June 6, 2022 vladimir

What is a market making bot and how does it operate?

Market making is a popular service used by cryptocurrency exchanges, coins, and tokens. In essence, market making helps markets to stay liquid. Market Making is creating a lot of volume by trading between the spread of the buyers and the sellers of a market. This trading usually happens extremely fast.

What is a market making bot and how does it operate?


A market making bot is an automated investment strategy that is used to provide liquidity, by filling up the order book with buy and sell orders, so that other market participants, buyers and sellers alike, can execute their orders whenever they need to. Such bots are usually run by a market maker or done in-house by financial and programming professionals. 


The market making industry has remained mostly centralized while decentralized finance has been growing extensively. Due to the value proposition offered by market makers and their AI-based market market bots, the price of this type of services may end up being very expensive even for well-established blockchain firms and cryptocurrency startup companies. Avatea taps into this new industry and expects all DeFi projects to move to fully decentralized market making protocols.


Why Decentralized Market Making Protocols Are the Future of Market Makers?

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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