The Importance of Market Makers in Crypto
Industry experts have been concerned about the lack of liquidity in crypto markets. Market maker Keyrock argues that genuine market making can offer better price consistency and strengthen token markets. Here are the key points:
- Market makers in traditional stock trading place bids and offers for shares at different levels of an order book.
- Crypto exchanges have multiple roles, including acting as trade counterparties and custodians, which can cause problems.
- Exchanges can engage in wash trading, creating an illusion of high trading volumes for a specific token.
- Keyrock is a crypto market maker that protects traders from volatility by placing multiple bids and asks across an exchange’s order book.
- Relying on multiple liquidity providers and having liquid order books ensure greater price consistency.
Hot Take: Market makers play a crucial role in providing liquidity and maintaining price consistency in the crypto market. Proactive regulation is needed to protect investors and ensure a healthy market environment.
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