How Market-Making Can Boost the Traction for Your Security Token - Espay Exchange

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(No Transcript)
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Introduction

• Are you ready to invest your time in an STO
  project? Do you have a game plan for its launch
  and traction? Before launching your STO, you must
  know how a security token offering can gain
  traction. This article will help you know how can
  be possible with the help of market-marking.
  Lets get started!

N. Ameria
Understanding the Concept of Market-Making
Nowadays, you can find many market makers that
often brokerage houses providing trading services
for investors with the aim of keeping financial
markets liquid. Speaking of liquidity, it
describes the easiness with which security or
asset can be quickly bought or sold in the market
without affecting its market price. The most
liquid asset of the market is cash universally
since it is quickly converted into other
assets. Since market-making contributes the most
in ensuring there is enough liquidity in the
markets, it is quite evident that without market
makers, there will be a little liquidity, and
investors who want to sell securities will be
unable to gain profits due to the lack of
potential buyers in the market. Therefore, market
makers keep market well-going. Without market
makers, the transactions may be insufficient, and
overall investment activities will be less.
Hence, your token may not be able to gain
traction.
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How Does Market-Making Work?

• The market marking indicates a keenness to buy
  and sell the assets or securities of a definite
  set of companies to broker-dealer firms that are
  member firms of that exchange. Every market maker
  showcases buy and sell quotations for a defined
  number of shares. Once a buyer receives the
  order, the market maker sells off his shares
  position from his inventory, in order to complete
  the order. In other words, market-making allows a
  seamless flow of financial markets by easing out
  the buying and selling for investors.
• Moreover, a market maker should be responsible
  for quoting prices for buying (biding for) and
  selling (asking for) securities. They are also
  responsible for quoting the volume in which they
  want to buy and sell, and also the frequency of
  time it will quote at the best offer prices and
  best bid.
• Market making can help to attract new investors
  as well as experienced traders. It can decrease
  the expenses of both traders and investors.
  Allowing the better conditions for listing on new
  exchanges, Marker making also facilitates
  seamless selling of unsold tokens. Even if you
  are thinking of advancing the position of
  security token in the listing of exchange you
  have chosen, then choosing market making can be a
  great idea for you.

N. Ameria
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How Market Makings can help In Gaining Traction
for Your Token?

• In 2019, the US market was facing an issue of
  lack of liquidity in their stocks across 13
  exchanges and other 40 execution venues. The
  massively decreasing cost of operating and
  launching online order crossing systems has
  resulted in a sudden increase of decentralized
  pools of liquidity and price breakthrough in
  securities listed outside of the most renowned
  100 traded names. Such a fragmented trading
  situation created a thin layer of liquidity that
  was easy to rupture.
• Understanding why this happened is important for
  the crypto domain. The power to permanently send
  some blockchain assets to anyone, without any
  permission, simply indicates the beginning of a
  global crypto exchange. All you need is to get a
  server and marketing shove. This is no surprise
  that CoinMarketCap lists around 234 exchanges and
  top exchange only has 5 of the market share of
  everyday volume. Listing an illiquid asset on
  trading venues without dedicated market making is
  a sure shot recipe of disaster.
• Now, lets discuss how market making will help in
  the traction for your tokens.

N. Ameria
By Reducing Friction

• Nowadays, Cryptocurrency is suffering from a lack
  of efficiency. This creates many challenges for
  traders to participate in, where friction (direct
  and indirect costs of transacting) is higher.
  Consequently, token issuers will suffer, since
  they will be needing a seller if someone is
  willing to buy, and the buyer if, willing to
  sell. In crypto-world, this cant be the usual
  case, especially for less famous tokens.
• With market making, you can reduce the friction
  for people willing to participate in the
  crypto-market, providing cost-effective and
  well-managed entry points for aspired traders.

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By Driving the Growth of the Token Ecosystem

• For many STO project owners, the usefulness of
  their tokens is what can facilitate the growth of
  their business model and encourage future desires
  of adoption.
• With the help of market-making, you can surely
  discover a potential buyer for the token. Market
  makers support healthy and functional token
  economics and the brighter future of your STO
  project. The economic health of token also
  affects the standing of a project with potential
  stakeholders in the crypto ecosystems, including
  investors, backers, and exchanges.
• Hiring a market maker can be used to provide
  liquidity frees up issuers to concentrate on
  building their technology and supporting adoption
  in the space.

N. Ameria
By Increasing Trading Volume

• Since market-making drives liquidity of the
  market, the volume of trading will increase. As a
  result, you will gain more investors. And this
  will further result in increasing the price of
  tokens. Therefore, more and more investors will
  be interested in investing in your tokens. This
  will drive the traction for your token. Your
  company will gain profit and momentum in the
  crypto market.

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Liquidity Attracts New Investors

• Liquidity in the market matters a lot for any
  investor or issuer. It keeps the trading game
  going efficiently. This means the smooth trading
  of securities is possible when the liquidity
  level of the market is apt. Since liquidity is
  the result of market-making, new investors will
  be attracted to your security token. By gaining
  more and more investors, you will make your token
  a brand and rule in the market for the long run.

N. Ameria
Finding Market Makers

• Nowadays, it is not that complex to find a market
  maker with making a simple search on Google.
  Market makers are most likely to play their role
  behind the scenes and exchange operators come in
  their contact through other means. One of the
  best ways to find them for your STO project is to
  get in touch with someone who already knows them.
  For instance, the Influential Capital team always
  knows many market makers in the town. If you know
  a person who is working in a firm offering STO
  Development Services, then it would be a great
  help for you. This way you can create your own
  network with many market makers.
• You can also attract some of the most
  professional market makers by your excellent
  marketing and PR efforts. Hire a PR firm and they
  will help you present your exchange in front of
  the most popular market makers available in the
  market.

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The Bottom Line
Now that you are aware of the fact that market
makers are undeniably important for your STO
project, you can consider finding some. They can
ensure liquidity for your token and which is
quite essential for you to survive the crypto
market. Market makers are half the battle
towards solving a thin crust of liquidity
problems faced by many startup exchanges.
Therefore, you should consider building a
long-term relationship with market makers who can
support your STO launching and success. You can
also ask for professional help from a renowned
firm that provides STO Consulting Services to
find some market makers. Such firms are closely
in contact with market makers that can help you
create liquidity and traction for your security
token.
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