Market making is an activity whereby a trader simultaneously provides liquidity to both buyers and sellers in a financial market. Liquidity is the degree to which an asset can be quickly bought or sold without notably affecting the stability of its price. Market maker “make a market” by quoting prices to both buy and sell an asset. In this way, the market maker (or liquidity provider) acts as both a buyer and seller of last resort where there would not naturally be another buyer or seller, thereby providing liquidity.

With the increasing acceptance of cryptocurrencies as viable and safe financial assets, and the rapidly growing number of crypto exchanges around the world, market making in crypto space has become increasingly common, yet still largely unexplored. Market maker play an important role in increasing the accessibility and liquidity of cryptocurrencies to traders, investors and market participants around the world. Market making is an activity whereby a trader simultaneously provides liquidity to both buyers and sellers in a financial market. Liquidity is the degree to which an asset can be quickly bought or sold without notably affecting the stability of its price. In this post, we’ll elaborate on the benefits of crypto market making, explain what cryptocurrency market making is, and provide a basic guide on how to leverage the service.

We review market making basics, liquidity provisioning on centralized and decentralized exchanges, and ponder what the future of Market Maker may hold in this week’s chart of the Week.

In the crypto market, liquidity is a key factor that ensures the sustainability of various assets. Therefore, in the crypto market, besides the two parties of buyers and sellers, there is a third party that helps maintain crypto market liquidity, which is the Market Maker. So, what is a Market Maker? Let's explore this topic together with AquaFox in the article below.