The inventory a market maker needs is roughly: number of venues × target depth per side within ±2% × a working multiple (to refill the book as orders fill and to rebalance) × (1 + a volatility buffer), in stablecoins for the bid side and the same value in tokens for the ask side. Spread % is (best ask − best bid) ÷ mid price × 100, and the ±2% depth band runs from mid × 0.98 to mid × 1.02.
Key takeaways
- Inventory is needed on both sides and on every venue.
- Ask each market maker for its own working multiple and buffer; they differ.
- If the result is more than your treasury, consider a token loan or LP-side liquidity.
Inventory for your depth targets
With the defaults (2 venues, $25,000 per side, a 3× multiple, a 25% buffer), the estimate is 2 × 25,000 × 3 × 1.25 = $187,500 in stablecoins and $187,500 in tokens (375,000 tokens at $0.50). These are placeholder inputs, not recommendations.
Spread and the ±2% band
Example: bid 0.995 and ask 1.005 give a mid of 1.000, a spread of 0.010, and a spread of 1.0% (100 bps). The ±2% band is 0.980 to 1.020. Add up all resting bids and asks inside that band to get depth at ±2%; see spread and depth explained.
Frequently asked questions
What is a working multiple?
Depth posted on the book is only part of what a market maker needs. When orders fill, it must refill quotes and move balances between venues. The working multiple is the ratio of total inventory to posted depth. It is an assumption you should ask each firm about.
What depth should we target at ±2%?
There is no universal number. Base it on the order sizes your users and expected traders place. One public 2025 DAO proposal set a minimum of USDT 40,000 depth per 2% from mid across all venues for an established token; see public market-maker deal terms.
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