Blockchain technologies have transformed financial services, with DeFi protocols unlocking access to a range of financial instruments previously out of reach for the general public. These include lending and borrowing tools, margin trading, and liquidity mining. One of the most impactful DeFi innovations is the rise of crypto synthetics, or “synths.”

Blockchain-based synthetics are essentially derivatives—they are tokenized assets that derive their value from an underlying asset or index. In simpler terms, the price of the synthetic tracks the price of the underlying asset it represents. When buying a synthetic, one is purchasing a token pegged to the value of an asset, such as a stock, FOREX, commodity, or financial index. For investors, synthetics offer 

instant, unlimited, and permissionless exposure

 to almost any asset without the need for direct ownership.

Perhaps the most familiar use of synthetics on blockchain platforms is for stablecoins. Numerous exchanges and protocols have established synthetic stablecoins backed either by a cryptocurrency or algorithmically determined. These synthetic stablecoins reduce friction and offer the advantage of being programmable.

Another prominent use of synthetics is to create “wrapped” tokens. In the Ethereum ecosystem, for example, this involves using a provider to lock BTC in exchange for wrapped BTC (wBTC). Since wBTC is ERC-20 compatible, it can be used to access Ethereum’s Dapps and DeFi protocols. This system enables BTC holders to preserve their BTC investments while accessing Ethereum-based resources, as wBTC can be redeemed for the locked BTC at any time.

For tokenized assets like synthetics, Kairon Labs' market-making services focus on improving 

 in order books. Through arbitrage between pairs and exchanges, our secure API integrations support price stability by lowering spreads between the bid and ask prices. Additionally, as a DeFi-native quantitative trading firm, Kairon Labs offers its clients valuable 

, leveraging the advantages of web3-native protocols.

Interested in learning more about how Kairon Labs can help you with synthetics and DeFi market making?

Get the latest blockchain, web3, and crypto market news, trends, trading insights, and market analysis from trusted trade experts around the globe

“A lot of [token] projects are fooling their own trader community or investors by faking these wash trades or these volumes. They give legitimate market makers a bad name. Still, global regulatory developments are progressively making it more difficult for such businesses to thrive." says Mathias Beke, Kairon Labs Co-Founder and CTO.

Crypto market-making involves several ethical considerations that uphold market integrity. With recent crackdowns on dodgy firms, it’s essential for projects to determine what separates legitimate crypto market makers from unethical ones.

We are grateful that Cointelegraph finally sheds light on the reality of market making and all its nuances.

Read the full article here: 

With recent crackdowns on dodgy firms, it’s especially important for projects to determine what separates legitimate market makers from unethical ones. Cointelegraph and Kairon Labs Co-Founder, Mathias Beke sheds light on the reality of market making and all its nuances.

With recent crackdowns on dodgy firms, it’s especially important for projects to determine what separates legitimate market makers from unethical ones. Cointelegraph and Kairon Labs Co-Founder, Mathias Beke shed light on the reality of market making and all its nuances.

Cointelegraph: Kairon Labs Sheds Light on What Real Market Makers Do

; each project announcement holds transformative potential and can make huge waves out of ripples. With innovation and its capability to move the market, there is also volatility. 

Memecoins? Gaming? AI? Don’t place your bets just yet—let’s study the tides that make up this bull run’s top trending altcoins.

The intersection of blockchain technology and gaming, once confined to traditional solutions, has emerged as a captivating frontier towards decentralization. Players increasingly demand ownership of assets and seamless, secure transactions within their game—a demand that DeFi can readily deliver.

Several key players like Enjin (ENJ), Decentraland (MANA), and Axie Infinity (AXS) have risen to prominence, relying on the growing demand for blockchain-based gaming ecosystems. Their increasing potential seen in robust market performances has caught the attention of investors.

What makes up this potential—Factors such as the integration of non-fungible tokens (NFTs), play-to-earn models, and other key blockchain innovations will put more clarity into its trajectory.

Artificial Intelligence has also earned the market’s favor as the technology advances. It has risen as a major contributor to the DeFi landscape, with popular altcoins like SingularityNET (AGI), Fetch.ai (FET), and Ocean Protocol (OCEAN). These projects leverage AI to innovate cryptocurrencies, with cutting-edge solutions ranging from decentralized AI marketplaces to data-sharing protocols.

