🎯Our Strategy
The future of equitable Market Making
Last updated
The future of equitable Market Making
Last updated
Due to liquidity challenges in the cryptocurrency market, Reform's ecosystem introduces a community-driven platform that boosts liquidity through a unique, circular economy via the Bonding Treasury. The Bonding Treasury swaps are available at discounted market rates, providing the DAO with increased liquidity for Market Making. This approach not only addresses liquidity challenges but also generates revenue. These earnings are allocated for operations, R&D, and the repurchase of $RFRM. Reform utilizes two methods of Market Making with community driven approach.
As a market maker, Reform undertakes both liquidity provision and project-based Market Making, with further models under active development. Liquidity provision represents a specific aspect of Market Making, where Reform supplies liquidity to high-volume, large-cap coins. In these cases, Reform is not the primary market maker; instead, it functions as a extra liquidity provider, capitalizing on volume rebates and generated realized profits. Given that the majority of market volume tends to be around the top 100 coins, liquidity provision offers access to executing more trading volume and more frequent trades compared to project-based Market Making on the designated project pair.
Reform’s liquidity provision strategy is centered on aligning with the most active trading pairs in the market. By targeting pairs with bigger market caps and high volume, Reform ensures that it follows the momentum of the full market. Through partnerships with exchanges, Reform secures rebates tied to trading volumes. The strategy involves selecting pairs with high marketcap and volume and placing both buy and sell maker orders to provide liquidity for all traders in the asset. This provision allows for less spread of larger trades, providing high liquidity for high-demand pairs for traders, with Reform generating revenue drawn from rebates and realized profits.
Through liquidity provision, Reform is committed to fostering community-driven liquidity on the most traded crypto pairs. All trading activity is shared transparently on a 24/7 basis through the API dashboard, making sure the DAO is maintaining an open, community-focused approach. By strategically providing liquidity, Reform aims to contribute to a healthier, more resilient crypto market ecosystem, where liquidity is consistently available the essential foundation for an effective and vibrant trading environment.
Secondly Reform adopts a fair and collaborative model for Market Making, distinct from the conventional “mercenary” approach. Rather than operating as an external service provider, Reform forms partnerships with projects, taking on Market Making responsibilities for their tokens. The DAO offers two distinct frameworks for Market Making, allowing projects flexibility in choosing the model that aligns with their risk tolerance and strategic goals.
The first option, the retainer model, minimizes risk for participating projects. Under this model, Reform handles Market Making through API connections, using assets and currencies provided by the project. The monthly retainer fee paid by the project constitutes revenue for Reform, ensuring a steady, low-risk income stream for the DAO.
Alternatively, the option loan model involves Reform receiving tokens at predetermined strike prices, with Reform providing the currency for Market Making. As the contract reaches its conclusion, Reform retains any additional profits or tokens generated, which are then added to the DAO's trading treasury. This approach benefits both parties, granting the project ongoing Market Making services, while Reform grows its treasury, ultimately amplifying trading capacity and potential revenue over time.
Through these partnership-driven models, Reform fosters a balanced and sustainable ecosystem, where resources are pooled, and benefits are shared. This strategic alignment is intended to create enduring value and growth for both the projects Reform partners with and the broader DAO community.
