Purpose
Client`s requirement was to create an optimal strategy to prevent a sharp price decrease amid putting a huge number of volume sell orders in a limited period (dump).
Service
Consulting, Liquidity Provision.
Main Steps
- The BeLiquid team has analyzed the trading token’s history to understand the impact of previous cases and develop further token trading strategy.
- The results pointed out that the optimal solution to the significant volatility reduction would be the combination of two approaches:
- 1) price maintenance by putting the maximum number of orders at the given price level;
- 2) applying soft price control by allowing a price to damp or pump in a short period under a trade activity.
- The benefit of this approach is the minimum token budget for support issues.
- Balancing between the two approaches depends on the project’s reputation risks and available budget for development.
- It is also important to remember the risks of a “panic sale” — the snowballing selling of sufficient tokens volume due to the panic amid a quick price damp.
- Beliquid team is confident to manage such risky and difficult strategies due to the skill set of our analytics and quick reaction to order book management.