SNEAK PEEK
- Pacman disclosed a lot of ongoing confusion regarding trading activity of MMs and collectors.
- The expansion of NFTs will lead to more and more MMs entering space.
- A MM shared on Twitter that Blur marketplace pays to be a market maker.
In the last week of February, Pacman, co-founder of Blur marketplace, revealed his real identity as a creator. In a series of tweets today, the creator shared that most of the volume in both token and traditional markets happens due to a small number of market makers, i.e., even less than 10.
The trading activity done by market makers differs from the trading activity done by collectors. This has led to great confusion. Before Blur was launched, MMs in NFTs were quite few, and some of the early MMS were @franklinisbored and @machibigbrother. With time, the space will mature, and more market makers will enter the space.
Market makers are not wash traders and offer liquidity. They make profits based on an asset’s real price. Trades made by them come at a cost in the form of royalties paid to creators. Activity by MMs are unlike the activity NFT buffs are habitual of and their entrance has made way for more players to enter into the space.
Liquidity offered by MMs makes the purchase of new collections safe, which means increased volume as well as profits for creators.
Improvements in the infrastructure and liquidity helped the space to expand. In the coming time, NFTs will grow massively, and the entry of MMs is just the beginning.
Meanwhile, a Twitter user who started as a market maker at the Chicago Board Options Exchange tweeted that MMs get payments to provide a market, and Blur Marketplace also pays them.
Market makers hit the bids, followed by selling for more. Markets these days are liquid; hence, MMs are not needed. When the Chicago Board Options Exchange was new, it required people for liquidity.