As industries increasingly embrace AI, these projects are well-positioned to become even more crucial in DeFi. With recent developments, you may have seen AI-based projects take off at exciting speeds. One such development is its convergence with other sectors like gaming and meme coins, which stirs even more interest in the market. It's worth paying very close attention to this coming crypto bull run. 

Meme coins, with origins from popular culture and internet memes, represent a novel, community-based approach to crypto, with tokens like Dogecoin (DOGE) and Shiba Inu (SHIB) leading the charge. These coins often derive value not from traditional fundamentals but from the sheer enthusiasm of their communities.

The appeal lies not just in the technology but in the shared identity fostered by memes. Tokenomics plays a pivotal role, with unique features such as decentralized autonomous organizations (DAOs), liquidity pools, and yield farming contributing to the participatory nature of Meme Coin ecosystems.

While Meme Coins bring a refreshing facet to crypto, they also pose unique challenges—

 is one. Their value can be highly volatile, driven by sentiment and trends rather than traditional market indicators. However, for agile investors attuned to the pulse of internet culture, Meme Coins present opportunities for rapid gains and unprecedented social influence.

 are the foundational building blocks of blockchain networks, and they also play a pivotal role in the scalability and efficiency of DeFi. Positioned at the base layer, these protocols are designed to enhance transaction speed, security, and overall network performance. Notable Layer 1 altcoins such as Ethereum (ETH), Binance Smart Chain (BSC), and Solana (SOL) lead this category:

Despite challenges like network congestion, Ethereum remains a pioneer with ongoing upgrades like Ethereum 2.0 aiming to enhance scalability and sustainability.

 BSC, known for its low transaction fees and fast confirmation times, has gained significant traction with a robust DeFi ecosystem.

Boasting high throughput and low fees, Solana has positioned itself as a scalable Layer 1 solution, attracting a growing number of decentralized applications (DApps) and developers.

Layer 1 protocols exert a profound influence on crypto by setting the stage for innovation, scalability, and user adoption.

Tokens and projects aim for equilibrium against the roaring highs and occasional turbulence of a crypto bull run. Altcoins, the diverse array of cryptocurrencies beyond Bitcoin, are no longer mere offshoots but dynamic entities shaping DeFi as we know it.

Exploring altcoins within its leading sectors: Gaming, AI, Meme Coins, and Layer 1 protocols opens the market to diverse opportunities. Understanding where these ecosystems intersect will always put you at an advantage.

Crypto Bull Run Hottest Altcoins: Meme Coins, GameFi, AI

In our previous blog post, we wrote about the 

. Although we did anticipate that these would be released this year, we all know that 2023 presented challenges within the cryptocurrency sector, which perhaps urged some of these projects to postpone or delay their token release.

However, there are still various projects initiating notable airdrops that garnered significant interest within the community and potentially augmented investors' portfolios. It is essential to recognize that these airdrops transcended beyond mere distribution of complimentary tokens; they marked critical junctures in the development of these projects and potentially reflected the robustness of their respective communities. 

Let's explore some of these standout moments:

Arbitrum, with its layer 2 solution for Ethereum, took a significant leap in improving smart contract capabilities. Launching its ARB token and the subsequent airdrop was a landmark event. Allocating 1.162 billion ARB tokens to its early users, this airdrop was one of the largest in terms of scale and impact.

Celestia's innovative approach to blockchain scalability, focusing on a modular design, was a game-changer. The airdrop of 60 million TIA tokens to users of various platforms and contributors was a testament to its commitment to fostering a diverse and engaged community.

As an oracle network, Pyth Network played a crucial role in providing accurate financial market data. Its decision to airdrop 600 million PYTH tokens to a wide range of users underscored its role as a key player in the blockchain ecosystem.

As the calendar flips to 2024, the crypto community is buzzing with anticipation over potential airdrops from groundbreaking projects such as Zksync, Starknet, and Layer Zero. These innovative platforms aren't just pushing technological boundaries; they're poised to inject fresh vitality into the crypto ecosystem, offering new avenues for participation and investment.

