Will Decentralized market making take over the standard centralized market makers

Will Decentralized market making take over the standard centralized market makers

Market makers stay behind the success of some of the very most successful unicorns and almost all cryptocurrency related projects. Market makers' main focus is to maintain liquidity, depth, and spread among markets in order to provide buyers and sellers with the best possible chance to trade a certain financial product or an asset.how market making works

Now, let's have a closer look at how market makers work and how they make profit:

Let's use the example of a fresh project called Mango Finance. Mango Finance just finished their ICO(Initial Coin Offering) and their token is currently tradable on the DEX (Decentralized Exchange) Pancakeswap.

In order to create healthy volume and an amount action, Mango Finance hired a market maker firm. Industry maker creates volume and the firm also sells Mango Finance tokens in order to generate a healthier income for itself. However, Mango Finance pays this market maker over $6,000 monthly and pays 3% of tokens sold, which is really a hefty price. Furthermore, Mango Finance is wholly dependent on the availability of this market maker. Mango Finance also wants to use this market maker to market the tokens of their private investors. Because of this industry maker is charging additional monthly fees.

Mango Finance is losing control over its markets, its private sale investors, and is paying hefty monthly fees for it.

As you will see from the above mentioned example, automated market makers have already been a good help to crypto startups, but their services may turn out to be quite costly. This is why firms have already been looking for market making alternatives and Avatea aims to help unicorns and startups with exactly just that.

Mango Finance now turns to the Avatea protocol. Choosing a decentralized market making bot. By connecting to the platform different market making algorithms become available which may be activated by staking their native token and a paired token such as for example BUSD or BNB. Mango Finance is currently able to control their market making activities completely independently, choosing and changing the required volume, price action, and buy/sell orders each time they want 24/7.

Mango Finance now pays a small fee to the protocol, this fee is used to purchase back the native Avatea token.

You are able to find out more about the Avatea protocol and how it works here.