4. Market maker services on crypto decentralized derivatives liquidity
4.1 About the ProTradex Market Maker Services
ProTradex market maker services includes a return optimization aggregation protocol. Built on existing applications, this protocol is focused on providing liquidity for crypto decentralized derivatives. It uses delta-neutral or pseudo-delta-neutral strategies to aggregate the returns of index pools or LPs into their constituent individual assets, thereby eliminating the risk of impermanent losses or exposure to unwanted assets.
ProTradex market maker services will help long tail investors with our years of market proven arbitrage strategies. That is, the AI systems distribute funds across different derivative protocols to provide them with liquidity to make substantial gains through derivative strategies.
4.1.1 What revolutionary changes has ProTradex market maker services made?
The ProTradex market maker services use efficient asset screening and allocation algorithms for fund deployment. As a result, funds on ProTradex are used efficiently. In addition to the original Defi mining sector (capture initial mining/ liquidity/ LP, etc.), it has incorporated new profit-making segments such as DEX (including various types of derivatives DEX), loans, leveraged mining, cross-chain mining and automatic compounded interests.
In terms of traditional DeFi liquidity behavior, impermanent losses consume a significant portion of users' returns, especially for some highly frequent crypto strategy transactions. ProTradex market maker services use delta-neutral or pseudo-delta-neutral strategies to aggregate the returns of index pools or LPs into their constituent individual assets, thereby eliminating their risk of unpredictable losses or exposure to unwanted assets.
In addition, based on existing derivatives liquidity protocol, ProTradex market maker services use smart contracts to simplify the process and allows users to deposit to the derivatives liquidity protocol using single tokens. ProTradex will automatically run the funds to participate in the DeFi segment for profitability to obtain the associated returns. Meanwhile, it will help users to sell the proceeds in the form of stable coins and return them to their accounts on a daily basis.
4.1.2 How does the ProTradex market maker services work?
The ProTradex market maker services work like a crypto savings account in cyberspace, where users deposit assets and the ProTradex Protocol sends them to the crypto decentralized derivatives ecosystem (liquidity/DEX, etc.). The proceeds generated are then returned to the user. However, unlike bank accounts (which traditionally have less than 10% capital utilization), the ProTradex market maker services use an efficient operation method and a very fast strategy. On ProTradex, users' asset utilization rate is often higher than 50%, which represents the highest yielding rate.
However, unlike a bank account (which traditionally has a utilization rate of less than 10%), the ProTradex market maker services use an efficient approach and a very fast strategy, which means that users can achieve a utilization rate of more than 50% of their assets, thus achieving the highest return match.
ProTradex’s revenue sources:
Trader losses
ProTradex is a revenue aggregation and optimization platform that is specialized in providing liquidity for crypto decentralized derivatives. This means that while we are the liquidity provider, we are also competing against the traders in the derivatives protocols. We are gaining from the traders' losses, which is one of the main ways we make profits.
Liquidity gains
We are making significant gains in the liquidity market by being a derivative liquidity agreement. As a derivative liquidity agreement with distinctive advantages, we will make more substantial and stable gains than our counterparts.
Transaction fee
ProTradex will charge users a small amount of transaction fees as part of our revenue stream.
Single interested Swap revenue
Earnings in some DeFi single token staking pools
The ProTradex Protocol will automatically allocate the proceeds to the user through the Revenue Aggregation Allocation Contract after receiving proceeds. The user can choose between 7-day revenue settlement and compounded interest to allocate the proceeds.
4.2 Different parties in the ecosystem
4.2.1 Derivatives protocols
For derivative protocols, ProTradex will provide liquidity for them by playing the role of a liquidity service provider. ProTradex has built a set of automated return strategies that will be automatically executed by an iteratively trained AI system. Based on the strategies, the AI system will switch markets among different return options to choose the one with the highest return and lowest risk. At present, ProTradeX ’s liquidity strategies target derivative protocols.
In addition to liquidity provision, ProTradex's automatic arbitrage strategy will also be executed simultaneously with multiple instruments such as order grabbing arbitrage and flash loan strategies to further enhance the profitability.
4.2.2 Investors (long tail users)
From the perspective of users, we are a derivatives liquidity agreement with a low threshold. We support users, especially some long-tail users, to stake their funds to the pool and earn very substantial returns through our strategies. By pooling most of the long-tail assets, ProTradex will be better positioned to capitalize and achieve a more substantial superior return.