1. ZKSYNC: The Future of Scalable Transactions

zkSync, a ZK rollup, stands out as a trustless protocol enhancing Ethereum transactions with scalability and cost-efficiency. By moving most computation and data storage off-chain, while ensuring the security level of Ethereum, zkSync presents a revolutionary approach to transaction processing.

 With $458 million raised from top-tier investors, zkSync has hinted at a future native token launch. Engaging with their mainnet and testnet regularly could place you in a favorable position for an airdrop. Pro tip: transact frequently, perhaps monthly or weekly, to boost your eligibility.

2. STARKNET: Unleashing Unlimited dApp Scalability

StarkNet, a decentralized Validity-Rollup, is an L2 network over Ethereum, propelling dApps towards unlimited computational scalability. Leveraging STARK, the most secure and scalable cryptographic proof system, StarkNet doesn't compromise on Ethereum’s security and composability.


With $273M in funding, StarkNet has confirmed the launch of its STRK token. A significant portion of the total supply is earmarked for end users and developers of StarkNet-based dApps. If you've engaged with dApps like dydx, Immutable, Celer, and others on StarkNet, stay alert for potential airdrop eligibility

3. LAYER ZERO: Redefining Omnichain Interoperability

LayerZero stands at the forefront of omnichain interoperability, specializing in seamless message passing across different chains. It emphasizes authentic, guaranteed message delivery with adaptable trust levels


 Although LayerZero currently doesn’t have its own token, its substantial funding of $173.3M from notable investors signals a strong likelihood of a future token launch. Active users of dApps built on LayerZero should keep an eye out for potential airdrop opportunities.


: An Ethereum L2 solution incubated by Coinbase, Base is designed for scalability and accessibility, aiming to onboard the next billion users into the crypto space. It’s built on the OP Stack in collaboration with Optimism. As Base progresses towards decentralization, there might be opportunities for early users to benefit from airdrops.


 A unique Ethereum protocol introducing 'restaking,' EigenLayer allows for the extension of crypto-economic security to more applications. Users actively participating in restaking could be rewarded in future airdrops.


 A type 2 zkEVM, Linea replicates the Ethereum environment, promising lower transaction costs without sacrificing Ethereum's security. Early adopters and developers might receive incentives as the platform grows.


Shardeum brings linear scalability to EVM-based L1 through dynamic state sharding, maintaining low fees and high throughput. Active developers and users within the Shardeum network may be recognized with airdrops.


Focused on omnichain smart contracts and messaging, Zetachain aims to revolutionize cross-chain interactions. Zetachain has hinted at launching “ZETA” tokens, with testnet users potentially eligible for airdrops.


An EVM-equivalent ZK-rollup, Scroll leverages zkEVM for efficient EVM execution, aiming to enhance the Ethereum ecosystem. Early adopters and active users may be in line for future rewards.


Staying informed about these developments is crucial. Whether you're a seasoned investor or new to the scene, understanding the impact and potential of these airdrops can significantly influence your strategies and decisions. Airdrops and Retrodrops are a great way to incentivize the project's community and perhaps a proven marketing strategy to keep people excited about their upcoming releases. 

To learn more about the difference between Airdrops and Retrodrops, stay tuned for our upcoming post!

: This article is for informational purposes only and should not be taken as financial advice. Always conduct your own research and consult with financial experts before making investment decisions.

Missed some retro drops and airdrops this 2023? Here is a comprehensive guide on the possible airdrops/ retrodrops for the coming year 2024...

Most Anticipated Retrodrops and Airdrops in 2024

, in which market makers facilitate the buying and selling of digital assets by providing continuous buy and sell orders. They ensure good liquidity, a critical aspect in the decentralized and fragmented characteristics of the crypto market. But what are the popular market-making strategies that make liquidity happen? Let’s talk about it.

Evolution of Market-Making Models in Crypto

Digital assets come in unique shapes and challenges that make it necessary for market-making models to evolve. This was originally a painstaking process, with individuals manually adjusting order prices based on market conditions.

