KYIV — WhiteBIT published a guide on Tuesday detailing how cryptocurrency founders can manage order book stability through structured market making programs. The firm noted that issuers often face erratic transaction patterns when they fail to implement liquidity solutions within the first 30 days of a token launch. Without these systems, order books frequently display uneven levels and empty zones that disrupt trading activity.
The company stated in a report released on Wednesday that liquidity providers are essential for maintaining constant market operations. These entities utilize 24-hour systems to adjust for volatility, ensuring that price reactions remain predictable for investors. WhiteBIT emphasized that these providers are distinct from basic automated bots, as they require dedicated teams to monitor trading behavior around the clock.
Technical infrastructure remains the primary factor in determining the success of a market making strategy, according to a WhiteBIT internal document dated October 2023. A program is considered ineffective if the underlying system fails to respond to market changes within a fraction of a second. The firm warned that founders must prioritize this technical backbone over marketing claims of deep liquidity or narrow spreads.
Founders should evaluate the effectiveness of their chosen program by monitoring price behavior for erratic spikes, the company said on Thursday. Successful implementations result in order executions that align with expected prices at least 95 percent of the time, according to the firm’s performance metrics. The document suggests that these practical results are more reliable than the numerical presentations often provided by vendors.
The company plans to release further guidance on managing market pressures by the end of Q4 2024. This upcoming update will focus on how issuers can prevent the rapid decline of program effectiveness during periods of high volatility. WhiteBIT did not disclose the specific costs associated with its own liquidity services in the current filing.
