Binance has launched the first altcoin-focused spot liquidity program as it looks to boost diversity in the crypto market making ecosystem.
In an announcement, Binance said its new service, the “Altcoin LiquidityBoost Program,” will not just enhance liquidity but offer trading efficiency for selected altcoin trading pairs.
Binance is looking to support small and medium-sized liquidity providers eyeing exclusive traction in the altcoin market. The goal is to offer altcoin traders access to tighter spreads and reduced slippage amid overall improvement of users’ trading experience.
Market-making participants will benefit from huge rebates, with Binance keen on tapping into a diverse community of liquidity providers that will complement its various liquidity programs.
According to Binance, the new offer is designed to address the scenario that has liquidity programs at most top exchanges skewed towards Bitcoin (BTC).
Also inspiring this move is the situation where market-makers have to provide liquidity either across all pairs on a given crypto exchange or largely focus on crypto-fiat trading pairs. It means smaller liquidity providers across the industry are unable to effectively compete against dominant players.
With the new altcoin-only program, qualified providers will have the opportunity to enjoy up to 1 bps in rebates – compared to the 0.8 bps at most exchanges.
“We are responding to demand from market participants, particularly small and medium-sized liquidity providers, who want the choice to focus on market-making for altcoins.” said Catherine Chen, head of Binance VIP & Institutional. “Our new altcoin-focused liquidity program helps liquidity providers of all levels compete in the marketplace without the pressure to market-make across bitcoin and other large cap crypto.”
Eligible for the program are small liquidity providers with quality strategies and boast up to $20 million in 30-day trading volume on Binance spot and margin. The program is also open for application for participants meeting the criteria on other platforms.
Binance plans to initially support 18 altcoins, with this list seeing a continuous review amid market demand. The first batch will include trading pairs for Vaulta, Internet Computer, Initia, Wormhole, Ondo, Filecoin, Kamino, Toncoin and Conflux among others.
