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Restarting my market-making operation in crypto trading $millions in volume

I'm a solo founder that's about to restart market-making operations in crypto. I plan to go ahead and build in public back to its former glory of a few million traded in volume per month.

What prevented me from scaling my operation last time?
Well, crypto is a messed up ecosystem and with missing regulations on the exchange side, there's the counterparty risk that the exchange is messing up with your money that's parked in there. Long story short, I got screwed with 2 exchanges that ran with my money coinflex and recently, ftx.

My goal is to build back my market-making operation

I'll start small, trading a few $$$ per day with algo trading and build back my whole operation step by step.

First of all, what is a market maker?
A market maker is a firm or an individual who provides liquidity in the securities/crypto market. This allows buyers and sellers to transact without waiting for a better price. Market makers earn a commission for their services.

How is market-making in practice

This is one of the definitions, but I'll try to explain my model more simply, I'm looking at the same pair, let's say ETH/USDT when it has a different price between 2 exchanges. Buy in one exchange where it's cheaper and sell it in the other exchange where the price is expensive.
The difference in price between the 2 exchanges or between the bid and ask is called spread.

How is this done usually?
In the centralized exchanges (CEX), you'll be fighting over a few cents for every ETH traded and you need to be fast (less than 10ms) while in the decentralized exchange you have up to 2+ seconds to react to a price movement which is way more forgiving. It may not seem like much, but it's a 200x difference and in terms of hardware you can go much cheaper.

The decentralized exchanges (DEX) need someone to adjust the price to the fair market value and that's where I come in with my algorithms. I take the volatility out of the CEX and bring it to the DEX, earning a small commission like 0.1% for the volume traded.

How can I prevent going under when another exchange will implode?

The counterparty risk is still here no matter with what exchange I'll go, while I can't fully block this risk I can do something that prevents me from going under again. Instead of going with low leverage as I did in the past, this time I'll use it to my advantage, keeping my money on chain and leveraged in the exchange side 20/80 or 10/90.

Follow my journey as I'll try to publish my bi-weekly progress on how this is going.

My website: https://asset.plus/

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