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EARN PASSIVE INCOME WITH DEFI VIA MARKET MAKING
EARN PASSIVE INCOME WITH DEFI VIA MARKET MAKING
WHAT IS THE OVERALL GOAL?
WHAT IS THE STRATEGY?
WHAT DO I PROVIDE?
HOW DO I GET STARTED?
WHAT ARE THE RISKS?
WHAT ARE THE OPEN QUESTIONS?
WHY DON'T I JUST HOLD ETH?
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Market Making 101

⁠
WHAT ARE MARKET MAKERS?
⁠
?

Summary

Automated Market Maker

An
automated market maker (AMM)
⁠
is a specific type of decentralized exchange (DEX) that relies on a mathematical formula to price assets instead of an order book where buys and sells are matched like on Coinbase or Gemini. Traditional market-making utilizes giant firms with extensive resources to create a tight
bid-ask spread
⁠
on an order book exchange. Automated market makers decentralize this process, enabling anyone to create a market for any two tokens on a blockchain.

How Do Market Makers Collect Fees
As Market Maker you:
You provide liquidity for a specific price range (in this case an ETH price range).
When ETH is within this price range, you collect fees
When ETH is outside this price range, you do not collect fees
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