# Market Making Related Articles

HTX News Center provides the latest articles and in-depth analysis on "Market Making", covering market trends, project updates, tech developments, and regulatory policies in the crypto industry.

Pennsylvania Bill Could Bar Sportsbooks from Participating in Prediction Market-Making

A bipartisan group of lawmakers in Pennsylvania introduced House Bill 2711, which could prohibit gambling companies, including sportsbooks, from serving as liquidity providers or market makers on prediction market platforms. The bill aims to separate prediction market infrastructure from gambling entities. It would ban platforms from contracting or sharing revenue with companies engaged in gambling and imposes consumer protections, including age restrictions and bans on markets related to minors, health, and death. Unlike proposals in other states, it seeks to regulate rather than ban prediction markets, focusing on restricting liquidity sources. The bill contrasts with another Pennsylvania proposal (HB 2497) that would license and tax such platforms. This legislative push occurs amid a national debate over whether prediction contracts are gambling or financial derivatives, following a recent federal court ruling that federal commodity law preempts state gambling laws for CFTC-registered exchanges.

cryptonews.ruYesterday 05:29

Pennsylvania Bill Could Bar Sportsbooks from Participating in Prediction Market-Making

cryptonews.ruYesterday 05:29

In-depth Analysis of Trade[XYZ]: How Were 92 Markets and 98% of HIP-3 Trading Volume Established?

**Deep Dive into Trade[XYZ]: How It Built 92 Markets and 98% of HIP-3 Volume** This analysis explores Trade[XYZ], a deployment on Hyperliquid's HIP-3 framework, which now accounts for 98% of its transaction volume. It argues that Trade[XYZ] is not a threat to Hyperliquid but a validation of its strategy: providing open infrastructure for specialized teams to build deep liquidity markets. The report details the significant difficulty of building institutional-grade perpetual markets for real-world assets (stocks, indices, commodities). Trade[XYZ] succeeded by rapidly launching markets (median 3.3 days), attracting deep-making market makers, and implementing sophisticated risk mechanisms (like "Discovery Bounds") to maintain liquidity even when traditional hedges are unavailable (e.g., overnight, pre-IPO). Key findings include: * **User Acquisition:** ~97% of Trade[XYZ] volume trades through Hyperliquid's own front-end, bringing over 300,000 new wallets to the protocol. * **Fee Sharing:** Protocol fees are split 50/50 between Hyperliquid (for HYPE buybacks) and the deployer. The "Growth Mode" (low fees for RWA) is a strategy to build market share before potential monetization at standard rates, as evidenced by the GOLD market. * **Market Quality:** Trade[XYZ] has achieved tight spreads and significant open interest, led by commodities and indices. Its ongoing operational management of 92 markets is a full-time business. * **Strategic Fit:** Building these markets internally would expose Hyperliquid to regulatory risk and divert focus from its core infrastructure mission. HIP-3 allows expert deployers like Trade[XYZ] to handle complex operations while Hyperliquid benefits from network effects, fees, and users. The conclusion is that Trade[XYZ]'s dominance demonstrates the success of Hyperliquid's horizontal model: attracting the best operators to build winning verticals on its neutral, high-performance base layer.

marsbit07/16 06:22

In-depth Analysis of Trade[XYZ]: How Were 92 Markets and 98% of HIP-3 Trading Volume Established?

marsbit07/16 06:22

Robinhood Chain Ecosystem Overview: Which Projects Are Worth Early Attention?

This article provides an overview of the emerging Robinhood Chain ecosystem, a Layer-2 network launched by Robinhood. As of July 6, 2026, the ecosystem's TVL stands at approximately $76.73 million. Key projects highlighted for potential opportunities include: * **Arcus**: A DEX for stock tokens and crypto, co-built by dYdX Labs and Robinhood Crypto, focusing on spot and perpetual trading. Future token distribution is expected to prioritize the dYdX community. * **Lighter**: A ZK-powered DEX for perpetuals and spot trading on Robinhood Chain, offering an incentive program for users. * **Morpho**: Supports Robinhood Earn, a feature allowing US users to lend stablecoin USDG for an estimated 7% APY. * **Rialto**: An on-chain spot exchange supporting crypto, stocks, ETFs, and commodities, utilizing a propAMM model for liquidity. * **Arrakis**: A non-custodial on-chain market maker protocol for token issuers. * **Meridian**: A platform for RWA perpetual contracts and prediction markets, settled in USDe. * **Native**: An on-chain price discovery and execution system now deployed on Robinhood Chain. The article concludes with a disclaimer, advising readers to conduct their own research (DYOR) and assess risks.

