June 6, 2022 vladimir

Why there is a growing need for market making services in 2022

Market making is a popular instrument used by companies in a wide variety of financial markets. In essence, when someone wants to buy or sell an asset, they need to make their way to an exchange where buyers and sellers meet.

An asset or a market can be considered as illiquid if there is a limited number of buyers and sellers which doesn’t allow a person or an entity to easily buy or sell the asset.

In order to guarantee an asset or a market liquidity, exchanges hire market makers to provide a bid-ask spread to the market.

Market making core functions are to execute highly automated trading strategies and provide markets with liquidity and depth. In order to remain competitive and contribute to systematic financial markets, market making firms need to progressively invest in both technology and human capital.

Market Makers and its applications in the DeFi space

Short for decentralized finance, DeFi is referred to as financial applications built on blockchain technologies, typically using smart contracts. The DeFi space has seen an immense inflow of money into the market. The DeFi industry has soared with 4000% since June 2020 to an 80$+ billion-dollar industry nowadays.

Wall Street and big institutional investors have been joining the DeFi space. All market players are trying to automate their trades and returns on investment, gaining a competitive advantage on one another. There has been a growing need and interest for services like algorithmic market making which is what Avatea’s Decentralized Application is all about.

Avatea — The Decentralized Market Making Service Provider at Glance

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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