Strategy - AMM

What Is Market Making

Market makers continuously post orders on the order book close to the market price, while charging a small profit margin, or spread, for their services. By continuously buying (slightly) low and selling (slightly) high, the market maker can make a profit as their inventory turns over.

LVL’s Automated Market Making Strategy

By allowing users to subscribe to an automated market making (AMM) strategy directly from their wallet, LVL is offering a trading strategy to all LVL users that had been previously only been available to insiders, whales, and institutions. Users may make the market in one or more trading pairs on LVL.

Learn More

You can learn more about LVL's AMMs in our blog post,  white paper, or downloading our open source project on github.  Note that the white paper results are based on a theoretical market model and do not model AMM self-trade mitigation. See investing risk disclosures in our User Agreement, and more about trading generally in our Trading Rules. 

Using the AMM

Transfer into AMM

To transfer assets into the AMM from your LVL wallet

  • Select the little plus button
  • A window will pop with selections for:
    • Asset type
    • Amounts to transfer
    • Transfer type (in/out). The in/out is indicated by the <-|-> button on the right
    • Risk acknowledgement

Orders on the exchange are subject to minimum amounts.  Orders placed by the AMM on the exchange are subject to the same minimums, as below: 

  • BTC 0.001
  • ETH 0.010
  • LTC 0.100
  • BCH 0.010

AMM Settings

Please see the white paper for detailed information on LVL’s AMM.  The information about settings is provided for convenience only and is not investment advice. 

When you visit the AMM page, you have three settings

  1. Market selection - which markets you're market making on. All markets are paired with USDC.  Whichever ones you choose, the AMM will balance your funds between that asset and USDC. If the dot next to the asset type is green it means the AMM is on for that market. To turn the market off/on, hit the asset icon and the dot will toggle between green/grey.  
  2. Spread – The spread is the % premium you want to charge relative to the market price. The spread you set will be applied to all markets your AMM is running on.
  3. Inventory Adjustment (also known as ‘Give’) -  Inventory Adjustment is the % discount you offer to balance your inventory on each trading pair. The Inventory Adjustment you set will be applied to all markets your AMM is running on.

All trading is risky.  How the AMM trades depends on market dynamics, which markets your AMM is running on, the size of your portfolio, and so on.  Use caution and see what settings work for you.  Generally:

  • High spread = higher markup per trade, less matches
  • Low spread = lower markup per trade, more matches
  • High Inventory adjustment = more balanced, more trades
  • Low Inventory adjustment = less balanced, less trades

Transfer out of AMM

To transfer assets out of the AMM and into your LVL wallet

  • Disable the market for the asset you wish to transfer. Within the AMM, the dot next to the asset type should be gray (not green).
  • From the main wallet page, select the little plus button next to the AMM
  • A window will pop with selections for:
    • Asset type
    • Amounts to transfer
    • Choose transfer type ‘out’. The in/out is indicated by the <-|-> button on the right
    • Risk acknowledgement