The market shifts and matures through time. Tech adapts to meet ever-changing demands. With the increase in trading volumes, automated market-making (AMM) systems and algorithmic trading became prevalent in this sector of finance. This tech advancement allows market makers to execute trades at high speeds and respond to market changes in real time—further accelerated by blockchain developments, smart contracts, and DeFi.

Designated Market-Making Model vs. Principal Market-Making Model

Further down the road, we have two primarily used market-making models in the crypto space: the 

Designated Market Making Model and the Principal Market Making Model

. Let’s take a look at the difference in this educational video:

These market-making models effectively mitigate slippage and enhance market depth. The difference lies in their risk profiles and levels of engagement for token issuers. With unique characteristics, token issuers can compare the two and decide which aligns with their trading objectives. 

Liquidity: The Role of Crypto Market Makers

What do market makers and these models bring to the table? 

Liquidity is king in any financial market, and the crypto space is no exception. Market makers enhance liquidity by narrowing bid-ask spreads—the differences between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask). This spread reduction makes it easier for traders to buy or sell assets at fair prices, ultimately attracting more participants.

Liquidity is especially critical for institutional investors and large traders, as it allows them to move in and out of positions without significantly impacting the market price.

We’ve established how market makers keep the market flow using carefully strategized models. What are the implications of an illiquid project without market makers?

 Without a market maker’s involvement, spreads widen, increasing the expense for investors and affecting market efficiency.

 Illiquid projects become more prone to unpredictable price movements, dissuading potential investors.

 Thin order books and limited liquidity can create challenges in promptly matching orders, leading to difficulties entering or exiting positions.

Good market-making that utilizes the right strategies and 

 go hand-in-hand in contributing to the overall stability of the crypto market.

Here's a helpful infographic that might come in handy:

Discover the mechanics of market making, comparing Designated and Principal Models. Explore their pros, cons, and risk profiles of each + a free infographic.

Understanding Market-Making Models in Crypto

Token liquidity is an essential aspect of any blockchain-based ecosystem, and it refers to the ease with which a particular token can be bought or sold on an exchange without affecting its market price significantly. In other words, liquidity refers to the ability to convert a token into cash or another cryptocurrency quickly and easily.

Example: Think of it as if buying a car: As a buyer, you want to be able to purchase a car ASAP while its market value is still pretty low, however, the sellers of that car are taking a long time to respond, because no one seems to be available to sell it even though the car is just sitting there, untouched. Finally, someone approached you that the car could be sold after all, but here’s the catch, the price increased! Because the waiting time is so long, the market value of the car has increased, and now you have to pay more than what you initially wanted to buy it for! #yikes

 To prevent a buyer from being frustrated with the lack of sellers, people hire Market Makers (such as 

) so that someone will always be there to sell the car (or in this case, your token). Other than those, there are also 5 important reasons why it's important to keep your tokens LIQUID, and we have enumerated them for you:

The first reason why token liquidity is important is price stability. When a token has low liquidity, it is prone to sudden price swings caused by large buy or sell orders, which can lead to significant volatility. However, if a token has high liquidity, there are enough buyers and sellers in the market to keep the price stable. This means that investors and traders can rely on a stable price for the token, which can increase their confidence in the market and encourage them to invest.

Tokens with high liquidity also tend to have higher trading volumes. This is because there are more buyers and sellers in the market, which creates a more active and vibrant ecosystem. A higher trading volume can be beneficial for traders and investors because it increases the chances of finding a buyer or seller for a particular token. Additionally, higher trading volumes can help to drive the growth and development of the token ecosystem.

Tokens with high liquidity are more likely to attract institutional investors and large traders. This is because these investors typically require high liquidity to buy or sell large volumes of tokens without significantly impacting the price. Increased capital inflows can be beneficial for the development of the token ecosystem, as they can help fund new projects, improve technology, and attract more users.

High liquidity can also make the market more efficient. When there is high liquidity, buyers and sellers can transact at fair market prices without experiencing significant price slippage or market distortions. This means that the market operates more efficiently, and investors and traders can enter and exit positions with greater ease.

