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

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

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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. – PowerPoint PPT presentation

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Title: 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.

5
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.

6
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.
N. Ameria
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Thank You
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Espay Exchange
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