Multi-Exchange Steem Market Maker - Reposted from Creator account in order to submit the proposal
Introduction
The confidence of investors in an asset increases when there is large trading liquidity of the asset across most channels where it is traded. An attempt to enhance trading volume, without manipulating the price in either direction, is a legit market making activity.
The figure below shows price-volume trend for Steem for last one year.
source
On average volume traded for Steem is very low and in the range of <1mn$. One can also see that price normally trades higher when trading volume increases.
Objective
The objective of the proposal is to code and deploy a market maker. The market maker will operate across multiple exchanges with the objective to increase trading volume while consistently trying to reduce the cost of market making by exploiting arbitrage opportunities to offset the exchange trading fees. A weekly update of the performance will be posted to Steem Blockchain.
Team
@prameshtyagi is a veteran steemian. He is an expert on crypto market and has been consistently developing various trading and investment strategies. The details of his credentials are are listed at the end of this post.
Benefits to Steem Ecosystem
With increase in trading volume the visibility of Steem will increase among investors, traders, and exchange owners. More exchanges would come forward to list Steem on their exchange thereby making it accessible to their users. Many of those users could convert to investors.
Use of Funds
The funds will be used for following purposes:
- Monthly expenses - Monthly expenses are expenses to host the market maker code on Algorithmia through AWS. Apprx 100$ per month equivalent Steem tokens.
- Market Making - Remaining funds available in the account will be transferred to the selected exchanges for market making activity
- Coding and Strategy - Most of the code is already available. However, a week of efforts are required to customize. Also strategy modifications will be implemented through continuous monitoring of the performance. Any profit generated through market making will be taken as coding and strategy expense.
Project Take off Condition
Minimum funds required for project to take off are :
- Ten months of Monthly Expenses = 2000$ = 12000 Steem
- Minimum Steem required for Market Making for 5 Exchanges = 50000
So a total of 62000 Steem. As and when there are this many steem in account -the project will start and market maker will be deployed with in 15 days.
Performance Criteria
Key criteria to monitor and improve the performance of the market maker are:
- Total Steem Traded per month
- Total Steem lost/gained per month
- Steem Volume traded per Steem per month
- Steem Lost or gained per Steem volume traded per month
- Steem Lost or gained per Steem per month
Actions To be Taken
- Create a separate account with name @steemmm - done
- Post proposal - done
- Campaign for the proposal - ongoing
- Wait for threshold funds
- Customize the available code
- Open accounts for steemmm with selected exchanges and transfer funds
- Deploy the code
- Make weekly performance/modifications post
Feedback from other experts who are willing to collaborate are welcome to improve upon the proposal as well as the development and execution of the efficient market making strategies.
Credentials of prameshtyagi
FToken Mining using AutoTrading or MarketMaker Bot
Crypto Assets Price Prediction Using AI : Buy or Hold or Exit
My work in the field of Artificial Intelligence - Episode 4 (2015-2017)
Github
He is also the owner and CEO of ActnEarn. ActnEarn is a steemengine token that is working to build a community of micro influencers.
I really like this idea...
But why do you want 100 SBD daily pay when you only start working when you have all the funds required in the account? That means waiting at least 130 days before you can start... (at current prices you will need approx. 13k SBD.)
No one guarantees that the funding will last that long and it is 130 days of wasted time.
I think 1000 SBD daily pay would be a better fit. (13 days of funding before you start)
If that is to high go 500 SBD.
I don't know if the proposal funds can be edited after posting?
I understand the concern for long period to get funded. However, there are many other projects that will be competing for the funds and it will be really difficult to get 1000SBD or even 500 SBD a day payout. I am just assuming. I do not know how funding for projects will evolve.
If I see that project is being liked, voted and funded then with community input and support, if existing proposal can not be amended, then I will create new proposal with higher payout request.
Thank you for raising the issue.
I agree with you you are right
Hello Sir,
It would be good to see the details for existing trade volume of STEEM in the Exchanges you intend to deploy Market Maker. What are those Exchanges and how much increase in the trading volume (in %age) over current volume you project with the help of 50000 STEEM?
What is the criteria that led to 10 months of initial reserve expenses. What's the plan to sustain it after 10 months?
Who will bear losses incurred, if any, through market making activity?
These are some of the things I was pondering over before voting on this proposal.
Those exchanges hold millions of STEEM. The increase in volume will not be monumental but any increase will be good and the liquidity of STEEM on those exchanges will go up.
This will make the exchanges like STEEM more and investors would not need to fear liquidity shortages.
I suggest he tries it for a few months and if he is successful, he can ask to triple the money for the project once he has shown that he is doing good.
The picture above shows the trading volume on different exchanges. These are really low volumes.
Below is a good read on many issues and practices on market making.
https://hackernoon.com/a-guide-to-market-making-for-crypto-startups-jydr387v
Thank you for asking great questions.
The price of steem and volume are dropping each day. 290K is traded volume today. Pathetic for such a great project.
will you stellar anchor it?
what do u mean??
in stellar you can have tethers to fiat and cryptocurrencies and then easily and cheaply trade them between all of them. stellar is a hard fork of ripple and many companies use it also to make bank transfers more efficient. if there was a stellar network to steem link it would provide us a cheap decentralized exchange, if we fix the SBD exchangerate to the dollar value, through triangular trade between SBD steem and stellar people are incentiviced to keep the SBD value at 1 dollar. these exchanges between stellar and currencies are called anchors.... people from other networks will have it then easier to come to steem. it would fix steem dollar, steem liquidity and steem value...
You got 80% upvote
I didn't understand