Finally, tokens with high liquidity provide more flexibility to traders and investors. They can easily enter and exit positions as needed, which can be especially important for traders who need to respond quickly to market changes or manage risk in their portfolios. This flexibility can be beneficial for both short-term and long-term investors, as it allows them to adapt to changing market conditions.

The positive outcome in general is that tokens with high liquidity are more likely to attract institutional investors, drive the growth of the ecosystem, and provide better investment opportunities for traders and investors. 

Keep in mind, that creating an environment where people can easily trade promotes a positive market impact. You must keep your tokens available for trade anytime. A successful token launch involves being able to sustain and keep up with the demand trade of your tokens.

Token liquidity is an essential aspect of any blockchain-based ecosystem, and it refers to the ease with which a particular token can be bought or sold...

Token liquidity is an essential aspect of any blockchain-based ecosystem, and it refers to the ease with which a particular token can be bought or sold on an exchange without affecting its market price significantly.

Launching a Token 101: Why is token or crypto Liquidity important?

Launching a Token 101: Why is Liquidity Important?

 have just landed and with such huge successes from Arbitrum’s $ARB to Celestia’s $TIA, it seems the community is gearing up for more buzzy drops in 2024. You don’t want to be the only one left empty-handed.

Today, we’ll take a deep dive into airdrops and retrodrops, discover what makes crypto’s “Free Tokens” marketing tactic irresistible, and get insider tips on how to get the most value out of it.

Crypto airdrops and retrodrops are two of the most common forms of token distribution aimed to incentivize desired actions from the crypto community, such as:

Testing a new token before its launch, and

Think of it as a surprise giveaway where you get digital assets for free or by participating in simple tasks. Blockchain projects use this marketing tactic to create awareness and hype and drive continuous engagement. 

They also foster a sense of community in the crypto space by directly involving token holders in the project's growth, transforming users into advocates.

An airdrop is a strategic marketing move in crypto, where a project distributes free coins or tokens directly to wallet addresses to generate buzz and push circulation in a saturated market. Airdrops typically target active members within the crypto community in exchange for various promotional tasks and loyalty.

A retrodrop is a form of airdrop, involving the retrospective distribution of free tokens to holders. This occurs based on predetermined criteria, such as testing a product before its official launch and long-term token holding. A way for crypto projects to reward early adopters who believed in them from the outset.

We have a free infographic at the end of this blog to compare the two.

Blockchain projects can utilize various types of airdrops based on their marketing goals. Let’s look at three of the main types of airdrops you’ll commonly find: standard, bounty, and holder.

 Standard airdrops are distributed to a broad audience with little to no task required. All it takes is a quick sign-up.

The objective here is to reward the first few users to get into the new token, so you must be quick.

 Participants are incentivized with “free” tokens in exchange for specific tasks, creating a symbiotic relationship between project and individual. These tasks can range from social media engagements to community involvement. 

The key here is active participation, with rewards tailored to the effort invested. The more involved you are, the greater the potential bounty.

 Instead of tasks, users are rewarded based on the amount of tokens they hold. A strategy designed to foster long-term dedication within the community.

The longer you hold onto the tokens, the more rewards you receive. This type of airdrop aims to build a stable and loyal user base through sustained engagement.

Trader Tips on Finding Airdrops and Retrodrops

 Seasoned Kairon Labs trader and cryptodrop expert, 

, breaks down the essentials for participating in legitimate and high-quality drops.

According to him, airdrop seekers should focus on two key sources:

"It's best to follow each CEX announcement closely. And for crypto project drops, there are several good Twitter accounts to follow: AirdropAlertCom, AirdropAlertAAD..."

Patrick also advocates for a more systematic approach. 

"Stay ahead by following new projects on each chain through 

"It's a centralized hub where you can always get firsthand information."

"Currently, the most valuable airdrop is from L1/L2 chains. The 

 layer 2 solution airdrop is one good example."

Crypto airdrops is a high-stakes playing field, and more than anything, Patrick stresses the importance of due diligence. He recommends market research and airdrop rule analysis for popular airdrops, like Layerzero, Starkware, and zkSync, to craft effective airdrop farming strategies for new chains.

