June 6, 2022 vladimir

How Avatea Disrupts the Market Making industry?

Market makers have been around for a long time supporting financial markets with liquidity, depth, and tight spreads. With the growth of the cryptocurrency space automated market making services have been flourishing.

So what exactly do market makers do and how does it apply on cryptocurrency exchanges?

Based on a recent article written by CNBC, AMM’s(automated market makers) do the following:

“Automated market makers are a part of decentralized exchanges (DEXs) that were introduced to remove any intermediaries in the trading of crypto assets. You can think of AMM as a computer programme that automates the process of providing liquidity. These protocols are built using smart contracts — a computer code that executes itself — to mathematically define the price of the crypto tokens and provide liquidity.”

The need for automated market making is growing exponentially. Currently, there are over 18,700+ cryptocurrencies and markets which are tracked by Coinmarketcap. Coinmarketcap is the leading global price index for cryptocurrency tokens and coins. Every cryptocurrency project wants to secure funds not only to support the development of their project, protocol, blockchain, but also to hire a market maker that could supply enough liquidity and depth on cryptocurrency exchanges in order to make their token or a coin liquid enough. Being liquid enough and having a small spread on the market order books allows traders to get in and out from a trade whenever they want to.

Market Makers

Having the above in mind, market makers are forced to keep up to date with the latest technologies and invest heavily in human capital in order to scale and provide better and more effective services to their customers. But what if automated market making becomes fully decentralized?

A full decentralization gives more options to cryptocurrency exchanges and startups to find the best possible solution on the market which can suit their short- and long-term market making needs. Proper decentralized automated market making services are rare and companies have no choice but to use centralized-based market makers. However, 2022 is a very special year where this fact has changed! Avatea aims to disrupt the global market making services space by offering completely decentralized market making solutions on the go!

So what is Avatea and what is Avatea all about?

The Avatea Protocol is designed to enable a decentralized multi-chain algorithmic market making and vesting protocol that provides immense utilities to projects and individuals. The Avatea Protocol can be seen as a token management system, assisting early stage as well as later staged crypto projects.

One of the most important goals of Avatea, is to decentralize market making processes and to offer community governance possibilities to projects. These governance possibilities are aimed at community governed market making strategies and structure. As well as sustainable trading, governing the amount of tokens that are sold or bought by a project, and the liquidity providing details. Avatea thus enables projects to create transparent and community governed activities, from activities that have always remained very centralized. This will create a new decentralized layer to crypto projects and will further improve the trust and transparency of crypto projects.

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