Ullubiy Bakuev and Artem Khachatryan of Coin Liquidity Solutions (CLS), in a recent interview, said they plan to expand their market-making services and increase market share.
Expansion and Client Retention Strategies
CLS focuses on offering cryptocurrency market-making services. They established their consultancy services early this year, responding to clients’ demands. Since launch, CLS’ team has grown their human capital and now services over 150 crypto projects and around 70 cryptocurrency exchanges.
The expansion of their market-making service and increasing their market share will concurrently happen as the team also plans to launch fundraising and marketing services. In 2022, Artem said the platform would also branch out to offer crypto legal services and introduce business-to-client (BSC) products, releasing differentiated products shaped by CLS’ experiences.
Artem is a Software Engineer by profession, graduating from the Lomonosov Moscow State University (MSU), working as the Head of Equity Trading at AIM Tech for two years to December 2019. However, he co-founded CLS in November 2018, where Ullubiy’s experiences in VC and business consulting came in handy in establishing the market-making firm.
The software engineer developed the first algorithms for CLS. At the same time, Ullubiy worked on the client management side and promoted their services. However, initially, the team doubted whether clients would be receptive to their ideas and back their plans of building and working for the long term. From an initial team of four members working with five clients, the team has grown to over 50 members to meet the needs of all their clients.
They are progressively working towards becoming a reliable company serving clients with the right products and services.
The co-founders revealed that a good company would technically work towards continuously offering suitable solutions for its clients, smugly fitting their vision-mission. To be great, they add, the company should always integrate professionals within their ranks.
These specialist experts understand their trade and directly add value from a technical perspective, coming to aid when called to task. From a qualitative side, they will help the company grow by attracting clients. To retain them, a great company would always have a well-designed motivation system catering to their needs.
These needs may vary from remuneration, welfare to psychological given the high pressure and ever-evolving needs of the markets. With a supportive system, high-value companies with a possibility of being future unicorns will use solid bases to expand at high rates.
Understanding Client Requirements and Doing Honest Business
According to Ullubiy, CLS has a client retention rate of over 90 percent because of its driving goals. The co-founder observes that the only way to crack and establish a reliable brand in crypto is to understand clients’ business goals and do honest business with them.
A big part of the CLS work plan is to provide clients with practical options in line with their core requirements. As part of CLS’s work framework, every acquired client is assigned an account manager. A stream of reports capturing needed metrics is created from this link to advice on key performance indicators (KPIs). The dynamic nature of crypto and trading specifically requires drawing data on organic trading volumes, liquidity depth, user growth, and other metrics to advise both parties’ quantitative and qualitative goals.
Offering services to over 150 clients, CLS’ team comprises fewer than 50 experts handling and meeting all the clients’ needs. Ullubiy says their deeper understanding of the space and objective of meeting clients’ goals are primary growth drivers. CLS plans to introduce more products capitalizing on their monthly growth of around 10 to 15 percent. By adding more services, the team will acquire more talent to their side.
When entering cryptocurrencies, a mistake businesses can make is failing to understand their business model and not hiring qualified professionals in areas they don’t fully grasp. Companies venturing into the crypto space keen to offer trading services must navigate judiciously and find the right market-making partner, saving resources and valuable time.
“Crypto market is full of scammers, unfortunately. Companies mislead and lie to potential clients to attract them and get money. The best example is exchange listings: the market is full of exchanges with fake volumes. Newbies do not realize that the exchange with 1-2 bln USD trading volume may have literally zero traders.”
“Sales managers of the exchanges lie about exchange stats and sell listings for insane money. However, if you ask any professional market-maker, you will get a real picture of every exchange. We have worked with all major exchanges and know if they have traders or not. I cannot stress enough how important it is to find the right partner at the early stage. This may save your company.”
Market Making is the Pulse of Crypto Trading
Unlike traditional markets, crypto is relatively illiquid. For example, gold’s market cap is estimated to be around $9 trillion, several folds the market cap of all cryptocurrencies. Analysts are confident crypto liquidity will improve as relevant regulations are formulated.
Still, blockchain and cryptocurrencies are relatively new, being in existence for less than 15 years. There is still work and refinement to be made from user experience, regulation, and marketing facets. However, their potential has been highlighted by the continuous work of sphere’s leaders like Changpeng Zhao of Binance—the creators of the Binance Smart Chain, Brian Armstrong of Coinbase—one of the first cryptocurrency exchanges with footprints in the U.S. and Europe, and Vitalik Buterin—the co-founder of Ethereum which is the home of DeFi. In one way or another, their products directly or indirectly require market-making services to thrive.
Market makers play a role in crypto by eliminating the vulnerability of tokens and manipulation from traders. Removing market makers from the equation makes a token illiquid. With this, respective projects might not be listed in a cryptocurrency exchange.
However, not all market makers are up to the task. A good market maker must be reliable and have high uptime. At the same time, they should offer good price prediction, employ the correct risk management, and have fast execution.