We have recently launched maker limit orders on Drift! Maker orders are a new frontier on our unique orderbook-AMM design. Maker orders provide adjacent liquidity to our DAMM, meaning that we can concentrate even more liquidity around the current oracle price. To successfully execute maker orders on Drift, we’d like to work with trading firms to run quoting operations on Drift to provide additional liquidity to Drift’s exchange.

Why Run Liquidity Provision Strategies on Drift?

• Maker orders are zero fees, compared to taker fees which are a flat 10bps.
• Maker strategies are highly capital efficient on Drift compared to on centralised exchanges.
  • 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.
• Rebates: We will be launching an early rewards/rebate program for high volume traders in May. The rebate will be up to 5bps of the maker order.
• We will set you up with dedicated quant and BD support to onboard your firm to trade maker strategies on Drift.
• Easy setup: Setting up a bot to trade on Drift is simple.
  • We have a Typescript SDK and Python SDK, along with made-to-run examples to get started and build more complex strategies on top of.

How they work

1. A liquidity provider provides post-only quotes away from the current price. For instance, the current mark price is $100, and an LP provides a maker bid at $98 and an ask at $102.
   1. These orders will only execute if it is a post-only order, i.e. if it adds liquidity for takers rather than takes available liquidity from the DAMM.
   2. The liquidity is held in an adjacent pool to the DAMM which will fill if there’s demand from takers.
   3. No collateral is needed to post up post-only orders. Because keeper logic is held off-chain, collateral is only checked and locked in when the order is filled. This makes the strategy extremely capital-efficient.
2. Keepers can match taker orders with maker orders once orders are filled.
3. As price moves, LPs cancel and re-quote their bids and asks at a band around the current price. Within a single transaction, a LP can programmatically cancel all orders and provide two bids and two asks from current price.
4. LPs earn the spread between their bids and asks.

Example code MMs can run

We’ve written an example bot using maker orders. Trading firms can use this as a base to write more complex market making strategies on top of.

example-bots/maker-orders.ts at bigz/maker-orders · drift-labs/example-bots