Let’s assume you are planning to launch a new blockchain-based project. Then, what would be your checklist for the mandatory first steps?
- Your absolutely unique or revolutionary idea – Check ✅
- Thorough market research with a detailed roadmap – Check ✅
- Well-designed whitepaper – Check ✅
- You have found the venture capital willing to be part of the project – Check ✅
- You have made early arrangements with the crypto exchange to list your token – Check ✅
We’ve got everything ready, and it’s launch time! But wait a minute! Imagine that your token was listed, but with practically no trading volume, wider buy-sell price gap and price instability on different exchanges. It is clear that such a project has decent liquidity problems.
Over the past few years, many well-promoted ICOs have suffered from a noticeable lack of further liquidity on their assets. Such difficulties will still remain until the cryptocurrency community recognizes the essential role of specialised institutions in providing this kind of work. These institutions are crypto market makers, futures market making (FMM) companies and liquidity providers. They work at the backstage of any exchange to ensure liquidity of digital assets, reduce the chaotic volatility and drive their growth over the long term.
What Is a Futures Market Making Firm?
A FMM firm is often an important player with the large amounts of capital who provides the necessary market liquidity. This ensures that the price of an asset remains almost unchanged whenever it is bought or sold.
Moreover, by providing liquidity to token projects, FMM firm sparks more interest of new investors and traders, contributing to a dynamic order flow in the order book, small spreads and more active trading sessions on such assets. All these factors show investors that everything works correctly on this exchange, laying a solid foundation for long-term cooperation.
Why Do Startups Need a Futures Market Making Partner?
Imagine a situation where the daily trading volume of your favourite token is less than a few thousand dollars on a specific exchange. Moreover, the same token is traded on five different exchanges, but unfortunately at different prices.
Will this add credibility to the project and encourage further interest in trading this token?
FMM companies create a healthy liquid ecosystem for various projects to facilitate their successful growth. Of course, some may call them market manipulators, but this is really nothing more than a stereotype. These firms keep everyone on an equal footing and prevent speculative price fluctuations.
One of the very common mistakes of crypto start-ups is hiring a market maker from the traditional currency sector. There are known cases where teams have signed long-term contracts with traditional market makers and instead of liquidity, they received a serious loss of money and the community’s trust. Unlike FMM companies, traditional market makers focus only on maintaining tight spreads but not on generating trading volumes.
When the Project Should Partner with a Market Maker?
The most favourable scenario is to contract with a liquidity provider at the tokenomics stage. The reason for this is that founders are often more focused on product development, functionality and value proposition than future product strategy and sustainability. When they finally get in touch with FMM firms, it turns out that their vision does not really fit to the market realities and the strategy has to be changed immediately.
This is why the market making consulting should be done at the earliest stages of a project, when it is still possible to change the tokenomics without any obstacles.
How to Choose the Right Futures Market Making Provider?
As we’ve mentioned above, no single project can exist without the significant support of a market maker. But how do you choose the right provider?
- Skills & Experience – in such a young and turbulent crypto market, getting the support of a team with in-depth market knowledge and practical experience is fundamental to getting the best solutions for your project’s development. It is better to follow reliable partners who really know what they are doing.
- Achievable goals – the targets that are not matched with reality – this is something we see very often in the crypto industry. For a successful market maker & customer relationships, it is crucial to establish realistic expectations on both sides. To align the FMM company’s mindset with the project founder’s goals, both parties must have a deep understanding of their objectives and each other’s motivations.
- Transparent reporting – a clear structure of rewards, accurate communication, and detailed reporting is a vital requirement of any business partnership. Before signing a contract, it is important to clearly define what the market maker is responsible for and to clearly articulate your expectations about the running of the project.
- Network of connected exchanges – futures market making providers have a wide network of partnerships, which is beneficial for any startup. They have the capabilities to help your project get listed and provide ongoing support before, during and after the launch.
Expand your opportunities with BitQuant.
Bitquant is a team of professionals in trading with broad experience in futures market making, liquidity providing and liquidity management. What sets us apart from our competitors? – Well, we go far beyond what many people think of as market makers.
If you are looking for a market maker who will blindly execute your instructions, you have come to the wrong place. We believe that a proper liquidity provider should be deeply engaged in a digital marketing strategy of a project r to coordinate both sides and make necessary adjustments in time.
We know the intricacies of the cryptocurrency market thoroughly and use the best market maker software to meet the needs of our clients.
Since 2019, we have been providing 24/7/365 liquidity to our customers and have successfully launched 12 tokens.
We have built connectivity to dozens of crypto exchanges, including such liquid ones as Binance, Gate.io, KuCoin etc.
Accelerate the growth of your project by entrusting your liquidity needs to the top futures market making players.
Book a call with us and we will find the best solutions to satisfy your liquidity needs.