Dexterity Capital, a quantitative trading firm, is launching a market-making service to help new crypto ventures get off the ground.
The new business wing, called DCLiquidity, attempts to educate early-stage innovators navigate the sometimes perplexing technological, tokenomic, economic, and legal mazes that precede even pre-seed fundraising rounds. Following the launch, it will market-make the project’s token until liquidity naturally develops.
“Until then, you’ll need someone like us just to make sure that a normal trader will look at your product and say, ‘Hey, listen, there’s enough organic [liquidity] – be it order-book depth, or tight spreads – for this to be worth my time to trade,” said Arpan Gautam, Dexterity’s Head of Business.
It’s a departure for the shady prop trading outfit. According to Gautam, Dexterity’s high-speed algorithms exchanged $1.2 trillion in tokens last year, and they now perform up to 200,000 market neutral trades every day.
Similar token-startup consulting services are provided by larger competitors. When you’re a pre-launch startup, the reasoning goes, it pays to recruit someone who knows someone – whether they’re market-makers, exchanges, or venture investors.
One big-name trading firm’s consultation line, according to a source, is seeing a lot of traffic, indicating founders’ thirst for advice.
Some early projects negotiate the liquidity maze by bringing on board well-connected market-makers such as Jump and Alameda. DCLiquidity may invest in some of the initiatives it supports, but not all, according to Gautum.