To further motivate investors to participate in ProTradex, we have introduced a series of incentives including partner recruitment, new referrals with commissions, etc.. So far, we have invited 100 influencers to promote the platform in order to build a sizable asset pool in the short term.
Based on ProTradex, we are committed to:
Solving the liquidity problems currently faced by the derivatives market, and boosting the development of more crypto decentralized derivatives agreements so as to achieve collective profitability with our help. It is our vision to drive the development of the crypto decentralized derivatives sector.
Aggregating idle funds in the market for liquidity provision. This will further enhance the utilization of funds in the market and provide a substantial return for long-tail users. This change in turn will motivate and mobilize the flow of sunken funds in the market, which allow more long-tail investors to share benefits brought by the development of the crypto decentralized derivatives market.
4.3 Trading Strategies
At present, we have developed different trading strategies for crypto decentralized derivatives protocols of different operation mechanisms. We take GMX as an example to help users understand the arbitrage logic.
GMX is a crypto decentralized contract protocol with leverage features. Our strategies will consist of several parts.
Staking funds directly to GMX's GLP pool to form an LP
ProTradex distributes a portion of the funds into GMX's GLP pool to obtain $GLP, such as ETH/USDT (50% ratio). We also assess and monitor the traders' transactions in GMX and the price of $GLP, and withdraw $GLP to obtain a portion of the profit when we achieve the target profit (such as 5%). The ProTradex system will perform repetitive, high-frequency executions and switches across different underlying assets to accumulate gains.
Profits from market making
ProTradex is based on big data analyzer, AI and other strategic tools to develop market strategies and research trends. According to the market shares of different agreements, it casts targeted synthetic assets catering to the market trends as LPs to profit from the trading game among counterparty traders, i.e. their losses. In the past, the ProTradex Derivatives Trading Strategy system has a winning rate of over 95% against traders’ games. Through the market making trading strategy, ProTradex will gain a steady stream of revenue from traders' losses.
In addition, we will further combine different protocols including CEX, DEX, debit and credit agreements, synthetic assets and DeFi insurance with some of our basic strategies to form more complex derivatives liquidity protocol arbitrage strategies.
4.4 Development advantages of the sector
Anti-monopoly
Statistics from 2018 show that institutional investors in the U.S. hold a whopping 93.2% of the capitalization of the stock market. In comparison, individual investors hold less than 6%. Over 80% of cryptocurrency market capitalization is held by institutions and less than 12% by individual investors. 98% of the market's trading volume is from institutions and market traders.
Anti-institution
ProTradex is more conducive to individual investors and those with long-tail investment preferences to participate in the market maker trading segment for a steady trading profit. This trading profit used to be reaped by institutions and market maker service providers.
Large growth potential
The annual cryptocurrency market trading volume reaches tens of trillions of dollars. Due to the collapse of centralized exchanges, market trading volume in decentralized derivatives began to gather and explode. It can be anticipated that he growth rate of the market will continue to expand in the future.
4.5 Advantages of ProTradex market maker services
A strategy aggregator that is backed by and focused on the crypto decentralized derivatives market. ProTradex enjoys huge growth potential, and secures optimal returns through intelligent scheduling.
Proven liquidity market-making strategies that are calculated by big data and executed automatically by AI systems. Users receive stable returns with low risk.
With its low threshold, high yield return and various incentive mechanisms, it brings together long-tail funds to provide liquidity services to the market through a sizable amount of funds.
4.6 ProTradex Market Maker Services
Launching our own crypto decentralized derivatives protocol has always been part of our plan. In terms of CEX, derivatives protocol products are a segment with high profitability, and the trend to launch them on chains will become an emerging trend in the future as the market mechanisms improve. The new field is expected to be very profitable.
Our observation and analysis of the overall data of GMX shows that between the fall of 2021 and the end of 2022, although some traders made considerable gains from this period, traders overall were losing money. The accumulated loss was more than $40 million, which means that the platform is profitable for LPs.
This situation validates our thinking that LPs seem to be profitable in the long run and that crypto agreements have a tendency to generate revenues.
Therefore, in the early stage of ecology, after the test of the market, we have accumulated users and funds and will launch our own ProTradex crypto decentralized derivative protocols to increase the income of the ProTradex ecosystem as well as our users.
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