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Market Making in Crypto Exchanges: An Introduction

Market makers at stock exchanges are companies or individuals who stand ready to buy and sell securities. Similarly, market makers at crypto exchanges sell and buy crypto assets on a continuous basis at a publicly quoted price. Since everbody can place an order at crypto exchanges, like e.g. Binance or BitMEX, and order execution is managed automatically, everyone can easily become a market maker. From the perspective of traders, market makers are great, since they help to find counterparties. But what is the incentive to be a market maker? How do they make a profit from providing liquidity? Basic Concept…

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