Who can resist free money? It's the common thread that drew many of us into cryptocurrency. But while crypto projects promise the best in innovative marketing moves, some are laced with red flags. If you’re not careful, you’ll end up losing more than the free tokens you’ve earned.

If you’re reading this as part of your airdrop research, you’re already on the right track. So what are the tell-tale signs you’ve stumbled upon a scammy airdrop? Let’s get to it:

Excessive requests for personal information

Be wary of airdrops that demand more personal information than necessary. Legitimate projects won't need your life story or your mother’s maiden name to distribute tokens. And if anyone asks for your private keys, run!

Authentic airdrops are backed by clear communication from official accounts. If there’s a scarcity of official announcements or social proof, consider it a red flag. The last thing legitimate projects want is to be labeled as a scammy token, tarnishing their reputation. They want users to be well-informed before launching.

If an airdrop promises astronomical returns or seems too good to be true, it probably is. Cryptocurrency involves risk, and exaggerated promises often signal a scam. So go the opposite route—trust projects that underpromise and overdeliver.

Check the authenticity of social media accounts associated with the airdrop. Scammers often create fake profiles to mimic legitimate projects. Bot replies and engagements are also a red flag. Always look for verification badges and cross-check information across multiple social media platforms.

Airdrop Evolution: What the Future Holds for Cryptodrops

As cryptocurrency evolves, airdrops are also expected to adapt to new trends and developments. They’ve gone beyond just your average marketing tactic as seen from successful drops this year. Despite being as young as blockchain and Web3, airdrops have made individuals wealthier and projects more powerful with 

Looking ahead, the potential applications of airdrops within Web3 are vast and exciting. Airdrops may evolve into powerful tools for community building, decentralized governance, and even the equitable distribution of up-and-coming assets.

It seems airdrops are not just a thing of the present; they are shaping the very fabric of a decentralized future. Are you in?

Take a deep dive into airdrops and retrodrops, crypto's widely used marketing tactic, and get insider tips on how to get the most value out of it. 

Airdrops and Retrodrops Decoded: A Comprehensive Guide

Market volatility is a constant companion in crypto, and it’s enough to keep traders and investors on the edge of their seats. Let’s delve into the heart of the matter—what makes up the rollercoaster nature of blockchain-based markets and how participants achieve stability.

We also shine the spotlight on crypto market makers, the invisible heroes that provide that very stability in the volatile world of digital assets.

Crypto market volatility stems from a myriad of factors, including:

News of regulatory developments, whether proposing new frameworks or imposing restrictions, can send ripples through the market. Traders and investors keenly watch for legislative cues that would shape the legitimacy of cryptocurrencies on a global scale.

 While these upgrades are often promising, they also introduce an element of uncertainty. These can 

 as stakeholders assess the potential benefits or risks associated with these developments.

Of course, global forces are also at play when it comes to crypto market dynamics. Blockchains are not isolated from the broader economic landscape. Inflation rates, interest rates, and geopolitical events, also cast their shadows on the crypto market.

Social media platforms and other digital communities serve as a powerful amplifier for market sentiment. Tweets, Reddit discussions, and online forums can swiftly alter perceptions, triggering a cascade of buy or sell actions.

The "viral" era of information means that even a single influential post (e.g. Elon Musk's tweets on $DOGE) can disproportionately impact market behavior. Remember 

What makes crypto market volatility truly intricate is the interplay of these factors. Regulatory changes might coincide with technological upgrades, amplifying the market's response. These shifts in market conditions can intersect with online narratives, creating a web of influences that challenge even the most seasoned market analysts.

This volatility isn't just a numbers game; it profoundly affects traders, investors, and overall market sentiment. High volatility can lead to significant price fluctuations and risk, making informed decisions difficult for participants.

Market stability guides traders and investors to safer shores. This allows participants to focus on long-term goals rather than getting swept away by short-term market currents.

Crypto market makers are individuals or groups that facilitate trading through continuous buy and sell orders for a blockchain project. Their primary function is to enhance liquidity and narrow bid-ask spreads, making it easier for traders to execute orders, and enter and exit positions without moving the market in either direction.

