This has been a long-term experiment for me in pure crypto market making (of course, backed up by python bots).
Market making bots are placing limit buy and sell orders on the order book at prices relative to the mid-price with spreads equal to some values on the order book.
Trades can control how orders are placed based on inventory levels and more with the strategy’s numerous parameters. There are 1 second intervals between each tick, so it’s a tick-by-tick operation.
The pure market making strategy would first check the order filter to see if it should proceed or not at each tick. In this case, it will look into order pricing and sizing to see if and what market making orders it should emit.
At the same time, it will examine any existing limit orders it has placed on the market and decide whether or not to cancel them. At each tick, the process repeats itself, causing limit orders to be placed and canceled based on the order pricing and sizing proposals.
The end result?
+ rewards from the actual mining pool
+ rewards from exchange / spreads
… more coming soon