0x Project Introduces 0x Market Maker Program, an Ethereum-based Tool for Market Liquidity

By January 8, 2019Ethereum
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The Ox Market Maker Program has officially been launched. Market Makers play an important role in the Ox network and DeFi stack. This is because they offer the liquidity needed for an efficient market. This program has a goal of bringing liquidity to Ox by offering tutorials, dedicated support, and monetary incentives.

Why You Need to Market Make On Ox

Various benefits exist for market making on the Ox relayers. One of them is that you get first-mover advantage. This simply means that market makers are able to plug into the open order book relayers ad capture spreads. They are also able to identify arbitrage opportunities, which do not exist on other centralized exchanges.

Another benefit is that users get access to new markets. Via Ox, MMs are able to trade new kinds of assets on platforms such as NFT marketplaces and predictions markets.

There is also the fact that this is a non-custodial exchange. Central exchanges require users to create an account, transfer their funds, and trust the owners to control their deposits securely. On Ox, it is the opposite; traders have full control of the digital assets, which ensures there is no counterparty risk.

There is also the issue of network liquidity. MMs are able to utilize a pool of capital on various relayers to trade against huge groups of the takers. When orders are placed on a relayer, they can be mirrored onto the others globally. The users of the Ox instant fill these or they are used on the other DeFi apps such as dY/DX’s Expo or Dharma.

Finally, users benefit from low costs when trading. Unlike other protocols for exchanges, the market makers pay no gas fee for the Ox orders. Thus, traders will only have to incur a cost for the bulk cancellations.

Understanding The Ox Market Maker Program

Since the Ethereum network powers Ox, the main challenge for MMs to trade is that they have to understand the working of the blockchain. Traders have to receive education on how they can manage nodes, monitor a mempool, fetch relayer orders, and much more.

The program has various important tutorials that show market makers how the Ox and Ethereum work. The tutorials extensively cover the differences between trading on a central exchange versus trading on a decentralized exchange. Additionally, they explain risk management and how to use developer tools for the deployment of bots designed for DEX.

The core team at Ox will offer 1:1 onboarding help to aid market makers understand the tutorials. This way, they can catch up as fast as possible. The engineering team can be found at the Discord chat where they answer various questions.

Besides continual support and education, Ox compensates market makers via the Program. Applicants who are approved will get $15,000 for creating and running a market-making bot on the relayers. They have come up with a well-structured incentive structure. The Market Maker Program is one of the first steps for offering resources to get more market makers on the Ox system.