BIT Market Maker Program 2023
We are pleased to announce the launch of our new market maker program, effective from March 1st 2023, designed to enhance liquidity on our platform. While all terms and requirements are subject to change, we will notify market makers in advance of any changes.
The new market maker program will evaluate market makers' performance based on several criteria, including (1) liquidity, (2) volume market share, (3) time online, and (4) spread (for options only). Daily points are pro rata, which means that market makers who make markets for only a few symbols still have a chance to earn points. These points will be accumulated towards the end of the month, and BIT reserves the right to adjust market maker tiers based on the total score of the market maker in the previous month.
To learn more about the detailed requirements, please refer to the attached Excel file.
Our monitoring system takes regular snapshots, and the achieved amounts are calculated by averaging the numbers of all snapshots unless noted otherwise.
Below are the requirements for each criteria.
Requirement
Requirement 1: Liquidity
The liquidity requirements are measured in USD amount, and the coin amount will vary due to the spot index. Please keep some buffer in a volatile market.
Market makers must have at least the required number of orders to earn the corresponding score in a given price range. Symbols in the same symbol tier will share the total score of that price bracket. For example, if there are five symbols in spot tier 1 and the requirement is within mid+/- 200 price step range, the market maker must place more than 70,000 USD orders for each symbol. If a market maker only makes markets for three of the five symbols in tier 1 and meets the liquidity requirements for those three symbols, they can earn 3 points for that day from this criteria.
Requirement 2: Trading volume
The market maker volume ratio is calculated by dividing the total market maker trading volume of the symbol tier by the total trading volume of the symbol tier.
For example, there are five tier 1 symbols and a market maker trades 1,000U, 2,000U, 1,000,000U, 10,000,000U, and 15,000,000U, respectively, and the total trading volume of those five symbols is 100,000,000U, the trading volume ratio of the market maker in the tier 1 symbol bucket is 26%. They, therefore, meet our trading volume requirement of 5% for the tier 1 symbols.
We will not require market makers to meet the trading volume requirement on each symbol, but the accumulated total volume of a symbol tier to meet the requirement for that symbol tier.
Requirement 3: Online Time
Our monitoring system takes regular snapshots, and if a market maker has order(s), regardless of the symbols, on the snapshot, we will mark "Up" for that snapshot. We will accumulate the total "Up" time to decide the length of time the market maker is online.
Requirement 4: Spread (For Options Only)
For each strike, we calculate the spread of the market maker's best bid or ask from the mid-price.
For each maturity, we average the spread of all strikes calculated.
For each symbol, we average the spread of all maturities to decide whether the market maker meets the spread requirement of that symbol.
Benefits
Market makers' levels for the following month are largely determined by the market-making performance of the previous month, i.e., the total points accumulated. The market maker can check the table below for details. We believe that this new program will encourage and incentivize market makers to provide the necessary liquidity for our platform.
