# Market Maker

> A participant who quotes both buy and sell prices, providing liquidity in exchange for a small spread.

Canonical URL: https://fudfomo.co/glossary/market-maker
Source: What The Block! Dictionary v1.0 (last updated 2026-04-25), browsable at https://wtb.fudfomo.co.

## Definition

A market maker is a trader, firm, or smart contract that continuously quotes a price to both buy and sell. Their job is to keep liquidity available so other people can always trade.

In return they earn the bid-ask spread and sometimes incentive payments from the venue. On centralised exchanges, market makers are usually professional trading firms. On DEXes, the role is played by liquidity pools and the people who fund them.

## Related terms

- [Bid-Ask Spread](https://fudfomo.co/glossary/bid-ask-spread): The gap between the highest price buyers will pay and the lowest price sellers will accept.
- [Order Book](https://fudfomo.co/glossary/order-book): A live list of buy and sell orders at different prices on an exchange.
- [Liquidity Pool](https://fudfomo.co/glossary/liquidity-pool): A shared pot of two tokens that lets people trade between them on a decentralised exchange.
- [AMM](https://fudfomo.co/glossary/amm): Automated market maker. The smart contract behind a DEX that prices trades based on the size of two token pools.

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