do I place Maker Order?

A Maker Order is a limit order placed with a “post-only” flag that’s quoted away from the current mark price of the asset.

The “post-only” flag ensures that the limit order only succeeds if it adds liquidity to the orderbook and fails if it executes against the DAMM (which would take away liquidity).

For example, the current mark price for FTT is $30.67; a user can add liquidity by placing a Maker Order (limit order + post-only flag):

  • bidding at any price ≥ $30.67; and/or
  • asking at any price ≤ $30.67.

Resources

If you run trading bots and would like to run maker strategies, feel free to reach out to the team on Drift’s Discord (#trading or #dev-chat).

Maker Strategies Deep Dive:

Maker Strategies on Drift with SDK Links and Sample Code:

Example code for maker strategy:

Rebate calculation:

Get in touch!

Stay in touch with us as we journey towards becoming the #1 decentralised futures exchange across all chains!

🌐 Visit us at drift.trade 🌐

📩 Email us at hello@drift.trade 📩

💬 Connect with us on Discord 💬

👾 Find us on Twitter — @DriftProtocol 👾

🧵 Check out Drift Education on Substack 🧵

📺 Watch Drift Education on Youtube 📺

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Drift Protocol

Drift Protocol

A scalable, decentralised, capital-efficient derivatives exchange built on Solana.

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