To launch a successful cryptocurrency Exchange software, it is crucial to check that your crypto-exchange has high liquidity or not. Before understanding how to gain high liquidity, lets us discuss briefly what is liquidity and why it is important?.
What is Liquidity?
Generally, liquidity is the degree whereas a digital asset can buy (or) sell for cash without affecting the cost of your asset. For the reason, the concept of liquidity in cryptocurrency indicates that exchanging orders are matched with each other in the minimum time. Higher the liquidity in your crypto-trading platform, the cost of cryptocurrency also would be high.
Let us consider, world's most popular crypto exchange platform like Binance (or) Coinbase, because of high liquidity in the platform, they are achieving to a greater extent.
What does cryptocurrency liquidity providers do?
Cryptocurrency is unstable - that is the cost may vary each day. Market makers (or) liquidity providers play an important role in keeping up the stability by enhancing the trading volume. Moreover, marketers don't work for free and they are making plenty of money from this business. They play on the price gap of cryptocurrency exchange and also chare an extra commission fee for each transaction.
Achieve high liquidity in Your crypto-trading platform:
If the liquidity is low, crypto-exchanges usually try to engage market makers by the following methods:
- Reducing the maker trading feeds.
- sharing a profit from the taker feeds.
- Provide payments to the market makers for their activity.
How to Choose the best cryptocurrency liquidity solution providers?
If you are looking for the top cryptocurrency liquidity providers, it is important to know that they can satisfy your following criteria.
Depth of Market:
Understanding market depth is an essential one. This shows the indication of the liquidity and depth for a particular cryptocurrency. The higher the number of exchange orders at each price, the higher the depth of the market.
Liquidity provider/market maker should provide a fast trade execution with requotes or slippage at the time of high impact.
A liquidity provider's price offering should include the more competitive spreads as well as low commissions and swaps with no compromises on each side.
A liquidity market maker must offer client data feeds that are more stable and reliable. The feeds of the price should reflect the real-time prices from all the relevant exchanges as well as the interbank forex market. Any kind of delay in delivering the price data may result in the gap.
Your liquidity market maker should be responsible and more efficient in completing their daily tasks. Though many deviations could happen at the time of certain circumstances. To avoid this, an automated trading server should be offered to every person who is collaborating with the liquidity providers to check the transactions.
Build Your Cryptocurrency Exchange Platform with the High Liquidity:
From the above discussion, we can understand that liquidity is an important one for any kind of cryptocurrency trading platform. We, At Osiz Technologies - A leading cryptocurrency exchange development company offers an end-to-end cryptocurrency exchange development services integrated with the high liquidity and security features.
And also, we provide white-label crypto-exchange solutions that aid to launch any kind of exchange platform within 7 days. On the other hand, we can also build customized crypto-exchange software from scratch according to your business needs.