Liquidity on Tap: How Market Making Could Benefit Your Blockchain Project
As an entrepreneur, you’ve been diligent, and you’ve persevered. You’ve poured your vision and passion into the whitepaper, spent countless hours on product development, and have already achieved what a little while ago seemed like a distant dream for your Blockchain Start-up — you’ve listed your Token on a Crypto Exchange.
But if your native token is still relatively new and not particularly famous, chances are it doesn’t change hands very often. “So what?” you may ask. “That’s not a big deal, right?
Well… wrong. You may not be aware of it, but the lack of trading volume invites a myriad of serious problems that could hinder the long-term success of your Blockchain venture.
Issues from Lack of Trading Volume
- Large spreads deter traders from buying and selling, as the difference in ask and bid price essentially constitutes a hidden fee.
- Institutional investors are particularly worried about placing large orders, as they frequently result in unwanted volatility spikes.
- Various external entities (e.g. trading bots) exploit under-traded coins, taking advantage of large differences in price between exchanges.
Solution — Market Making Services!
- Market makers tighten bid/ask spreads around the spot price, slashing the cost end-user pays.
- Market makers provide liquidity and renew order books during high-volume trading periods.
- Market makers scrutinise order books and ping placed orders to understand the market mechanics and analyse the activities of external entities.
How does Market Making work?
Market maker (MM) creates liquidity in the crypto market by submitting both bid and ask limit orders — in other words, buying and selling high volumes of tokens to maintain a healthy spread. The ultimate objective of market making is to build trust between all market participants. Market-making strategies focus on building consistent books with ample liquidity and efficient spreads, reducing overall asset volatility, and ensuring that traders trust the market.
Other benefits of Market Making services:
Increased Market Efficiency
Market-making services greatly increase token liquidity, facilitating the smooth execution of large orders, without price disruption. The higher volume achieved through market making will also help you build a solid reputation, and shore up the price of your token.
Increased Buyer Confidence
Professional investors are risk-averse, and large spread is a sign of an untrustworthy investment. Market-Making services will help you reduce asset price volatility and attract both retail and institutional investors.
Increased Project Traction
Tokens that attract new retail and institutional investors quickly grow in popularity, attracting new loyal supporters. Market Making will help your blockchain project stand out and will drive your brand value. Liquid tokens also receive more attention from exchanges for cross-listing.
We employ professional risk management strategies and self-adaptive algorithmic technologies to ensure tight spreads, high trade volumes, and ample token liquidity. If you believe your token too could benefit, visit ExMarkets.com/MarketMaking
Trade. Master. Profit.