Crypto market makers play an important role in ensuring a thriving crypto marketplace. They maintain order books that offer deep liquidity, tight spreads, and stable pricing. By taking orders from market makers, exchanges are able to attract more investors and generate more profit. Zerocap creates order books with high volume and stable pricing to help improve exchange performance. Market makers are essential for the success of cryptocurrency exchanges. Read on to learn more about their role in the crypto space.
Price manipulation is a serious crime in any regulated space. It can erode confidence in a traded asset and cost good actors their money. In crypto, the price manipulation tactics of pump-and-dump teams often result in price increases that are larger than the actual value of the traded asset. Such an approach may also result in the price of a token falling after the market maker has finished his or her engagement, which damages its reputation and relationships with exchanges and investors.
Providing liquidity is a continuous process, and it must be done with precision and stability. A good crypto market making bot should also be able to adapt to constantly changing conditions, as well as evolving exchange APIs. While most crypto trading bots are capable of handling lower-risk, high-volume trading, and execution strategies, there are some challenges inherent to the role of market makers in crypto exchanges. Luckily, there are a few solutions to help token issuers with the process. One such solution is Flovtec. The company is a market maker for Bitcoin, Ethereum, and Litecoin. The platform helps a token issuer achieve a healthy market with tight spreads and deep order books.
In contrast, AMMs help a DEX achieve its goal of liquid trading by pooling two crypto-assets. Their liquidity pool determines the price of a trade. This lower price is referred to as slippage, and is akin to price fluctuation during broker execution. AMMs are a critical component of decentralized exchanges. The services offered by these companies are vital to the functioning of the crypto market.