> ## Documentation Index
> Fetch the complete documentation index at: https://uncoded.ch/docs/llms.txt
> Use this file to discover all available pages before exploring further.

# MarketMaker (Mode 1001) — FDUSD Maker-Rebate Strategy

> Specialty market-making mode for Binance FDUSD pairs. Posts maker-only orders on both sides of the book, profiting from rebates rather than directional moves.

<Info>
  **MarketMaker (Mode 1001) is a specialty market-making mode for Binance's FDUSD-quoted markets.** It posts maker-only orders on both sides of the book, profiting from the maker-rebate fee structure rather than from directional price moves. Only viable on Binance `FDUSD` pairs which have a maker-rebate structure.
</Info>

## The mode at a glance

| Property                   | Value                                      |
| -------------------------- | ------------------------------------------ |
| **Mode number**            | 1001                                       |
| **Quote asset**            | `FDUSD` only                               |
| **Venue**                  | Binance only (FDUSD markets)               |
| **Strategy type**          | Market-making (rebate harvesting)          |
| **Trailing stop**          | N/A (different exit mechanism)             |
| **Recommended capital**    | `$20,000+`                                 |
| **Reserve recommendation** | `~$10,000` (`50%` of trading capital)      |
| **Best regime fit**        | High-volume FDUSD markets in any regime    |
| **Worst regime fit**       | Thin FDUSD markets, very directional moves |

## How market-making works (briefly)

A market-maker simultaneously offers to buy at slightly below market price and sell at slightly above. When other traders cross the spread, the market-maker captures the spread as profit.

On Binance's `FDUSD` pairs, the fee structure pays makers (those whose orders rest on the book) a small **rebate** for adding liquidity. So even ignoring the spread itself, a market-maker can earn from rebates.

The strategy works when:

* You can post both buy and sell orders simultaneously (you have inventory in both assets).
* Your orders rest on the book without being crossed too aggressively.
* The rebate plus captured spread exceeds the inventory risk and any small directional losses.

## Why FDUSD-only

<AccordionGroup>
  <Accordion title="Maker rebates are a Binance FDUSD-specific structure" icon="coins">
    Binance has historically incentivized FDUSD adoption with a maker-rebate fee structure. Makers on FDUSD pairs earn a small rebate (positive yield); makers on regular USDT pairs pay reduced taker fees but earn nothing.

    Running MarketMaker on USDT pairs produces poor economics — the rebate that makes the strategy profitable doesn't exist there.
  </Accordion>

  <Accordion title="Other venues don't have equivalent structures" icon="building-columns">
    No other exchange unCoded supports has an equivalent maker-rebate structure that the mode is calibrated for. Running Mode 1001 on Bybit, OKX, etc. would not produce the same economics.

    **Restrict use**: Binance FDUSD pairs only.
  </Accordion>
</AccordionGroup>

## When to use MarketMaker

<CardGroup cols={2}>
  <Card title="You want non-directional yield" icon="scale-balanced">
    Market-making profits don't depend on which way the market moves. Yield comes from the rebate and spread capture.
  </Card>

  <Card title="You have capital `$20,000+`" icon="vault">
    The mode's calibration. Below this, switch to MarketMakerMinimal (Mode 1002).
  </Card>

  <Card title="You're trading Binance FDUSD pairs" icon="building-columns">
    `BTC/FDUSD`, `ETH/FDUSD`, etc. Not USDT pairs.
  </Card>

  <Card title="You can absorb inventory risk" icon="boxes-stacked">
    Market-making accumulates the asset on dips and offloads on rallies. You'll sometimes hold meaningful inventory in either direction. Tolerate this.
  </Card>
</CardGroup>

## When NOT to use MarketMaker

<Warning>
  * ❌ **Non-FDUSD pairs** — the rebate structure doesn't exist there.
  * ❌ **Non-Binance venues** — no equivalent rebate.
  * ❌ **Capital below `$20,000`** — switch to MarketMakerMinimal.
  * ❌ **Very thin FDUSD markets** — if the order book has insufficient depth, your orders dominate the book and the strategy doesn't work.
  * ❌ **Strong directional moves on the symbol** — extreme directionality means your inventory accumulates against you faster than rebate yield compensates.
  * ❌ **First-month operators** — start with BasicMode. Market-making is a level-2 pattern.
</Warning>

## Best practices

<Tip>
  * ✅ **Binance FDUSD pairs only** — `BTC/FDUSD`, `ETH/FDUSD`, etc.
  * ✅ **Capital `$20,000+`** — below this, use MarketMakerMinimal.
  * ✅ **Watch order book depth daily** — strategy depends on order book having sufficient counterparty volume.
  * ✅ **Hold both assets in inventory** — base and quote. Initial top-up before starting.
  * ✅ **Hold 50% reserve** as alternative-asset buffer.
  * ✅ **Be prepared for inventory excursions** — sometimes you'll hold more BTC than FDUSD, sometimes the reverse.
  * ✅ **Don't run alongside directional modes on the same pair** — conflicting strategies.
  * ✅ **Backtest on FDUSD-specific historical data** — generic backtest results don't translate.
  * ✅ **Treat the kill switch as your most important control** — MM strategies need operator attention during volatility spikes.
</Tip>

## What's next

<CardGroup cols={2}>
  <Card title="MarketMakerMinimal (Mode 1002)" icon="scale-unbalanced" href="/strategies/modes/marketmakerminimal">
    Smaller-capital variant for learning at `~$5,000`.
  </Card>

  <Card title="BasicMode (Mode 4)" icon="seedling" href="/strategies/modes/basicmode">
    Directional mode for non-FDUSD pairs.
  </Card>

  <Card title="Binance Setup" icon="building-columns" href="/exchanges/binance">
    Setup including FDUSD market access.
  </Card>

  <Card title="Risk Management" icon="shield" href="/risk-management/overview">
    Inventory risk in market-making.
  </Card>
</CardGroup>