Foundations of Digital Assets Market Making: An In-Depth Introduction

Quick Take

• In modern financial marketplaces, two key participants drive market dynamics: makers and takers. These two categories offer a more nuanced contrast to the simple ‘buyer vs. seller’ dichotomy.
• The term “market maker” today typically refers to sophisticated entities that engage in professional market making. These institutional market makers are typically specialised financial professionals with substantial capital and resources.
• Due to their pivotal role, market makers can be misunderstood as price manipulators who artificially drive market direction through volume creation. In reality, these entities capitalize on existing market inefficiencies rather than creating them.
• This research is commissioned by us, and authored by The Block.

Download