Can Market Making Narrow Exchange Liquidity Gaps? Bitplanet Proposes Participation Incentives and Conflict-of-Interest Controls
Bitplanet Research Lab's October 14 report examined tokens jointly listed on four domestic won-denominated exchanges and found bid-ask spreads widen significantly for low-volume tokens.
Market making involves continuously posting both bid and ask quotes to serve as a counterparty for investors' trades.
The report notes Korea's Financial Services Commission moved to introduce a related market-making system on September 28, but cautions that without real execution and cost-reimbursement support, liquidity gaps may persist.