After the implosion of FTX in November 2022, the gap left behind its “sister” company, Alameda Research still impacts crypto liquidity. Now, with the insolvency of Silicon Valley Bank and the ensuing crisis of traditional banking, risks are further increasing — even if crypto has proved itself remarkably resilient so far.
Investment is getting more and more difficult to come by. With the drop in valuations, a few VCs are indeed looking to close lucrative deals. But they, in turn, have a hard time convincing institutional investors to enter web3 now.
Besides investment, consumer confidence is also weakening. Hence hopes for extensive growth are getting dimmer, too.
This bleak outlook may not change for quite some time.
Amid so much uncertainty, where can crypto projects and communities turn for a reliable stream of revenue?
Digital asset issuers may already possess the solution: their own tokens.
They can help, however, if projects find a way to sell them without decreasing the value of the token. Otherwise, if too many tokens are released too quickly to the market, the oversupply risks major disruptions — from temporary price swings to permanent devaluation.
Algorithmic brokerage helps solve this challenge.
Indeed, brokerage facilitates large-scale market transactions of many kinds including crypto-to-fiat settlements and buybacks. Taking crypto projects’ needs into account, algorithms execute smart token sale or repurchase strategies efficiently.
Brokerage is carried out based on clients’ priorities and goals. These may target minimizing the price impact of large transactions, optimizing the tokens’ sale price, and more. Projects need to be mindful of the time required to carry out large-scale transactions. Of course, longer time periods allow for more sophisticated strategies and better results than short windows.
Based on the parameters determined by the client, algorithmic trading takes care of the execution anytime when the necessary conditions are met.
The transparency of the brokerage provider is key — especially because crypto markets are still under-regulated. Without detailed, frequent reports, crypto projects would have a hard time verifying whether their orders were executed properly. This is why Flowdesk has developed its Brokerage as a Service (BaaS). It includes live dashboards, daily and periodic reporting, as well as 24/7/365 sales team support. This model gives constant access to Flowdesk’s algorithms. Therefore projects can not only monitor, but also set, adjust, and terminate brokerage operations anytime they wish.
Thanks to this, complex custom funding programs become available for crypto projects. Such funding programs can generate stable revenue streams for projects even during a bear market and uncertain macroeconomic developments.
BaaS can be a flexible, versatile tool in digital asset projects’ hands helping them even when crypto markets are in extreme turmoil. It gives more control to projects and communities over their financial choices. The reliable revenue stream it can provide to digital asset issuers might play an important role in staying liquid even when the funding and growth outlook are uncertain.
This post is commissioned by Flowdesk and does not serve as a testimonial or endorsement by The Block. This post is for informational purposes only and should not be relied upon as a basis for investment, tax, legal or other advice. You should conduct your own research and consult independent counsel and advisors on the matters discussed within this post. Past performance of any asset is not indicative of future results.
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