Presentation by Michael Feng, CEO and Co-founder of hummingbot.io on how the network can be the ultimate liquidity provider. For more info., check out hummingbot.io.

1. Decentralized market making
How the network can be the ultimate
liquidity provider
Michael Feng
CEO, Hummingbot

2. About us
Deep domain expertise in machine learning and
blockchain engineering
22 years of Wall Street experience at Goldman Sachs,
JPMorgan, etc.
First product was a quant crypto hedge fund that
operated from Oct 2017 to Sep 2018

3. Financial markets are 3-sided
Trader
Exchange
Market
maker
fees rebates
bid-ask spread

4. Crypto markets today
Exchanges
Traders Market makers

5. Low vs high liquidity
Bid-ask spread
0.04%
Market depth (ETH)
2,600 sell / 1,200 buy
Bid-ask spread
2.62%
Market depth (ETH)
175 sell / 215 buy
ETH/USDT
WETH/DAI

6. Why aren’t there more DEX market makers?
Technical risk
Regulatory risk
Inventory risk

7. Exchange connectors
Architecture of a market making node
Cross-exchange MM
Arbitrage
Pure MM
User defined
ETH
wallet
API
keys
Local / Hosted
Decentralized
exchanges
Centralized
exchanges
Strategy plugins

8. Cross-exchange market making
100
100
10496
99 101

9. Cross-exchange market making (cont)
100
100
10496
99 101
make make
1. On Radar, make buy offer
at $98 and make sell offer
at $102
98 102

10. Cross-exchange market making (cont)
100
100
10496
99 101
make make
98 102
order
filled
1. On Radar, make buy offer
at $98 and make sell offer
at $102
2. When buy offer is filled,
you BUY the asset for $98

11. Cross-exchange market making (cont)
100
100
10496
99 101
make make
98 102
order
filled
1. On Radar, make buy offer
at $98 and make sell offer
at $102
2. When buy offer is filled,
you BUY the asset for $98
3. On Binance, take best
buy offer and SELL the
asset for $99
take

12. Cross-exchange market making (cont)
100
100
10496
99 101
98 102
1. On Radar, make buy offer
at $98 and make sell offer
at $102
2. When buy offer is filled,
you BUY the asset for $98
3. On Binance, take best
buy offer and SELL the
asset for $99
4. Lock in $1 arbitrage
profit
arbitrage

13. Timeline
Sept
2018
Closed down
hedge fund
Nov
2018
0x dev
grant
Feb
2019
Private
alpha
March
2019
Public
beta
Q2
2019
More exchange connectors
Graphical user interface
User-defined strategies

19. Thank you!
t.me/projecthummingbot hummingbot.io