Market Maker Series — Kairon Labs

By Daniel Dal Bello, Director.
February 11, 2021–4 min read.

Hillrise Group
Feb 11 · 4 min read

Kairon Labs is a designated market maker and advisory firm based in Belgium. Their team has several years of experience making markets in the blockchain industry having built trading software for foreign exchange markets prior.

Jens Willemen is a Cofounder and Managing Partner of the firm.

In this post we share a conversation with Jens about the market-making business, Kairon Labs’s offering, exchanges and more.

Daniel Dal Bello
Jens, could you introduce yourself and Kairon Labs?

Jens Willemen
Sure. I’m the Managing Partner at Kairon Labs, a Belgian-based crypto-market-making and advisory firm. I’ve been working full-time in the space for a bit more than 4 years now coming from a traditional financial advisory services background at AXA Bank Belgium.

Kairon Labs was founded by Mathias, our CTO, and myself 3 years ago and we’ve been providing pretty much the same services over the years which are centered around market making for token projects.

Currently we are actively making markets for around 40 different token projects on about 50 different exchanges including some decentralized exchanges such as Uniswap and SushiSwap. On top of that we also provide full-stack advisory services for a select few token projects.

Daniel Dal Bello
How and why did you get into the crypto-market-making business?

Jens Willemen
I was actually on the token project advisory and investment side first helping projects go-to-market when I noticed that liquidity on the secondary markets is a major issue for these newly created digital assets.

Lack of liquidity and price discovery cause a lot of friction between the project team and early investors who usually want to see liquid and healthy markets very soon after the TGE.

It’s Kairon Labs’s mission to be a fair and reliable player helping token projects from all sizes achieve their liquidity and secondary market trading goals.

Daniel Dal Bello
What are the fundamentals that make for a successful market-making relationship — both from the market-maker and the client?

Jens Willemen
In my opinion the most important one is realistic expectations from both sides. Market making is not a magical solution that fixes a token project’s fundamental flaws such as a lack of a working product and an engaged community.

Making a healthy market is contingent upon the client having organic demand for the token. The market maker in turn must have a deep understanding of both the macro market and the project’s specific liquidity situation.

Constant communication between both parties is needed to keep the market making aligned with the project’s progress.

Daniel Dal Bello
What do you feel separates your business from the number of other premier liquidity managers in the space?

Jens Willemen
We are a boutique firm which means that we are working very closely with our clients. We pride ourselves on maintaining very direct communication and transparency regarding our actions. We try to deeply understand what the client’s expectations are so we can execute accordingly.

On the technical side we have integrated with over 200 exchanges, including decentralized exchanges such as Uniswap, SushiSwap, IDEX, and Binance DEX. Most premier market makers are not playing in this field yet.

Daniel Dal Bello
Typically we think of market-making as an activity for centralized markets, what value do you provide your clients when making markets on a decentralized exchange?

Jens Willemen
We can provide a number of automated functions on decentralized exchanges like Uniswap such as placing limit orders and profiting from arbitrage opportunities between these decentralized exchanges and centralized exchanges.

In some cases, for smaller sized clients we also prevent these arbitrage opportunities from happening when we as the market maker represent the majority of the orderbook on a CEX.

The last part where we add value is market intelligence. We provide detailed reports for our clients so they can understand what is actually happening on their market. This includes a lot of on-chain data which we store inside our trading platform.

Daniel Dal Bello
With front running, market manipulation, hype cycles and more, what are the biggest challenges you face day-to-day running your operation?

Jens Willemen
A rapidly growing market means that the challenges are always changing. Rather than try and predict what challenges may come up tomorrow, our algorithms are capable of responding to a myriad of different market anomalies in different ways. Risk management is still the most important thing in trading.

Daniel Dal Bello
As a maker of significant volume on many markets, what are your preferred exchanges to operate on and why?

Jens Willemen
Our favorite exchanges are venues with large organic volume and deep liquidity for altcoins. On top of that these exchanges should have reliable and fast trading infrastructure. Some of our main trading venues out of the 50+ exchanges we are covering right now are: Binance, Uniswap, Bithumb Korea and KuCoin.

Daniel Dal Bello
What should both new and established startups be looking for when choosing their market-making partner?

Jens Willemen
Token projects in any stage should be looking to work with credible market makers that have solid references. This means market making firms that have successfully made a healthy market for many clients on major and mid-tier exchanges.

We believe market making for altcoins is more than just running an algorithm, both teams should have a healthy working relationship.

Hillrise Group supports ambitious Web3 startups with early-stage venture capital and fundamental research.

Kairon Labs is a dedicated algorithmic market maker based in Belgium.

Connect with Hillrise Group

Hillrise Research

Fundamental research arm of Hillrise Group.

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