Understand the basic logic of how cryptocurrency market makers operate with just one picture! In order for my brothers to better understand, I have specially created a guide and supplementary materials Market makers in the cryptocurrency industry, also known as market capitalization teams, mainly provide market capitalization management services to project parties. Their job responsibilities mainly include two aspects: 🚩 One is to maintain currency price stability. 🚩 The second is to assist the project team in making efficient profits. One is to stabilize the project currency price. Simply put, it means ensuring that the price of the same currency remains stable across different trading pairs and exchanges, preventing external parties from exploiting price differences for arbitrage. For example, currency AAA may have multiple trading pairs such as AAA/USDT, AAA/BTC, AAA/ETH, while other exchanges may only have one trading pair, AAA/USDT. This requires market makers to conduct cross platform market value management to ensure that prices remain relatively stable across all platforms. The second is to assist the project team in making efficient profits. Market makers will use some relatively optimized strategies to help project parties achieve profitability. For example, market makers need to consider factors such as determining at what price to smash or raise, to what extent to sell, how much to ship, and what kind of positive news to combine with when shipping. The profits of cryptocurrency market makers mainly come from three aspects: One is the maintenance cost, The second is profit sharing, The third is the difference in handling fees. Of course, there is also a fourth type (insider illegal arbitrage, such as the MOVE project market maker who sold 66 million tokens and illegally profited 38 million U during the Binance cleanup) Due to the large trading volume and continuous provision of liquidity to the exchange, market makers have much lower transaction fees than ordinary users, and the difference in transaction fees is also one of the sources of profit. This also explains why some exchanges will form their own market making teams and require project parties to designate market makers to keep profits within their own systems. In addition, some market maker teams have their own quantitative trading capabilities or have quantitative departments, and the profits from quantitative trading also constitute a part of the market maker's profits. There is a significant difference between cryptocurrency market makers and traditional stock market market makers. If you search for cryptocurrency market makers on Baidu, the information obtained often belongs to different industry categories. Under normal circumstances, the profits of market makers are quite considerable, and their main sources of funding include project entrusted funds and self owned funds. In the cryptocurrency industry, it is common for a market maker to undertake market making business for dozens or even hundreds of project parties due to their background, funding, or technological advantages. Due to the large number of projects, market makers usually adopt a unified strategy to carry out market making work. This leads to altcoins and even air coins often showing a trend of rising and falling together with Bitcoin, because the market making strategies adopted by everyone are roughly the same. (Some of the popular science content was shared by Brother Conscience, thank you very much)