Market Maker on the Collectible Numbers market

We have already mentioned the correlation TON Price in $—Floor Price in TON. Also, in another posts (1,2), the Market Maker was mentioned. Today, we would like to describe in more detail what goals the market maker pursues in this market.

Why is this necessary? Understanding the basic fundamentals of the market, you can maneuver like a surfer on the waves, earning not only in bull markets, but also in bear markets, thereby multiplying your profit.

What goals does the market maker pursue:

1. Providing liquidity.
Numbers are one of the most liquid NFT collections on the TON blockchain.
Here you can see the volume of trading numbers for all time. As you can see, the number of purchases and sales remains approximately at the same level, which indicates that the market maker is actively participating in daily trading volumes. Only the average price and, accordingly, the trading volume increase, which results in point 2.

2. Gradual increase in the price of numbers in $.
For example: May 12, 2023 Floor Price 100 TON, TON $1.95 = $195;
March 25, 2024 Floor Price 100 TON, TON $5 = $500.
But no growth happens without healthy corrections, which results in point 3.

3. Shaking out weak hands.
The gradual increase in the price of numbers in $ occurs in cycles of cheap TON — expensive numbers in TON, expensive TON — cheap numbers in TON. Crypto is a zero-sum game, when your win is someone else's loss and vice versa.
For example: August 11, 2023: Floor Price 380 TON, TON $1.3 = $494;
26 March 2024: Floor Price 90 TON, TON $5.39 = $485.

4. Reduction of the free supply of TON (deflationary mechanism).
For example, you bought a number for $400 (300 TON) in August 2023 and sold it for $500 (100 TON) in March 2024. You rejoice in the $100 you earned (+25%), forgetting that you reduced your TON amount by 3 times (-67%) compared to if you had simply held TON during this time. You lost 200 TON, thereby potentially reducing the pressure on the order book and making it easier for the Market Maker to pump up the TON price.

5. Protection from Pump&Dump schemes.
Protection against a sharp fall (automatic buyback and therefore maintaining the price at the minimum required level) and against sudden growth (building walls) was described in this post.

6. Marketing: creating successful stories of earnings by advanced investors, which only fuel the feeling of FOMO and create excellent opportunities for marketing. Imagine that you have 100 numbers and you can increase your collection by 2-3 times without investing a penny. This is possible if you understand how the market works.

A good or a bad market maker? This is a full-fledged market participant. Is the dealer in the casino good? — "Yes, only after his hands do I win" — you say. But, having entered the casino, you accepted its terms, including the fact that you can lose everything here.

Therefore, think with your own head. Understand the basic rules of the game, and then you will be able to analyze your mistakes. Invest only free money that you will not mind losing. Take moderate risks. And your favorite Kate Smith will help you at least not to lose.

#roadto10k