marsbit07/06 07:05

Robinhood Chain Ecosystem Overview: Which Projects Are Worth Early Attention?

marsbit07/06 07:05

Crypto Market Makers Collectively Seek Transformation as Money Becomes Increasingly Difficult to Earn

Major crypto market makers like GSR are collectively pivoting as profitability declines in their traditional business. GSR has pursued an aggressive "Web3 investment bank" strategy through acquisitions and partnerships, including buying a US SEC-registered broker-dealer, acquiring token advisory firms, launching an ETF, and securing strategic investment from Standard Chartered's SC Ventures. This transformation aims to integrate fragmented services—token design, fundraising, listing, liquidity provision, and asset management—into a unified platform. Other leading market makers, such as Keyrock, B2C2, Wintermute, and DWF Labs, are following a similar path: strengthening regulatory compliance, expanding into institutional OTC services, and diversifying into areas like asset management, tokenized assets, and complex financial products. Key drivers for this shift include shrinking project budgets, increased competition for fewer viable tokens, and smarter, more demanding clients. Regulatory pressures (e.g., MiCA in the EU) and market volatility are raising the stakes, forcing firms to build systemic risk controls. The industry is evolving from a high-margin, volatility-driven trading model toward a more institutional, compliance-heavy, and service-integrated structure.

链捕手06/12 05:50

Crypto Market Makers Collectively Seek Transformation as Money Becomes Increasingly Difficult to Earn

链捕手06/12 05:50

Two Survival Structures of Market Makers and Arbitrageurs

Market makers and arbitrageurs represent two distinct survival structures in high-frequency trading. Market makers primarily use limit orders (makers) to profit from the bid-ask spread, enjoying high capital efficiency (nominally 100%) but bearing inventory risk. This "inventory risk" arises from passive, fragmented, and discontinuous order fills in the limit order book (LOB). This risk, while a potential cost, can also contribute to excess profit if managed within control boundaries, allowing for mean reversion. Market makers essentially sell "time" (uncertainty over execution timing) to the market for price control and low fees. In contrast, cross-exchange arbitrageurs typically use market orders (takers) to exploit price differences or funding rates, resulting in lower nominal capital efficiency (requiring capital on both exchanges) and higher transaction costs. Their risk exposure stems from asymmetries in exchange rules (e.g., minimum order sizes), execution latency, and infrastructure risks (e.g., ADL, oracle drift). These exposures are active, exogenous gaps that primarily erode profits rather than contribute to them. Arbitrageurs essentially sell "space" (capital sunk across venues) for localized, immediate certainty. Both strategies engage in a trade-off between execution friction and residual risk. Optimal systems allow for temporary, controlled risk exposure rather than enforcing zero exposure at all costs. Their evolution converges towards hybrid models: arbitrageurs may use maker orders to reduce costs, while market makers may use taker orders or hedges for risk management. Ultimately, both use different forms of risk exposure—market makers exposing inventory, arbitrageurs immobilizing capital—to extract marginal, hard-won certainty from the market.

链捕手05/16 07:09

Two Survival Structures of Market Makers and Arbitrageurs

链捕手05/16 07:09

TurboFlow Announces Strategic Partnership with Global Giant Susquehanna Crypto, Introducing Wall Street Institutional-Grade Liquidity and Dynamic Odds Market Structure Support

TurboFlow announces a strategic partnership with Susquehanna Crypto, a leading global proprietary digital asset trading firm. As part of this collaboration, Susquehanna Crypto will act as an on-chain liquidity provider and market maker for all TurboFlow products. This partnership brings institutional-grade liquidity, market-making support, and expertise in professional trading, market structure, price discovery, and risk management to the TurboFlow ecosystem. This marks a significant milestone for TurboFlow as it expands its product suite, which includes perpetual contracts and newly launched Event Contracts with durations as short as 30 seconds. Enhanced liquidity depth, efficient price discovery, and market stability are becoming increasingly critical for user experience. Notably, TurboFlow is transitioning its Event Contracts from a traditional fixed-odds model to a more dynamic, market-driven odds structure. Susquehanna Crypto will inject deep liquidity through TurboFlow's proprietary PFOF (Payment for Order Flow) architecture. This aims to ensure minimal slippage and millisecond-level execution for users, even during extreme market volatility, whether trading 1000x leveraged perpetuals or short-duration event contracts. Looking ahead, TurboFlow plans to onboard more top-tier institutional market makers to build a diversified liquidity network. The platform will continue expanding its product ecosystem across several verticals: Event Contracts (extending to assets like crude oil and gold), prediction markets and Telegram Mini Apps, and perpetual contracts. TurboFlow's mission is to democratize trading by making professional-grade infrastructure and a simplified, engaging experience accessible to all users.

