Hiring the service of a professional market maker can bring a healthy trading environment to your tokenized project.
There are several benefits of having a professional, third-party market maker by your side.
- Liquidity attracts liquidity. By reducing spreads and volatility and increasing order book depth, the actions of the market makers are capable of attracting more organic buyers. When the trading environment is healthy, investors are more willing to buy in and this will bring even more organic volume to the order book, creating superior liquidity for market takers. That means that projects usually do not need a market maker forever, just until volume is good enough to sustain itself.
- More and more quality organic investors. New and higher quality investors are attracted to your token because of the increased liquidity. A liquid market can attract a more diverse trading community that includes institutional investors. That means higher volumes which gives more confidence in the token’s community.
- Increase token prices. Higher volume and investor confidence tend to drive the token price up, since there are more investors willing to buy and hold the token, knowing that, if needed, they will be able to sell their position quickly.
- Better negotiation with exchanges. By having a market maker by your side, exchanges will have better assurances through the listing process. Having a market maker is an insurance that your token will be liquid on their platform and they will be more likely to charge you a more competitive fee. In addition to this, once your tokenized project exhibits a liquid market in one exchange, it is considerably easier to negotiate more favorable terms with additional exchanges, growing the community even further.
Liquidity is an extremely important variable in the crypto market equation, enabling your token to produce the best possible result, but it rarely comes by itself. To create liquidity you need a professional market maker to support you, one that has the tools required to satisfy your demands. Keeping prices within certain levels, populating the books in specific ranges, helping you design a trading strategy for your token: those are among the things a market maker should be able to provide you.