Trading Rebates

Trading rebates are incentives paid by an exchange to traders who provide liquidity to the market. By placing limit orders that are executed by other traders, liquidity providers help ensure that the exchange has a deep order book.

In some fee structures, the rebate is greater than the trading fee, effectively meaning the trader is paid to trade. This model is common in traditional finance and some crypto exchanges to attract professional market makers.

Rebates encourage high-frequency trading and contribute to tighter spreads, which benefits all users. However, they also raise questions about the fairness of market access, as they favor participants with the technical infrastructure to provide consistent liquidity.