BitHappy
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Do cryptocurrencies need market makers?
Market makers provide both buy and sell quotes, creating a token trading service provider with liquidity and depth.
➬ There is no market maker, the trading depth is insufficient, users cannot sell tokens at the holding price, nor can they buy the required number of tokens, which increases transaction costs
For example, in an order book-based transaction, if you want to buy 10 tokens, if there is a market maker that provides sufficient liquidity and the price of each token is 4000U, you only need to spend 40000U to buy 10 tokens; on the contrary, if there is no market maker to guarantee sufficient liquidity, the possible situation is 5 sell orders of 4000U and 5 sell orders of 5000U, and your purchase of 10 tokens will cost 45000U, which is 5000U more than with a market maker.
➬ There is no market maker, the trading depth is insufficient, users cannot sell tokens at the holding price, nor can they buy the required number of tokens, which increases transaction costs
For example, in an order book-based transaction, if you want to buy 10 tokens, if there is a market maker that provides sufficient liquidity and the price of each token is 4000U, you only need to spend 40000U to buy 10 tokens; on the contrary, if there is no market maker to guarantee sufficient liquidity, the possible situation is 5 sell orders of 4000U and 5 sell orders of 5000U, and your purchase of 10 tokens will cost 45000U, which is 5000U more than with a market maker.
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