The job of a market maker is to ensure that there is always a counterparty for buyers and sellers; an MM takes a chaotic marketplace and, for those who need it, presents the illusion that (for instance) you can buy a security the same way you buy a book on Amazon: here's a price, click buy, done.

If you try to think about it, it's hard to get your head around how MMs can provide this service. Ensure a counterparty to buy from, or sell to? The market is constantly moving. From where do they get the superpower of always having stuff to sell, or always being able to buy? How are they not taking a bath doing this?

One reason MMs can exist is because they charge a premium and pay a discounted rate for the securities they charge. The premium you pay an MM when you buy a security offsets the risk that they're getting the fuzzy end of the lollipop, which, if it happened over and over again, would force the MM out of business.

But: it's tricky to charge a premium (or pay a discount) against an estimated fair market value that is constantly changing. Also: the size of the premium/discount (the spread) depends on factors that also constantly change.

For me, knowing these things makes it intuitively obvious why MMs need to constantly submit and cancel new orders. It's like the edits in a simple diff algorithm; cancellations are the "-" lines, order entries are "+" lines, and a "change" in an order requires both.