As we all know, market makers in cryptocurrency market usually refer to market makers. At present, market makers in the cryptocurrency market all deliver payment and sales orders as customers to provide liquidity for the market. So, what is the importance of market makers in cryptocurrencies? Next, let's have a look.

What is the importance of market makers in cryptocurrencies?

The ability of retail investors to engage in market making in the past financial system faces high barriers. On the other hand, the blockchain industry has circumvented these obstacles, making it easier for retail investors to participate. More precisely, individual traders have the same access to the protocols used by digital asset exchanges as organizational traders. This allows them to programmatically submit prices and execute transactions. There are also some digital money markets that provide users with permanent free industry databases.

Traders (those who fill in the market quotation) generally need to pay higher expenses in the exchange. In contrast, the market making fee is generally reduced, or even zero in most cases (for traders who provide quotations).

The emergence of market makers has given trading several advantages. The most important point is that the market maker promotes the liquidity of the transaction, reduces the transaction cost, and allows the parties to the transaction to easily get the property at a fair price. This means that market makers try to narrow the bid ask spread, indicating that the order book is very stable. Stable currency prices and low levels of volatility are the embodiment of a robust order book.

Because of the high volatility of cryptocurrency market, traders may lose money when placing orders on DEX due to falling prices. In addition, the lack of liquidity may make the market more prone to "flash crash", which occurs when a large number of sales orders cancel the best purchase price in the order book, leading to a sharp drop in prices.

The process of cryptocurrency entering the regulated trading market should be "smooth". If the currency is unstable and lacks liquidity, the project party who wants to let users use their native tokens may lose their applicability.

Top 5 Market Makers in Cryptocurrency

1、 GSR Market

GSR Markets is an algorithmic digital trading company belonging to Hong Kong from the source. It uses its own software to implement solutions for several types of data asset category orders, thereby providing liquidity. The enterprise has deployed a variety of transaction models, which are integrated with more than 30 liquidity pools, and its transaction costs are relatively low in the market.

characteristic:

1. First class leadership and a strong team of technical and financial practitioners from first-class financial institutions;

2. An intuitive risk management strategy has been developed for those unable to manage;

3. Its unique transaction technology can be adjusted according to transaction requirements. Its marketing and induction strategies will be adjusted according to the real-time liquidity and volatility, so that investors can really get the best price.

2、 Kairon Labs

To be sure, Kairon Labs is currently the largest market maker in this field. Located in the Netherlands and Belgium, they use their proprietary software to provide market makers for all utility currencies. Kairon has become one of the most professional market makers in the encryption industry. They are famous for their customized enterprise algorithms, and they know the value of building algorithms for each project. Kairon Labs is used as a market maker by some of the best projects.

They have rich experience in building company system architecture and designing transaction algorithm. Their specialty and expertise are utility currency and stability currency. In order to expand their specialty, they use their own software to operate. Their unique solutions tailored for customers are very helpful in reducing the impact of price adjustment. Kairon Labs is completely transparent in its operation and can provide liquidity in many exchanges. At present, they have connected the API of more than 120 exchanges.

Compared with competitors, it has huge advantages in terms of low cost, profit distribution and algorithmic trading services of digital currency, which makes them very attractive to any potential project that should make a market. However, they are very selective and attach great importance to their product reputation.

The team consists of some legendary cryptocurrency traders who helped many famous projects during the bull market of cryptocurrency in 2017.

characteristic:

1. Analyze the advantages of order book and project in detail;

2. They play their role in a very pragmatic and precise way, from testing strategies to obsessive analysis of these, and then deploy market making strategies tailored to each project that best meet their needs;

3. Maintain the 24/7 alarm, and change the trading countermeasures according to the time requirements;

4. Publish the relevant transaction volume, profit and loss and the report of direct communication with the project through WeChat, Telegram and What app every two weeks;

5. Assign a conference call every two weeks to discuss future countermeasures.

3、 Alpha Theta

Alpha Theta is developing very fast. They are committed to the combination of algorithm trading and robots. Alpha Theta is located in Toronto, and its countermeasures are customized according to project requirements. The best part about Alpha Theta is that they are keen to participate in even small projects, build their reputation and grow.

characteristic:

1. Alpha Theta has some of the most talented engineers, who have generated strong algorithms specially designed for the encryption market;

2. Alpha Theta is very special in complying with AML/KYC countermeasures to maintain its business compliance;

3. They have great information transparency, so that investors can timely grasp the market operation;

4. One person can use n robots to implement different strategies in multiple exchanges;

5. A dedicated trading desk operates 24 hours a day.

4、 Almeda Research

Almeda Research was first founded by Sam Bankman Fried and Gary Wang in 2017, and currently manages more than 100 million dollars of assets. They are famous for quantitative trading, and they have made huge profits from it. However, they have recently entered other industries, such as establishing their own OTC trading counters and new exchanges FTX.

characteristic:

1. Based on their excellent research technology, market neutral algorithm and trading advantages of market making partnership.

2. A sound trading system can ensure a close OTC spread.

3. Experienced team members from FB, Google and other giants for decades.

4. Comprehensive global operation, which can be traded on multiple exchanges.

5、 Bluesky

Bluesky is a quantitative investment management company, which has also entered into market making and achieved great success. It assists HNI, institutional investors and large ticket offices in achieving their investment objectives by investing capital in global financial markets. The company currently manages a quantitative plan at a global macro level.

characteristic:

1. The enterprise has a rigorous and unique quantitative research method, and has invested a lot of money in disruptive technologies.

2. Continuous innovation is the mantra here, because the enterprise has been looking for tools, data and new alpha sources.

3. A customized risk management framework can ensure timely supervision of investment related risks.

4. Provide 24/7 liquidity on its corresponding cryptocurrency exchange with API.

Speaking of this, I believe you have a certain understanding of the importance of market makers in cryptocurrencies. In general, market makers are important to traders, project founders and exchanges in the field of encryption. Market makers provide liquidity for exchanges, making it easier to trade in different currencies without having a huge impact on prices.