The function of market making plays a crucial role throughout the financial world.  While some experts would argue that it is the fundamental engine in driving markets, little information is available to thoroughly explain how it works in simple terms.

As it relates to the crypto landscape there are many misconceptions about market making and the role it plays for digital assets (like cryptocurrencies).  Generally speaking, market makers supply liquidity on both buy and sell orders of an asset and earn a commission on transactions conducted from the difference of the bid (buy) and ask (sell) price of that asset.

The effect of market making can be seen to have a direct correlation in three important trading measures: liquidity, volume, and spreads.  

Let’s take a look at how it affects each one.

Increasing Liquidity

Market makers have provided liquidity by having their buy/sell orders on order books that are readily available to be transacted upon.  As a result there is an increase of liquidity; orders are matched with ease and efficiency. 

Increased Volume

Having market makers present to provide liquidity ultimately helps create even more liquidity as the transaction capacity becomes more stable.  The end result in most cases is a greater volume of transactions.

Tighter Spreads

When volumes of a particular asset increase on the market making side, spreads can be lowered since they don’t need as many transactions to earn a commission.  This serves to enhance the overall trading and exchange experience. 

Making Crypto Markets with NIOX Maker 2.0

Autonio’s NIOX Maker 2.0 is an algorithmic trading tool that can help you make markets in a straightforward and automated manner like professionals do.  There is no minimum amount needed to get started and a paper trading option (not using your own money) for those who want to dip their toes in the water first.

3 Simple Steps to Making Markets with NIOX Maker 2.0

1.  Connect your Web 3.0 wallet

Maker 2.0 supports MetaMask.  For further guidance on how to set up, you can visit this guide

2.  Add exchange API keys

Maker 2.0 has integrations with most of the top exchanges on the market including Binance, Kucoin, Ascendex,, Loopring, and Tomodex.

Under the settings section in Maker, you can add the API keys of the exchange that you would like to use while conducting your market making sessions.

3.  Run Market Maker

After selecting your desired exchange, you also should input the pair with which you would like to trade (i.e. BTC/USDT).

On top of this basic information, there will also be an option to select your market making strategy depending on your preferences.  The following is a rundown of each one:

  • Smart Market Maker: will continue with your remaining order amount even if it is only partially fulfilled. 

  • Nonstop Market Maker: ideal for very choppy 2-way markets; continues making trades without taking into consideration any price swings.

  • Taker Bot: strategy focused on volume generation.  It works best with liquidity mining campaigns but can be less effective for immediate profit.

Three Helpful Tips to Use When Making Markets

  1. When an asset is trending up, place a higher sell spread than buy spread.  Conversely, if it is trending down, place a lower sell spread than buy spread.

  1. Check your trading chart frequently to adjust settings depending on market conditions.

  1. Don’t use more than 20-25% of your portfolio for an order.

Have fun learning and trading with Autonio!