💰 Market Maker in Crypto Space. Introduction

Greetings, fellows!


We are introducing a new article series about marketing making (MM) in cryptocurrency exchange. In these articles we will be focusing on the main MM strategies, current market trends and how to trade in this sphere.


Firstly, it is very important not to get confused with the “market maker” meaning in the cryptocurrency sphere with the same term in classical markets. The only thing they have in common is that MM creates liquidity and it balances the market, and nothing else. In the classic MM, there is an agent who has to keep open the bid and ask orders with a particular (short) spread (between them), which is creating the exchange tool’s liquidity.

• Who is usually a market maker in a cryptocurrency exchange market?
Well, usually it's a small team, internal department, or maybe attracted specialists from the private companies. The team always includes a minimum one programmer and few traders (trading robot operators).

• What is MM’s main goal?
MM’s main goal is mercantile, all he wants is just to make money on an exchange tool manipulated by the agent himself. This goal is achieved by coin/token distribution into specific/perspective moments between the team members. For example, MM is forming an attractive graphic pattern while the market is growing to attract more potential customers. MM’s final goal is to choose the maximal amount of money or/and stronger cryptocurrency (BTC, USDT, ETH) they are planning to exchange into controllable “wrappers”

Note: not every cryptocurrency project has trading and programmer teams that are ensuring the liquidity of their tokens or coins on the exchange market. Graphs below show the two typical examples, first one contains MM and the other doesn't. First graph clearly shows that trading bots have an impact on the tool’s price, spread and direction.

We have a successful personal experience in this sphere. We were taking part in trading bots development and adjustment of trading bots on multiple exchange markets. Our plan is to have comments under each technical paragraph, where we explain and give real life examples.
Next, we are going to analyze in detail the strategies and methods used to carry out this task, if we see that you are interested in such an article.