How to participate in liquidity provision? Binance Exchange Market Maker Earnings Guide

Binance liquidity providers need to complete KYC certification, access LP API, set market making parameters, monitor performance dashboards and handle abnormal conditions. Specifically, it includes binding the whitelist IP, calling the /sapi/v1/liquidity/provide interface, controlling the price difference ≤ 0.05%, maintaining the top 10% depth, refreshing the quote interval 200ms, canceling the order ≤ 8%, checking the Liquidity Score and Spread indicators daily, and diagnosing abnormalities according to the status code.

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1. Understand the role of liquidity provider

Liquidity providers inject buying and selling depth into the market through placing orders on the Binance Exchange. Their core action is to continuously place limit buy and sell orders. This role does not rely on transactions, but uses the time of pending orders, order thickness and price stability as the basis for income evaluation.

1. Log in to the Binance official website and complete advanced KYC certification to ensure that the account has API permissions and institutional-level access channels.

2. Enter the “Binance Institutional” page and click on the “Liquidity Provider Program” entrance.

3. Sign the electronic agreement and bind the server IP whitelist that has been configured with a low-latency network.

2. Access Binance LP API interface

Binance provides market makers with a dedicated REST/WebSocket API endpoint that supports millisecond order push and order cancellation responses. All requests must carry a valid API key and timestamp signature.

1. Create a new key in the API management background, check the "Trade" and "Margin" permissions, and disable the "Withdraw" permission.

2. Use curl or the Python requests library to send a POST request to /sapi/v1/liquidity/provide , carrying the symbol, side, price, and quantity parameters.

3. Monitor depth@100ms WebSocket stream, calibrate the price deviation of pending orders in real time, and ensure that the price difference is controlled within 0.05%.

3. Set market making strategy parameters

The strategy parameters directly affect the capital rate return ratio and the tiered reward coefficient. Binance dynamically adjusts the rebate levels based on three indicators: Taker proportion, order cancellation rate, and order survival time.

1. Set the basic pending order thickness to the top 10% of the market depth. For example, the BTC/USDT trading pair maintains at least 50 BTC buying orders and 50 BTC selling orders.

2. Enable the "Quote Refresh Interval" function and set the best five quotes to be automatically updated every 200 milliseconds.

3. Configure the "Max Cancellation Rate" threshold to ≤8% to avoid triggering the high-frequency cancellation identification rules in the risk control model.

4. Monitor real-time performance dashboard

The Binance LP backend provides a millisecond-level delay dashboard that displays the current order survival rate, effective pending orders, funding rate return progress, and unsettled income balance.

1. Check Liquidity Score value at UTC 00:00 every day. This score determines the commission rebate multiple for the next day. The full score is 1,000 points.

2. Check whether Effective Bid/Ask Spread is continuously lower than 0.03%. Higher than this value will reduce the Tier level.

3. Check the Unsettled Earnings field to confirm whether the amount to be settled in USDT is consistent with the amount arriving on the chain.

5. Responding to abnormal account status

When the system detects IP fluctuations, signature errors, or order structure abnormalities, the LP account may be temporarily demoted. In this case, the diagnosis process must be performed immediately.

1. Visit https://www.binance.com/en/support/articles/LP-Account-Status to check the current status code and recovery time limit.

2. Download the complete API logs of the last 24 hours and filter request records containing 429 or 401 responses.

3. Submit the timestamped packet capture file and server NTP synchronization screenshot to [email protected] .

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