Multi-Exchange Steem Market Maker | Ecency

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.