Crypto Market Making: Roles and Types
By - Your Salary in Singapore  •  April 9, 2024
Market making in cryptocurrency refers to the practice of providing liquidity to the market by continuously buying and selling cryptocurrencies at publicly quoted prices. Market makers are crucial in ensuring enough trading volume on an exchange for trades to occur without significant price changes. Benefits of Market-Making Service Operating on centralized crypto exchanges, market makers participate in a market making program, where they get fee discounts and rebates for their activity.  Market makers continuously submit buying and selling orders at specified prices. It creates a two-sided market, ensuring that traders can execute transactions promptly without waiting for a matching order from another party. Makers allocate significant capital to cover the range of buy and sell orders, enabling them to fulfill large volumes of trade requests and contributing to the market’s depth. The difference between the buy (bid) and sell (ask) prices, known as the spread, is where market makers earn their profits. By setting these prices...
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