Docs / Market Makers

Market Makers

Behind every liquid market is a market maker — a participant who stands ready to buy and sell at publicly quoted prices. This page explains the role market makers play on Polis Exchange, how our automated market makers operate, and how you can build your own.

What market makers do

A market maker posts limit orders on both sides of the order book — a bid (buy order) below the mid-price and an ask (sell order) above it. The gap between the best bid and the best ask is the spread. By continuously quoting both sides, market makers provide three things a healthy market needs:

  • Liquidity. There is almost always a resting order you can trade against, so you can enter or exit a position without waiting for a counterparty to appear.
  • Tight spreads. Competition among market makers narrows the bid-ask gap, which lowers your implicit cost of trading.
  • Continuous price discovery. As market makers adjust their quotes in response to news and order flow, prices stay close to fair value at all times.

Without market makers, an order book can go empty between trades — spreads widen, fills slip, and trading feels broken. Market makers are the reason a market looks alive.

How our market makers work

Polis Exchange runs a fleet of automated market-making bots that keep every market liquid around the clock. Each bot:

  • Places resting limit orders on both sides of the book — buy orders below mid and sell orders above — at a tight, jittered spread.
  • Replenishes the book after its orders are filled, re-quoting fresh levels so depth is maintained trade after trade.
  • Manages collateral automatically — cancelling stale orders periodically to free up capital for new quotes.
  • Operates 24/7, across all listed markets, so the book has depth whenever you choose to trade.

You can see the result on any market page — a populated order book with multiple price levels on each side and a narrow spread between the best bid and ask.

Benefits to traders

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Tighter spreads

Competitive quoting narrows the bid-ask gap, so you pay less to cross the book.

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Faster fills

Resting orders mean your marketable order is filled instantly, with no waiting for a counterparty.

◎

Price discovery

Quotes that track fair value keep the displayed price honest and responsive to new information.

depth

Book depth

Multiple price levels on each side let you size up or down without moving the price against yourself.

How market makers are incentivized

On most exchanges, market makers earn a maker rebate — a small payment or fee discount for providing resting liquidity that gets filled. Traders who remove liquidity by crossing the spread (takers) pay a slightly higher fee. This maker-taker model rewards the participants who keep the book deep and spreads tight.

Current fee schedule. Makers pay 0% — resting limit orders that add liquidity are free. Takers pay 0.05% (5 basis points) on the notional value when crossing the book. Our market-making bots therefore operate at zero cost, while traders who take liquidity pay a small fee that funds exchange operations.
Maker Fee
0.00%
Limit & post-only orders
Taker Fee
0.05%
Market & crossing orders

Build your own bot

Polis Exchange exposes a full REST API, so you can write your own trading bot — whether that is a market maker, a momentum strategy, or an arbitrageur. Every action available in the web UI is available programmatically.

Key endpoints:

POST /v1/auth/login # obtain a JWT POST /v1/trading/orders # place an order GET /v1/trading/orders # list open orders DELETE /v1/trading/orders/:id # cancel an order GET /v1/tokens/balances # view token balances GET /v1/markets/:ticker/book # read the order book WS /v1/ws?userId={userId} # live trades & book updates

For unattended bots, authenticate with an API key instead of a session JWT. Create one in Settings, then pass it as a Authorization header on every request. A reference market-making bot is included in the project at scripts/bot-trader.py.

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