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Market makers are entities or individuals who provide liquidity to cryptocurrency exchanges by continuously offering buy and sell orders for specific assets, typically at different price levels. They profit from the spread between the bid and ask prices. By ensuring there are always buy and sell orders, market makers enhance liquidity, allowing traders to execute orders more easily without significant price fluctuations. This helps to reduce slippage and price volatility, contributing to a more stable market environment. In the absence of market makers, exchanges could experience wider price spreads, lower liquidity, and higher volatility, which would negatively impact traders and the overall market efficiency.
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