This is a great announcement of our new product and service. We invented a completely new approach of setting up markets. In this article we will tell you about the model of a transparent market-making, natural ways of attracting liquidity to the cryptocurrency exchange, and creating a full-fledged exchanger within Waves DEX. This is not a theoretical material, but an example of using our tool in practice. If all this sounds appealing to you, then we wish you a pleasant reading!
It has been quite a long journey. Constant searching for solutions and right people, thousands of lines of code and hundreds of liters of coffee. And, finally, this day has come. Today we would like to introduce you our product: a fully automated system for setting up markets for Waves DEX.
A bit of theory
Let’s say you are launching an ICO or maybe you have already done it. There will come a time when you have to put your token for sale on the cryptocurrency exchange. Moreover, if your project is not a scam project, then you not only have to sell, but also you have to redeem your tokens. Of course, you want to buy and sell your tokens not only for WAVES or/and BTC, but also for the maximum of the most popular altcoins, such as ETH, LTC, BCH, ZEC, DASH, XMR, etc. The more trading pairs (markets) your token has, the more entry and exit points you give to the owners of your token. Big deals will still be held off-line for a while, but this issue can be fixed easily with the implementation of smart contracts on Waves DEX in the MAINNET.
One of the great opportunities that Waves DEX opened was a complete market freedom. You no longer need to pay the exchanges for listing your token, you just issue a token and trade in pairs to any other assets: to top tokens, tokens of your partners and so on. However, it is almost impossible to do this manually.
Let’s say you want to trade your token in pairs with WAVES, BTC, ETH, LTC, BCH, ZEC, and DASH. You have to make 7 different markets, i.e. place 14 orders: 2 orders in each of the markets (one SELL and one BUY). And we are talking about the case when you want to place just 2 orders per market. And what if you want to make your market more filled and place 2 order for sale and 2 orders for purchase? Then it will be 28 orders already. Are you sure you are ready to sit with the calculator and count 28 orders and then place them all manually? What if one of the 28 orders is filled, then how to recalculate everything? What if the price of Waves to BTC or ZEC to DASH has changed?
Well, from that very moment the UniMarket tool can make all of this (and even more) for you.
The essence of UniMarket
UniMarket is a business solution for companies that are determined to play fair and for a long time. It does not suit for those who issue scam-tokens, because we are strongly against the scam in any form. We do not want to flood the exchange with illiquid garbage markets and make people who invested in such tokens vulnerable, even unintentionally. Therefore, we have built in algorithms that continuously analyze a wide variety of parameters, and if a scam activity is detected (an attempt of a pump or dump, a sudden additional emission, etc.), then our software immediately cancel all orders and stop trading, until the situation becomes clear. But first things first.
We truly believe that if a company has raised funds during an ICO, then it is company’s responsibility to maintain an open and honest dialogue with the investors. We can endlessly count projects that have been pumped and dumped on the centralized exchanges with fake orders and counterfeited depth of market, followed by scammers escape along with the cash, of course. However, this approach is not going to work here. The price of the token that is set up by the UniMarket tool is strongly tied to the deposit placed on the exchange. At any given moment investors can go to the Explorer (very soon they will be able to use our UniList product for that as well) and see how many tokens are in turnover and how big the real deposit is. We do realize that this will turn away 90 out of 100 of our potential clients, but this is our conscious decision. Markets must be transparent and fair. The issuer of the token is obliged to provide the market with liquidity to maintain the token price.
To set up markets of your token to different assets, such as BTC, WAVES, ETH, etc., you need to constantly keep deposits in these assets. In addition to this, investors buy and sell your token for different assets, and, as a result, you have to continuously balance the liquidity of the entire portfolio across all assets. Obviously, this is quite taught task. However, we have already found a solution to this problem: we came up with UniBot! This tool perfectly deals with the diversification of the portfolio during profitable trading. So, let’s apply this technology to the UniMarket tool. Why not?
It does not matter what asset an investor uses to acquire your tokens. The UniMarket software constantly balances the entire portfolio to ensure that there is a sufficient quantity of a particular asset for continuous trading. There is no need to refill, for example, the ETH or BTC balance, if they have run out. UniMarket will do everything for you!
An experienced Waves DEX trader has probably already noticed the issue: how to balance deposits of top assets on Waves DEX? If someone bought your tokens for ZEC, for instance, then you need to exchange a part of ZEC tokens for all of your portfolio assets. Unfortunately, such markets like ZEC/ ETH or LTC / BCH, etc. do not exist on Waves DEX: either there are no orders or there is an unfair price with a huge spread. How can I exchange ZEC for ETH or DASH? It is very inconvenient and expensive to do these conversions via BTC or WAVES. Luckily, UniMarket has the answer to this issue too.
