The confidence of investors in an asset increases when there is large trading liquidity of the asset across most channels where it is traded. An attempt to enhance trading volume, without manipulating the price in either direction, is a legit market making activity.
The figure below shows price-volume trend for Steem for last one year.
On average volume traded for Steem is very low and in the range of <1mn$. One can also see that price normally trades higher when trading volume increases.
The objective of the proposal is to code and deploy a market maker. The market maker will operate across multiple exchanges with the objective to increase trading volume while consistently trying to reduce the cost of market making by exploiting arbitrage opportunities to offset the exchange trading fees. A weekly update of the performance will be posted to Steem Blockchain.
@prameshtyagi is a veteran steemian. He is an expert on crypto market and has been consistently developing various trading and investment strategies. The details of his credentials are are listed at the end of this post.
Benefits to Steem Ecosystem
With increase in trading volume the visibility of Steem will increase among investors, traders, and exchange owners. More exchanges would come forward to list Steem on their exchange thereby making it accessible to their users. Many of those users could convert to investors.
Use of Funds
The funds will be used for following purposes:
- Monthly expenses - Monthly expenses are expenses to host the market maker code on Algorithmia through AWS. Apprx 100$ per month equivalent Steem tokens.
- Market Making - Remaining funds available in the account will be transferred to the selected exchanges for market making activity
- Coding and Strategy - Most of the code is already available. However, a week of efforts are required to customize. Also strategy modifications will be implemented through continuous monitoring of the performance. Any profit generated through market making will be taken as coding and strategy expense.
Project Take off Condition
Minimum funds required for project to take off are :
- Ten months of Monthly Expenses = 2000$ = 12000 Steem
- Minimum Steem required for Market Making for 5 Exchanges = 50000
So a total of 62000 Steem. As and when there are this many steem in account -the project will start and market maker will be deployed with in 15 days.
Key criteria to monitor and improve the performance of the market maker are:
- Total Steem Traded per month
- Total Steem lost/gained per month
- Steem Volume traded per Steem per month
- Steem Lost or gained per Steem volume traded per month
- Steem Lost or gained per Steem per month
Actions To be Taken
- Create a separate account with name @steemmm - done
- Post proposal - done
- Campaign for the proposal - ongoing
- Wait for threshold funds
- Customize the available code
- Open accounts for steemmm with selected exchanges and transfer funds
- Deploy the code
- Make weekly performance/modifications post
Feedback from other experts who are willing to collaborate are welcome to improve upon the proposal as well as the development and execution of the efficient market making strategies.
Credentials of prameshtyagi
FToken Mining using AutoTrading or MarketMaker Bot
Crypto Assets Price Prediction Using AI : Buy or Hold or Exit
My work in the field of Artificial Intelligence - Episode 4 (2015-2017)
He is also the owner and CEO of ActnEarn. ActnEarn is a steemengine token that is working to build a community of micro influencers.