Animoca Brands has been offering in-house market making services for crypto startups
Animoca Brands, a web3 investment firm, has stepped up efforts to offer in-house market creation services to startups in its broad portfolio.
The Hong Kong-based company in recent months has introduced such market-generating capabilities to more than 400 projects it supports, in an apparent effort to get more projects to use the service, according to four people familiar with the matter.
Animoca offers market making services through its internal Digital Asset Team, which was formed in early 2022 and currently consists of ten employees, according to a company spokesperson. They describe it as “basically a treasury team” that also handles node setup and hedging, helping offset the volatility of Animoca's large pool of volatile tokens.
🔔Market maker role
Market making doesn't just happen in the world of cryptocurrencies. On Wall Street, similar companies play an important role in ensuring an adequate supply of liquidity for investors and traders, so that they can buy and sell shares or assets smoothly. In crypto, there are also companies that specialize in making markets for certain tokens. Token market makers provide services directly to projects, often with the goal of supporting successful market launches, robust trading activity, and reducing price volatility.
“If the asset issuer controlled the trading strategy, similar to FTT and Alameda, it would be the market equivalent of Tesla or Amazon creating its own shares. There is a clear conflict of interest with in-house trading desks in crypto because it is difficult to avoid market manipulation and insider trading restrictions,” said Matt Batsinelas, founder of Glass Markets, a provider of liquidity analysis and market making.
