Crypto DEX Market Maker Profits Revealed by Analysts

Fri, 05/29/2020 - 12:25
Vladislav Sopov
Investor and advisor Qiao Wang from Messari, a top-level crypto analytical team, has revealed his estimate of the profits for market makers on decentralized exchanges
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Qiao Wang, Head of Product of the Messari analytical group, doubts the institutional interest in market making on decentralized exchanges

Too early for institutions

According to Mr. Wang, the yearly profit of market makers who work on decentralized exchanges (DEX) is estimated at $1M.

This sum is definitely not of much interest to institutional traders. However, there’s a segment of the crypto community that might find this opportunity to be a very lucrative one.

Mr. Wang highlighted that there’s room for progress for small teams. It takes only a couple of ‘guys who know how to code’ to grab these millions, the analyst concluded.

Messari’s Head of Product foresees a bright future for automated market making executed through trading bots. Alongside that, institutional adoption of decentralized market making won’t come soon.

Broken dreams of DEXs

In the discussion below the tweet, some traders admitted that market making on DEXs still faces many challenges, i.e. high gas fees, network congestion and tread cancellations.

API and liquidity issues are also mentioned as an obstacle for decentralized trading. This complex of demerits makes overall interest in trading on DEXs insignificant.

For example. The world-leading exchange ecosystem Binance, which also offers a decentralized trading service, Binance DEX, repeatedly reports the collapse of decentralized trading volume.

According to one of the latest Binance Global Markets reports, Binance DEX is 476 times less popular than its centralized brother.

About the author

Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockchain.

Worked in independent analysis (Crypto Briefing) as well as in start-ups (, Monoreto, Attic Lab etc.)

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