Increasing liquidity of Nimiq

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#1

There have been some discussions in the community regarding liquidity. This topic is increasingly important since Exchanges we reach out to always comment about the importance of liquidity for a listing as well. We also published a video recently discussing about the difference between trading volume vs liquidity, market makers vs wash traders and why liquidity is important for a crypto project. You can watch the video below:

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Today a user was very open about the lack of market makers / liquidity and how this, I quote, ā€œsucksā€. Since we are actively looking at ways to increase liquidity, I want to bring this discussion to the forum to get feedback, ideas and suggestions from the community. If you are aware of legit market makers or other ways of increasing liquidity, please share them below.

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#2

There is Gekko which is free and open source, although I was expecting that they added support for KuCoin at some point to be able to try it myself. Unfortunately Gekko is no longer maintained.

At some point they had an online platform for trading where they had contests with prizes given to the most profitable bots. Unfortunately it was suspended too.

If I understand correctly from the video, volume alone doesnā€™t bring liquidity, so Iā€™m not sure if using any other kind of bot than a market maker one would do the job of increasing liquidity.

Something to consider though, is that Gekko had a big community of YouTubers and traders that perhaps could take the mantle to continue with the project. Some Gekko plugins for trading even were already using machine learning algorithms, which is kind of cool, IMO.

#3

Itā€™s counterintuitive but listing on more exchanges could help increase liquidity through arbitrage trading. A $1k NIM purchase on one exchange can actually become $2k+ in volume spread out over multiple exchanges if there is a divergence in prices.

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#4

One of the things Iā€™ve encountered a lot when trading NIM is the presence of ā€˜icebergā€™ orders, where a buy or sell order for a small amount of NIM will be on the order books, but as soon as that order is filled it is replaced by an identical order at the same price. So while it often looks like a thin order book with a few hundred thousand NIM on either side of the current price, there is sometimes millions of NIM in liquidity available. For a while it would show up as a 186k buy or sell order on Kucoin; Iā€™ve been taking a break so Iā€™m not sure if itā€™s still the same or if that person has stopped trading.

IMO I donā€™t think any effort will make as big of a difference as a mass marketing/awareness campaign will. Thereā€™s simply not enough people interested in buying/selling right now.

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#5

The thing is that liquidity seems to be key here because:

  • New exchanges are asking for more liquidity as a requirement for listing NIM.
  • One of the main concerns from traders is also liquidity, so massive marketing (which we are planning) will not be as effective since that same concern will remain.
#8

I think it comes down to use cases at the end of the day, which makes it tricky when there are a bunch of other coins who are also competing in the same space as Nimiq. Itā€™s the same case for many other altcoins.

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#9

This might be helpful https://hummingbot.io/
With Liquidity Mining, token projects can now leverage their native communities to act as market makers. We help projects manage liquidity mining campaigns that reward participants based on how much liquidity they provide in a given time period.

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#10

I had problems with hummingbot, so I wrote a minimal bot a few months ago. I put up some minimal documentation and just uploaded it to https://github.com/longpass/lqbot. Feel free to try it out.

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#11

Iā€™ve just setup a Hummingbot on my VPS that trades on the NIM/BTC pair on Kucoin. Itā€™s an interesting project when you combine it with Liquidity Mining where the token creator incentivize their community by running campaigns and reward them for being a Market Maker.

Is it common for projects to run these kind of campaigns and let token creators indirectly pay their community for being a Market Maker to increase liquidity? Any stats you can provide?

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#12

Thanks @Flash, @Stefan, Hummingbot looks very promising considering the option to allow community to do liquidity mining. Lqbot from @longpass looks interesting since it seems very easy and straight forward to set up! I am going to continue researching and testing them as these might contribute to increasing liquidity :slight_smile:

#13

I think itā€™s great the Nimiq team is genuinely interested in creating more interest. In my opinion, retail interest will gravitate towards any staking coin. Nimiq needs to get YouTube talking about the ease of staking with Nimiq and the percentage returns from staking. Passive income through staking is the rage now. Retail interest will use swap exchanges if they have to. I would think that would increase liquidity.

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#14

Thanks @Anthony we are indeed getting YouTube talking about Nimiq. Influencers and interviews already lined up.

#15

Hey Nimiq team,

There are a number of things that are going well for Nimiq and one of those is the Nimiq ā€œimage/branding/designā€, not to mention the intuitive UI design and ease of use of the platform which are just one of the reasons why I came to support the Nimiq brand.

Iā€™m not really technical, but in terms of increasing liquidity - aside from large and consistent Marketing/Advertising that generate movement/liquidity as previously suggested - I found it useful to look into other currencies/competitors/developers and see what they have going that seems to be working in getting the masses interested and support their brand and cause.

Those things that Iā€™ve noticed - in no particular order - are the following:

1.) Developing a private, secure, and stable system/platform that is very simple to understand and adopt by anyone from any country.

2.) Successfully reaching out to other countries, businesses, service providers, and individuals in adopting their payment system, especially those who are not ā€œbankedā€ or possibly have no access to Internet (I donā€™t know, just brainstorming here).

3.) Creating online (or possibly offline) education, marketplace, stores for all users to offer their skills/services for payment in Nim.

4.) Other use cases for Nim that can be done and/or accessed simply through the wallet - such use cases they are looking to establishing is mobile/data top ups and utilities (electricity, water, internet).

Someone I know did say, ā€œconvenience comes at a priceā€. So if we can make these conveniences available and very simple to use, then liquidity will follow.

Those are my two cents guys, not sure if it was of any help, but I just wanted to share.

Keep up the good work team Nimiq, donā€™t lose your branding, and keep on developing.

Cheers guys!

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#16

I just wanted to point out that some of the topics you mentioned could be addressed by Nimiqā€™s Crypto Adoption Proposal, which is a live and open document. It could be expanded to include more ways to increase adoption like those you mentioned. Also, things like #4 could be built by people participating in the incubator program, also described in the proposal.

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#17

Another bot that can be used for automated trading is Freqtrade

It is very well documented and can be controlled from Telegram.

#18

What kind of influencers?

#19

Liquidity is still a very weak point, 18 months after.
I have noticed that, unlikely what it is believed, Nimiqā€™s volume is pretty decent, and bigger than some other crypto ā€œKucoin exclusiveā€ like Dero that are much higher ranked. So volume is fine.
The problem is pretty much the liquidity ā€œonlyā€.
How about investing in some ā€œliquidity mining campaignsā€ either with Kucoin itself or with Hummingbot ?

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