Ethical Market Makers are Building Real Web3 Value With Fast Moves and Tailored Tech

The best Web3 projects are anchored in groundbreaking ideas, like rewarding gamers in tokens for playing their favorite games and open-world MMORPGs where players own in-game assets as NFTs alongside quests and adventures. Some successful Web3 platforms follow a dual-token economy where active players receive two tokens as rewards, e.g., a utility and a governance token.

There are new projects uniting the metaverse and more traditional activities like horse racing. Players nurture and build digital horses with distinguished features and trade them on a Web3 platform. They train their horses to improve talent, skill, and statistics over a certain period.

An unprincipled platform can do a world of damage 

Reliable market makers use automated crypto trading algorithms and other advanced technology to analyze market conditions, arbitrage opportunities, order book depths, etc. Their proprietary trading technology is tailored to Web3 projects’ unique goals and needs. Even the best project can fall victim to an unprofessional market maker, so where do the best projects go when they’re ready to enter the market?

Platforms such as Wintermute, DWF Labs, Jump Trading, and Kairon Labs have helped launch some of the biggest names in Web3. The best market makers minimize delays by preserving high liquidity and allowing clients to carry out trades rapidly and effectively without major price fluctuations. They might sustain liquidity by placing buy and sell orders on an exchange at the same time. They are flexible enough to react to unforeseen market changes and modify their tactics accordingly.

A market maker should inspire trust by creating a transparent trading environment. Platforms are likelier to trade or invest in assets when they can trust the trading process’s stability and fairness. Market makers help maintain stable prices by making sure buy and sell orders are always available.

A provably ethical market maker

Kairon Labs ranks among the most reputable market makers. Their ethical market-making services are tailored to token projects and digital asset issuers, and their proprietary algorithmic trading software is integrated into a network of over 100 centralized and decentralized exchanges, ensuring 24/7 global market coverage. Kairon Labs’ team has decades of experience and has collaborated with more than 400 projects at the time of writing. They boast a wealth of expertise in financial markets, trading, fintech, quantitative investments, and trading technologies.

Token issuers can choose between a designated and a principal market-making model. Kairon Labs’ software adapts to market shifts immediately, maintaining solid liquidity and tight spreads with high precision. The software is continuously refined and adapts to the market based on deep analytics. However, it’s Kairon Labs’ dedicated, hands-on approach involving support tailored to each Web3 project that really makes the company stand out.

The top market makers align with blockchain’s principle of transparency

Blockchain’s salient principles of transparency and accountability encourage ethical practices, but those cannot be taken for granted. The digital asset space remains vulnerable to malicious entities. Clear reports and reputable audits are proof of ethical market making. Platforms that maintain open communication and provide accurate performance data are likelier to build loyal communities and create healthy markets. Wash trading remains prevalent among unethical service providers, damaging Web3 projects’ reputation and attracting regulatory attention.

A reputation built on performance rather than branding

A performance-based reputation should outweigh branding when choosing a market maker. Projects should look for measurable results, such as maintaining solid order book depth and tight spreads near the mid-price, even in a volatile market. Reputable market makers customize their offerings to reinforce the project’s growth and liquidity goals while maintaining data-backed, transparent performance metrics.

Technology beyond custom algorithms

Top-performing market makers maintain stable markets by leveraging state-of-the-art technology and scalable solutions. Their tools may include exchange proximity colocation, high-performance computing clusters, and specialized hardware and software for executing trades. Some use high-frequency trading algorithms that detect even the minutest deviations between exchanges and act in a fraction of a second. Others leverage statistical arbitrage models, which utilize math-based strategies to identify mispriced assets. Market-making algorithms continuously adjust the ask and bids to keep trades running. Machine learning models detect hidden patterns within huge volumes of data.

The criteria for capability and flexibility in market maker services

The best Web3 projects consider the market maker’s execution speed, slippage, bid-ask spread, market depth, latency, and order fill rate. The execution speed is how fast the platform fulfills orders, and the corresponding rate reflects how many order requests have been completed. The slippage is the difference between the expected and the final trade price, and the latency is how fast the platform reacts to market changes. These metrics reveal whether a market maker can adapt to changing conditions, handle sudden market shifts, and support the project in a dynamic market.

Competent market makers may adjust the inventory required and set up DEX liquidity pools. They demonstrate flexibility by truly grasping a project’s goals, roadmap, and potential roadblocks before recommending a solution. Sharing valuable contacts like relevant partners or exchanges and explaining why one strategy is appropriate and not another reflects genuine commitment to a Web3 client’s success.

In addition, the best market makers are capable of navigating regional regulations. The absence of this capability is a challenge to token liquidity. Due to regulatory issues, some market makers have limited coverage in key markets such as the US.

Support on a case-by-case basis is paramount when it comes to on-chain liquidity. Automated market-making solutions on DEXs rarely suffice. The services must align with the project’s listing strategy to ensure a seamless market launch and subsequent growth trajectory. A well-crafted listing strategy guides the selection process, ensuring that the chosen market maker can enhance the project’s market presence and reliably meet its liquidity needs down the line.