Will Decentralized market making dominate the standard centralized market makers

 Will Decentralized market making dominate 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 to be able to provide buyers and sellers with the greatest possible opportunity to trade a specific financial product or an asset.avatea 


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


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


In order to create healthy volume and  a price action, Mango Finance hired a market maker firm. The marketplace maker creates volume and the firm also sells Mango Finance tokens to be able to generate a wholesome income for itself. However, Mango Finance pays this market maker over $6,000 each month and pays 3% of all tokens sold, which is really a hefty price. Furthermore, Mango Finance is wholly influenced by the availability of this market maker. Mango Finance also desires to utilize this market maker to market the tokens of these private investors. Because of this the market 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 aforementioned example, automated market makers have already been a good help to crypto startups, but their services may become quite costly. This is the reason firms have already been trying to find market making alternatives and Avatea aims to aid unicorns and startups with exactly just that.


Mango Finance now turns to the Avatea protocol. Picking a decentralized market making bot. By connecting to the platform different market making algorithms become available which is often activated by staking their native token and a paired token such as for instance BUSD or BNB. Mango Finance is now able to manage their market making activities completely on their own, choosing and changing the specified volume, price action, and buy/sell orders when they want 24/7.


Mango Finance now pays a small fee to the protocol, this fee can be used to buy back the native Avatea token.


You can find out about the Avatea protocol and how it works here.

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