链捕手05/13 10:23

TurboFlow Announces Strategic Partnership with Global Giant Susquehanna Crypto, Introducing Wall Street Institutional-Grade Liquidity and Dynamic Odds Market Structure Support

链捕手05/13 10:23

Paradigm Builds Its Own Prediction Market Trading Terminal, Also Considering Market Making and Index Products

Paradigm, a major crypto investment firm, is developing a dedicated trading terminal for prediction markets, targeting professional traders and market makers, according to anonymous sources. Led by partner Arjun Balaji since late 2025, the initiative aligns with growing institutional interest in prediction markets, where users speculate on events like elections or asset prices. The company is reportedly considering launching an internal market-making desk and exploring the creation of a prediction market index—similar to traditional indices like the S&P 500—by aggregating multiple prediction markets into a single tradable product. Paradigm has already begun compiling prediction market data into a public dashboard. Notably, Paradigm is a key investor in Kalshi, a leading prediction market platform it helped value at $22 billion, and insists the terminal does not compete with Kalshi’s core business. This move is part of Paradigm’s broader expansion beyond crypto into AI and robotics, evidenced by its ongoing efforts to raise a new $1.5 billion fund. The firm has a history of launching in-house projects, including the crypto software company Ithaca and Tempo, a stablecoin-focused blockchain developed with Stripe.

marsbit04/02 03:11

Paradigm Builds Its Own Prediction Market Trading Terminal, Also Considering Market Making and Index Products

marsbit04/02 03:11

Only 43% Return on $1, Why Are 87% of Polymarket Players Losing Money?

In prediction markets like Polymarket, data from 72 million trades reveals that 87% of traders lose money, with an average return of just $0.43 per dollar risked on low-probability contracts. This underperformance stems from behavioral biases, such as the "longshot bias," where traders systematically overvalue cheap contracts (e.g., 1¢ priced outcomes actually win only 0.43% of the time). Winning traders (the top 13%) use five key game theory principles: 1. **Expected Value (EV):** Calculating long-term average returns based on subjective vs. market-implied probabilities. 2. **Mispricing:** Identifying deviations between contract prices and actual outcome frequencies, avoiding overpriced low-probability bets. 3. **Kelly Criterion:** Optimizing bet sizing to maximize growth while managing risk, often using fractional Kelly to reduce volatility. 4. **Bayesian Updating:** Adjusting probability estimates rationally as new information emerges, rather than overreacting or ignoring data. 5. **Nash Equilibrium:** Recognizing market structure shifts (e.g., maker vs. taker dynamics) and adapting strategies—especially in emotional markets (e.g., sports/entertainment) where mispricing is common. As professional market makers enter, inefficiencies shrink, emphasizing the need for disciplined, math-driven trading over emotional speculation.

marsbit03/30 08:11

Only 43% Return on $1, Why Are 87% of Polymarket Players Losing Money?

marsbit03/30 08:11

1 Dollar Return Rate Only 43%, Why Are 87% of Polymarket Users Losing Money?

In the prediction market Polymarket, analysis of 72.1 million trades reveals that 87% of wallets lose money, while only 13% consistently profit. The key difference lies in the application of game theory and mathematical strategies, not luck. Five core formulas separate winners from losers: 1. **Expected Value (EV)**: Winners calculate EV to identify undervalued contracts, while most traders rely on intuition. Makers (limit order placers) profit by waiting for positive EV opportunities, while takers (market buyers) lose ~1.12% per trade on average. 2. **Mispricing**: Low-probability contracts (e.g., priced at 1¢) are systematically overpriced, with actual win rates as low as 0.43% (a -57% deviation). High-probability contracts are often undervalued. Takers overpay for "cheap" lottery-like bets, while makers capture this inefficiency. 3. **Kelly Criterion**: Used for optimal position sizing. It maximizes long-term growth but is often applied fractionally (e.g., 1/2 or 1/4 Kelly) to reduce volatility. 4. **Bayesian Updating**: Profitable traders adjust probabilities rationally as new information emerges, unlike emotional overreactions or inertia from others. 5. **Nash Equilibrium**: The market structure evolves with participant behavior. In emotional markets (e.g., sports, entertainment), mispricing creates opportunities for contrarian strategies. As professional market makers enter, spreads tighten, and inefficiencies shrink. The conclusion: Persistent losses stem from emotional trading, overpaying for low-probability bets, and neglecting mathematical discipline. The winning minority uses these formulas to exploit market biases systematically.

Odaily星球日报03/30 08:03

1 Dollar Return Rate Only 43%, Why Are 87% of Polymarket Users Losing Money?

Odaily星球日报03/30 08:03

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