The Role of Crypto Market Maker in a Crypto Exchange

Liquidity is paramount to a cryptocurrency exchange (or a crypto trading platform). Without liquidity, the crypto exchange is just software that is not seen as an attractive platform for trading.

The driving force behind liquidity in any crypto exchange is a crypto market maker.

What is a crypto market maker?

For a crypto exchange to appear as an appealing trading platform, it should be able to fulfill buy and sell orders quickly. To achieve this, the exchange should have sufficient supply and demand for the crypto asset in question, thus the need for high liquidity.

High liquidity is regarded with favorable market conditions and reduced risk. Crypto market makers provide bid prices and offer prices for trading pairs and serve as a buyer or a seller for a specific transaction when there is no suitable counterparty to fulfill the order.

Given the crucial role of a market maker, it has become an important asset of a crypto exchange. Many crypto market making companies are delivering powerful market makers to help crypto exchange owners fortify their platforms with high liquidity.

What is the need for a crypto market maker?

A crypto exchange provides an infrastructure for traders to buy and sell their desired assets. A crypto market maker provides liquidity to exchanges and ensures adequate liquidity in the order books. To put simply, crypto market making software serves as an intermediary or broker between supply and demand for securities.

It enables traders to liquidate their positions quickly and easily.

Let us assume that a user wants to sell a crypto asset on an exchange with originally low liquidity. With crypto market making software integrated into the exchange, the platform can achieve high liquidity and the user can quickly sell their crypto asset on the same exchange. Another need for a crypto market maker is ensuring price continuity on a market with a narrow bid-ask spread. A market with strong price continuity is considered reliable by crypto traders.

How does a market maker make money: What could this mean to you as an exchange owner?

A market maker takes a small profit in the amount equal to the bid-ask spread with each trade.
Let us take an example for better understanding.

A crypto exchange has:
A buy order for 1000 assets at $1 per asset.
A sell order for 1000 assets at $1.02 per asset.
The spread (difference between buy and sell price) is $0.02 per asset.

Thus, the total profit made by the exchange by trading 1000 units is $20.

It means that if you integrate a crypto market maker into your crypto exchange, you can earn from the trades carried out on your platform.

Thus, fortifying your crypto exchange with a crypto market maker can empower you to:

However, make sure that you have the right market making strategy in place and partner with one of the best crypto market maker companies to get premium market making software for your crypto exchange.

Why should you partner with Antier to build your market making software?

Antier is a leading blockchain technology company equipped with a team of 500+ finance and blockchain experts. We devise an intelligent market making strategy for your business and then navigate toward the development process so that you get value from your investment.

Whether you partner with us to build a crypto exchange underpinned by a market maker or want to leverage our expertise to integrate the market making module into your existing exchange platform, you can ensure:

We have real-world experience creating success stories for our clients from different industries. Harness our potential to craft your success story next.

Capitalize on our market making services to disrupt the crypto market with a great product. Talk to our subject matter experts to share your business needs.