What Can We Offer to Market Makers?

June 17, 2024

Market makers often get a bad rap, portrayed as shadowy figures manipulating the markets. However, they play an integral role, not as hidden forces but as fundamental pillars ensuring market liquidity and stability. At CVEX, we recognise the pivotal role of market makers in creating a dynamic and efficient trading environment, which is why we are committed to promoting partnerships with them.

Market makers help bridge the gap between buy and sell orders, ensuring that trades can be executed swiftly, even during periods of significant volatility or when large orders are placed. This is crucial in maintaining an orderly market and preventing price manipulations or extreme fluctuations that could harm the market’s integrity. By providing liquidity, market makers enable other traders to enter and exit positions at competitive prices, enhancing overall market health and trader confidence.

Our Strategy for Market Maker Engagement

Market makers are vital in ensuring sufficient liquidity on trading platforms, which is essential for the execution and pricing of trades, especially in derivatives markets. By continuously buying and selling financial instruments, they help fill the order book and enable smoother transactions, reducing slippage and enhancing the trading experience for all platform participants. That’s why we have prepared an attractive strategy to empower your work, our precious MMs:

Selection of Designated Market Makers (DMMs)

To optimise our trading environment, we collaborate with DMMs, which are selected based on stringent criteria, including financial robustness, trading expertise, and technological capabilities. Our platform accommodates up to four DMMs at any given time to ensure diversity and competitive market-making activities.

Incentives and Support

We understand the need for market makers to have solid incentives. Therefore, 40% of transaction fees collected by CVEX are redistributed to DMMs. This performance-based reward system encourages them to maintain tight spreads and a deep order book. Additionally, we provide DMMs with operational support, such as technical advice and assistance to empower their trading strategies.

Transparent and Stable Operational Framework

Regular assessments ensure that our market makers meet pre-defined liquidity and efficiency criteria. We maintain a stable incentive structure to provide a predictable working environment for DMMs, which is crucial for long-term planning and effective market-making.

Why Market Makers Choose CVEX

Our platform offers a uniquely supportive environment for market makers:

  • Financial Incentives: Attractive fee redistribution and performance-based rewards.
  • Technological Support: Access to advanced trading tools and analytics.
  • Transparency: Clear communication and open access to platform developments.
  • Governance Participation: Involvement in decentralised governance through our DAO, influencing platform operations and future developments.

Our collaboration with market makers remains a top priority as we continue to grow and evolve. We are committed to enhancing our platform's features and stability, supporting robust trading strategies and operations. The collective goal is to build an ecosystem that supports current market needs and adapts to future challenges and opportunities.

We invite market makers looking to impact a leading cryptocurrency trading platform to join us. Together, we will shape the future of decentralised trading, creating a more efficient, transparent, and beneficial market for all participants.

Join Us!

If you want to collaborate with us or learn more about our market maker program, please contact our Chief Product Officer, @jlldavies on Twitter. We look forward to forging strong partnerships that drive mutual success and innovation.

Read a part of our Docs about Market Makers.