Top Crypto Liquidity Providers Guide

May 13 2022
Crypto Community
Liquidity Provision
4 minutes
Liquidity plays a major role in attracting traders and investors. The ability to exchange an asset for cash quickly and participate in efficient markets reduce direct and indirect transaction costs. Thus, choosing a top liquidity provider is an important task. How to evaluate your market maker? Learn more in our blog.
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Why does your crypto business need a crypto liquidity provider?

Having a top liquidity provider as your partner can truly accelerate your crypto business growth. Whether you are in a crypto project or exchange business, having high liquidity and deep order books will surely help you attract more traders and investors. Plus, it will also help deliver a smooth trading experience to your users by minimizing slippage and reducing direct and indirect trading costs.

What does a top liquidity provider do?

So you might be wondering – how does a liquidity provider deliver all those benefits?

Top liquidity providers have significant amounts of assets under management that they use to provide liquidity or, in other words, “make the market”. These assets are put in both fiat and crypto pairs (according to collaboration agreement) to execute buy and sell orders made by traders. The orders are fulfilled 24/7/365 thanks to advanced trading technology and robust risk management systems in place.

5 Factors to evaluate a top crypto liquidity provider on

1. Technology

The best liquidity providers work with automated or algorithmic trading systems that fill up the order book with both buy and sell orders and execute them when matched in a matter of fractions of a second. As such, whenever a trader or an investor wants to enter or exit a trading position, they can do so in an instant.

Such quick execution benefits all market participants and encourages increased trading volumes as everyone can quickly exchange their digital assets for cash or other assets.

Advanced trading systems and exchange API integrations are at the heart of any top market maker strategy.

2. Trading Volume & Funding

Other important aspects for evaluating a crypto liquidity provider are their:

  • daily trading volumes
  • trading as a % of the total market trading volume
  • assets under management,
  • the liquidity levels that can be delivered on e.g. a daily/weekly/monthly basis
  • how much of their funds will be allocated for liquidity provision for e.g. specific pairs etc.
3. Supported Exchanges & Geographical Reach (for Crypto Projects)

The liquidity provider’s exchange network and integrations can significantly help with increasing a token’s popularity and trading interest. Each new exchange and geographical market comes with a unique opportunity to gain new traders and investors.

A top partner will offer both:

  • introductions to new exchanges, facilitating a faster and cheaper listing process
  • rapid results on exchanges where the liquidity provider is present (and the token is already listed on)
4. Reporting & Communication

Ad-hoc reporting dashboards with frequent (real-time, hourly, daily) insightful reporting is standard practice. So is regular communication through client-preferred channels, such as Telegram, Slack, WeChat, etc. Just choose your favorite(s)!

5. Risk Management

At the heart of the success of any liquidity provider and market maker is a top-grade risk management system. This ensures robust operations in all market conditions, ensuring service delivery 24/7/365.

How can you distinguish a good crypto liquidity provider from a bad one?

There have been notorious malpractice cases across market makers, exchanges, and projects, such as pump-and-dump schemes and wash trading. Such activities are highly unethical, as well as illegal in regulated markets. The top crypto liquidity providers and market makers will never offer to engage in such activities nor promise specific trading volumes or cryptocurrency prices.

Bad practices
  • Promising specific prices, trends or volumes
  • Wash-trading
  • Pump and dump schemes, cornering and ramping
Good practices
  • No promises on specific prices, trends or volumes
  • Maintaining of a pre-defined bid-ask spread service level
  • Supporting a crypto project with intros to get listed on higher-tier exchanges

Why Choose Gravity Team as Your Crypto Liquidity Provider Partner

Gravity Team has successfully operated in the cryptocurrency market for 5 years and has delivered outstanding results to its partners. We have built a state-of-the-art proprietary fully automated trading technology that runs 24/7/365.

We provide liquidity to over 1,200 crypto asset pairs and are fully integrated across 25+ centralized spot and derivatives exchanges in over 15 countries.

Our trading volumes in 2021 exceeded $50 billion, and, currently, we make close to 1% of the global crypto spot trading volume. We can offer significantly high liquidity levels via AuM to our trusted partners.

Gravity Team’s competitive advantage lies within our global reach of leading and emerging exchanges, offering expansion to the most-lucrative markets for crypto projects and providing world-class industry-leading service to cryptocurrency exchanges.

Interested to learn more about how we can accelerate your crypto business growth journey with the help of our liquidity provision services?

Do not hesitate to check out our crypto market making page or reach out to us directly by filling out our contact form! Our colleagues will be in touch shortly to arrange a free consultation.

Contact Us

We are always open to discussing new ideas. Do reach out if you are an exchange or a project looking for liquidity; an algorithmic trader or a software developer looking to improve the markets with us or just have a great idea you can’t wait to share with us!