Legitimate market makers are NOT market manipulators. They don't wash trade. Their goal is to create an efficient market and make sure prices align across all venues where the asset is being traded.

More about crypto market makers vs wash traders on an infographic at the end of this blog.

Liquidity provision is the backbone of a stable market environment. So how exactly do market makers provide liquidity in ever-dynamic cryptocurrency markets? Here are the ways:

Market makers employ sophisticated algorithms and automation in efforts to narrow bid-ask spreads and increase liquidity. These tools enable quick responses to market changes, adjusting buy and sell orders in real-time to prevent large price swings. 

 that illustrates how automation in crypto market-making works.

Statistical arbitrage is a key tool in a market maker’s arsenal. This data-driven strategy involves identifying and narrowing price discrepancies between related assets. By analyzing historical data, correlation patterns, and statistical models, they can execute trades that capitalize on short-term pricing inefficiencies.

This strategy capitalizes on market momentum. Market makers monitor and ride prevailing trends, aligning their positions with the broader market sentiment. By doing so, they not only contribute to liquidity but also act as stabilizing forces during upward or downward trends.

Market makers implement a diversified mix of assets and positions, aiming to neutralize the impact of broader market trends. This approach seeks stability by mitigating directional risk and minimizing the impact of market fluctuations on the overall portfolio.

Despite their vital role in the world of digital currencies, market makers also face challenges, such as market manipulation, bear market liquidity shortages, and the ever-present risk of technological glitches. These challenges add complexity to an already demanding role.

The crypto space is known for its rogue nature and lack of traditional oversight. This makes it prone to bad actors attempting to manipulate values for personal gain. 

Market makers must continuously refine algorithms and monitoring systems to counteract these practices and ensure fair play in the market.

Lack of liquidity and volume in a bear market poses a huge challenge for cryptocurrency exchanges.

Jens Willemen, CEO and co-founder of Kairon Labs, says 

“It’s extra important to provide liquidity for your native asset as the organic traders fade away and the market maker represents a larger share of the order books. It's important to instill trust by providing orderly markets as a token issuer in these low liquidity/volatility times.”

Liquidity crunches are often the result of rapid changes in market sentiment or unforeseen events that can trigger a sudden imbalance between buyers and sellers.

The risk of technological glitches is ever-present in the blockchain era. Even the most minor technical hiccups can have significant consequences. 

Market makers must invest heavily in robust technological infrastructures and comprehensive risk management protocols to minimize the impact.

Ethical market-making involves conducting fair and responsible market-making activities and adhering to ethical standards and principles. The well-being of all market participants is the prime focus. Key aspects of ethical market-making include:

On the topic of ethical market-making, Willemen is firm in his goal for Kairon Labs,

 “We are founder and project-centric and are not looking to purely deploy market-making to generate profits for ourselves. Our business model ensures that we win together with the project.”

The Importance of Transparency in Market-Making

Too many founders don’t understand the complicated deal structures proposed by some of our colleagues. We want to simplify things so all parties truly understand and are aligned in the best way possible. 

Create transparency and trust towards the community so they know we are not working against them.” 

Transparency serves as a powerful tool for building trust among market participants. When market makers openly disclose their methods, traders and investors gain confidence in the fairness of the market.

Operating with transparency not only builds trust among market participants but also enhances overall market integrity. It also…

Facilitates informed decision-making for traders and investors,

In facing these challenges head-on, market makers demonstrate their commitment to maintaining stability and trust in these volatile markets. From employing decentralized finance (DeFi) solutions to advanced risk management tools, market makers like Kairon Labs are your protectors in the crypto space.

Stability is a collaborative effort, in which market makers play a huge role. But it’s also every market participant’s responsibility.

Understanding the dynamics of market-making can empower traders and investors to sail unforgiving crypto waters with confidence and turn market volatility into opportunities for success.

Market volatility is a constant in crypto. How do crypto market makers achieve stability in volatile markets? Let's find out in this blog (+ free infographic).

Stability In Volatility: Why Crypto Market Makers Matter

Get the latest blockchain, web3, and crypto market news, learnings, trends, in-depth trading insights, and in-depth market analysis from trusted trade experts around the globe.

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