The Importance of Liquidity for Grin’s Market Stability

[Anynomous]

@syntaxjak

Liquidity isn’t just about how much Grin you can sell—it’s also about how much you can buy. A well-functioning market requires liquidity on both sides of the order book, with limit orders placed to narrow the spread and ensure smoother price action.

When there’s adequate liquidity, buyers and sellers can transact without causing major price swings. This stability builds confidence in the market, allowing larger trades to happen without drastically impacting the price. That’s essential for fair and efficient trading.

Some people view paying for market makers as market manipulation, but ironically, the absence of market makers allows bad actors to manipulate prices more easily. Without proper liquidity, it’s easier for a few individuals to exploit thin order books, creating unnecessary volatility and, in essence, stealing value from legitimate traders. While the idea of avoiding exchange fees may seem noble, not funding market support could ultimately harm Grin’s adoption and usability.

I agree, this all true.

@syntaxjak

If the Grin community is open to funding a trading account on TradeOgre, I’d be happy to manage it to help improve liquidity and price stability. Let’s discuss the best way to approach this.

So far we tried to stimulate Grinconomics, it was a hassle, well intended and not something to repeat. Facilitating liquidity and prise stability is too close for comfort to market making which we are not allowed to do as stated in the CCs code of conduct and spending guidelines. Futhermore, the problem with paying market makers is that it creates risks and exposes CC funds to attacks just like for any normal trader. What if part of the funds get lost in the process? What if bad actors overwelm the liquidity we would provide? I prefer to keep things simple, the market is free and anyone is free to buy bottoms and sell the tops. Anyone willing can become a market maker with their own funds to stabilize the price and make profits from price swings.