Liquidity providers and market makers play essential roles in financial markets, but they are not the same. Market makers are a specific subset of liquidity providers who are obligated to continuously post buy and sell quotes.
While market makers ensure there is always a market for a security by providing liquidity, other liquidity providers may add orders to the market but are not required to do so consistently.
This distinction is important for traders and investors to understand, as it affects how they interact with the market and the availability of assets for trading.