Risk Mitigations

Why Market Making is More Secure than Simple Token Buying

Market making offers a balanced and strategic approach to cryptocurrency investment, providing enhanced security and reduced risk compared to simply buying project tokens. Here’s why:

1. Balanced Exposure

When engaging in market making, we typically maintain only 50% exposure to a token or coin and 50% to a stablecoin. This dual exposure ensures that if the market moves up or down, our risk is mitigated, and we still benefit from trading fees.

2. Earning Trading Fees

In the decentralized world, market making allows us to earn trading fees, which average around 0.2% of the daily volume, based on the amount of liquidity provided by us. This steady income stream helps in managing risk and providing returns.

3. Positive and Negative Market Movements

• Market Uptrend: When the market goes up, we benefit from positive exposure to the token or coin.

• Market Downtrend: If the market goes down, we still earn volume fees from the trading activities, ensuring a continuous revenue stream.

4. Diversified Investment Strategy

Our core strategy is to avoid excessive exposure to a single token, coin, or blockchain. We achieve this by diversifying our volume across several chains and investing in top tokens or coins. This approach reduces risk and enhances security.

5. Secure Storage

We prioritize the security of our investments by using multisig wallets such as Gnosis Safe, along with hardware wallets. These wallets are audited and reported, providing an additional layer of security.

6. Strategic Allocation

Our investment strategy is carefully structured to minimize risk and deliver the best possible results:

• 50% in Top 25 Tokens and LP Provision

• 20% in Market Making Projects

• 15% in Newly Listed Tier 1 Exchange Projects and LP Provision

• 15% in High Liquidity Low Cap Tokens

7. Risk Mitigation Summary

• Balanced LP Exposure: 50% token, 50% stablecoin

• Steady Income: Trading fees from daily volume

• Strategic Diversification: Across multiple tokens, coins, and blockchains

• Secure Storage: Different Multisig and hardware wallets for different allocations and chains

By adopting these risk mitigation strategies, we aim to reduce risk as effectively as possible and deliver the best possible results for our liquidity providers.