Cryptocurrency exchange point
That is right, UniMarket creates its own exchange point of all the assets from its portfolio. Let’s suppose that you also want to trade your token for WAVES, BTC, ETH, LTC, BCH, ZEC, and DASH. 7 markets in total. To balance the portfolio, the UniMarket tool calculates and makes not only 7 markets of your token to each of the top assets, but it also makes 21 (!) markets of these top assets. If the market already exists, like WAVES/BTC for example, then UniMarket trades tokens at the current exchange price. If there are no markets yet, for instance ZEC/ ETH or LTC/ BCH, it creates such markets and calculates the token prices by itself. However, it is not always possible to calculate a fair price of an asset based on the prices of a particular cryptocurrency exchange. When such a situation takes place, then the UniMarket tool refers to other exchanges and figures the prices out.
Our top priority is to make UniMarket safe and secure. UniMarket has its own node that serves as a core of its infrastructure. The node is running on a high-capacity server in the Amazon EC2 cloud. Several computing instances, bot engines and few other infrastructure elements are located together with the node within a single cluster.
Having our own node gives us an uninterrupted source of information on everything that happens inside the Waves blockchain. At any given moment, we have a comprehensive picture of all wallet addresses, transactions, balances, etc. This allows us to quickly track any activities happened to the wallets and immediately respond to any transactions, including those aimed at destabilizing the markets.
By offering such a powerful solution, we share the responsibility that previously was entirely on the token issuer side. We guarantee we suppress any attempts to use our solutions in bad faith, we discourage pumps and dumps, and give the investors a single point of control over the state of their token being traded, including its emission, turnover and supply.
These software features make the UniMarket an ideal point of attracting liquidity to the cryptocurrency exchange, as well as for investing in promising tokens through the exchange.
We create transparent markets, open cryptocurrency exchange points and fill them with liquidity. In addition to this, UniMarket has another interesting feature that deserves to be told separately.
Continuous increase of supply
We combined UniBot technology with UniMarket to profit from trading the liquidity provided as a token supply. UniMarket does not just sets markets up and balances the portfolio’s deposits, but it also actively trades on the exchange and continuously receives profit from trading operations. This naturally leads to an increase of the token price to all assets, even when there are no trading operations with the token itself.
Today, for the first time, we have tried our theory in practice. We have implemented our first case on the Waves DEX - market making of KolionPlus.
Market-making in a nutshell
Token KolionPlus (ID = 6a51WJiyF59YTyPo8VzR7xA12EFsbiVT2NG8BXJ2otNm) is the official fork of the original Kolion token (ID = EYz8Zvs62D4d7F5ZgXHCWuzuFaZg63FYnfVQrTWQoLSK) with its own ticker KLN.
The token is traded in pairs with 7 assets: WAVES, BTC, ETH, LTC, BCH, ZEC и DASH.
Currently, the liquidity with a volume of about $45,000.00 is used as a token supply on the exchange. The supply is distributed among all the assets.
UniMarket trades KolionPlus deposit in all top assets markets, including those that were empty before the system was launched. As a result, the KolionPlus deposit is traded in the following pairs:
WAVES/BTC, ETH/WAVES, LTC/WAVES, BCH/WAVES, ZEC/WAVES, DASH/WAVES, ETH/BTC, LTC/BTC, BCH/BTC, DASH/BTC, ZEC/BTC, DASH/ZEC, DASH/BCH, DASH/LTC, DASH/ETH, LTC/ZEC, LTC/BCH, LTC/ETH, ZEC/BCH, ZEC/ETH и ETH/BCH.
The 21 main asset markets of the exchange are filled with the liquidity that came from the KolionPlus deposit. In addition to this, there are 7 markets of the KolionPlus itself.
Totally, the liquidity of the token is present and traded in 28 Waves DEX markets at a time.
The token price is tied to the deposit. This means that it is the responsibility of the issuer to:
- Provide UniMarket with a sufficient amount of liquidity for buying huge amount of tokens thrown on the market simultaneously;
- Provide UniMarket with a sufficient volume of tokens in case of increasing demand.
All actions of the issuer can be traced in the Waves DEX blockchain and, if any questions arise, contact them in the official information channels of the issuer.
For the testing period, we set up a little overvalued spreads (1-3%), but after the completion of all tests, the spreads may be narrowed near to zero.
What is next
We will keep on adding new features to our system, improving existing solutions and creating new ones. Market-making on the Waves DEX is just one of the products we are currently working on in order to achieve our global project goals. Market-making of the KolionPlus token is just one showcase from the series that we collect for our company’s portfolio.
How much does it cost
UniMarket is a commercial product for businesses. The final prices for market making service will be published very soon on our website right after we finish public testing of our software. All prices will be bind to the WAVES token, and so, if you are planning to use our services, you may need to buy Waves. Waves platform is quite a profitable investment.
On the 8th of July we will give away 100 KolionPlus tokens to people who leased waves to our node as a partner bonus. It means they will get Waves, MRT tokens, and KolionPlus tokens as a reward for the mined blocks. The amount of received tokens depends on the amount of WAVES they provided for leasing before the 8th of July and the amount of time their WAVES participated in mining before the air-drop. You can hold the tokens you got or sell them on the market we have just made. 100 KolionPlus tokens are equal to 39 Waves according to the current exchange price. Good luck!