Our approach
Explaining Flowdesk's approach to market making
Flowdesk Market Making
Flowdesk is a leading market maker for token issuers, exchanges & institutions. We improve liquidity on CEX and DEX using proprietary technology and transparent trading infrastructure. Partners can access a bespoke analytics platform to monitor real-time liquidity metrics with complete transparency. We are client-first, structuring market making agreements that align incentives with the token issuer.
Flowdesk offers two market making models:
Market Making as a Service (MMaaS)
Loan / Call Option
Market Making as a Service (MMaaS)
Flowdesk's Market Making as a Service offers a plug-and-go tech solution for token issuers to manage their liquidity and trading strategies on both centralized and decentralized exchanges, providing global coverage for their market-making needs. Our low-latency, 24/7 technology and trading infrastructure allows clients to build and actively manage their own liquidity, adapt their strategies in response to changing market conditions and business needs, and receive guidance from our team throughout the process.
Our algorithms constantly renew orders around the mid-price to incentivize traders to execute larger trades, while liquidity distribution adjusts automatically to optimize clients' market-making P&L and ensure a healthy expected return on trading collateral. We also harmonize prices across exchanges, capture arbitrage opportunities, and enhance overall market structure, providing additional P&L for our clients.
We are fully compliant with strict conflict-of-interest, KYC, and AML policies and provide transparent daily and monthly reports, as well as live dashboards for asset valuation. Our service is cost-efficient, allowing clients to retain control of their capital, strategy, and P&L.
In addition to market making, Flowdesk also offers OTC (“Over the Counter”) Trading for crypto-to-fiat or crypto-to-crypto settlements, custody solutions for safe asset storage and management, and treasury management options for generating returns on crypto balance sheets often unused. Our service is connected to more than 120 exchanges, including Coinbase, Binance, OKX, KuCoin, Uniswap and more, as well as multiple blockchain networks. This allows clients to easily access, provide, and manage liquidity on a wide range of platforms.
Table of key features
Feature | Description |
Low-latency trading infrastructure | Flowdesk's market-making service uses a low-latency trading infrastructure, which allows clients to execute trades quickly and maintain control of their tokens and trading strategy at all times, in a safe, controlled and transparent environment.. |
Active liquidity management | Flowdesk's technology allows clients to trade their own liquidity and manage it actively. This means that clients can maintain control of the liquidity they provide, a key feature for cryptocurrency issuers who want to retain control of their assets. |
Adaptable trading strategy | Flowdesk's technology helps clients remain flexible and agile in adapting their trading strategy to various market conditions and business needs. |
Support at each stage of the token journey | Flowdesk offers guidance at all stages of a project. This can be useful for token issuers who are new to the market or who may need help navigating the complex world of digital asset trading. |
Compliance by design | Flowdesk is compliant with all relevant regulations and enforces strict conflict-of-interest policies. We are future-ready by design and are registered as a Digital Asset Service Provider with the French financial markets regulator (Autorité des Marchés Financiers, AMF) for the custody, sales, and trading of digital assets. |
Transparency through dashboards | Flowdesk provides transparent reporting and live dashboards, so that clients can monitor their assets and trading activities in real time. |
24/7 liquidity | Flowdesk's market-making services are up and running 24/7, which means that liquidity can be provided to the market at all times. This can help to reduce volatility and make it easier for traders to buy and sell the issuer's assets. Our SLA on uptime is 99%, and we have teams in US, EU, and APAC |
Connection to multiple exchanges | Flowdesk is connected to more than 120 exchanges, both centralized and decentralized. This allows clients to provide liquidity to a wide range of trading platforms and capture potential arbitrage opportunities. |
MMaaS vs. Loan/Call Option
There are two primary models for providing market-making services: Market Making as a Service (MMaas) and Loan/Call option. In this section, we’ll compare and contrast these two models to highlight their key differences.
Loan/Call Option
In a loan/call option model, the market maker generally borrows a percentage of the client's token supply as collateral for their market making activities with an associated call option. The market maker defines the liquidity strategy and maintains market making PnL associated with trading.
Key features:
The market maker uses issuer’s token and the equivalent from its own funds as collateral for the pair.
The market maker defines the liquidity strategy.
The market maker keeps any PnL made from trading.
The market maker is incentivized by the token price and P&L generated from trading the client's token.
The primary downside of loan/call option models for token issuers is that it can limit the issuer's control over their token. Because market makers are independent entities that define their own strategies and objectives, they may make decisions about trading the issuer's token independently.
For example, a market maker may make decisions about the size and timing of their orders. In addition, if the market maker incurs losses, the token issuer may be affected by these events, even if they were not directly involved.
Market Making as a Service (MMaaS)
In the MMaaS model the client retains control over their own tokens, collateral, and strategy. They can adjust the liquidity strategy as needed and own the potential PnL from market-making activities.
Key features:
The client retains control over their own tokens and collateral.
The client can adjust their liquidity strategy on demand.
Fixed monthly retainer.
Profits from market-making activities are shared with the client.
Full transparency in reporting.
The market maker is incentivized by market-making performance (through uptime and client trading strategy).
Flowdesk's approach
The role of a market maker is to be a counterparty for buying and selling, ensuring that there is always a relatively fair price available for trading. This is especially important for smaller projects, which may not have a large enough user base to provide consistent liquidity. Without market makers, it can be difficult for users to find counterparties to trade with, leading to a poor user experience and diminishing investor participation/interest.
Regardless of the market making model chosen, Flowdesk guarantees a bid-ask spread on a given exchange, with a given uptime and depth. This means that we maintain a certain difference between the best price to buy and the best price to sell a given token. For example, we may guarantee that the price difference between the best buy and sell prices for token XYZ is within a range of 0.1%, and that this will be available 99.5% of the time. The remaining 0.5% is reserved for extremely volatile times. This helps to ensure that users can consistently buy and sell tokens at a fair price.
The crypto industry faces a number of challenges, such as a lack of regulation and transparency as well as high fees. Flowdesk aims to address these challenges by offering fair pricing models, unrivaled account support, and a user-friendly platform. This enables us to provide a high-quality market-making service to token projects, exchanges, and other clients.
Table of key differences
Feature | Loan/Call Option | Market Making as a Service |
Pricing | % of tokens lent out + call option for MM | Monthly retainer |
Liquidity management | MM defines the strategy | Client defines the strategy |
Control over the strategy | Market maker | Client |
Potential profit sharing | No | Yes |
Transparency | Limited – dashboard + static reports | Yes – live dashboards |
Cost | Minimum zero Max infinite | Fixed agreed monthly fee High control on costs |
Market-maker’s incentive | Token price and P&L generated from trading | Market-making performance |
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