Market liquidity worries are an urgent danger to faltering cryptocurrency businesses as investors move their money away from exchanges and into self-custody.
Crypto exchange Gate.io announced an industry liquidity support fund with an initial pledge of $100 million to mitigate the adverse effects of a bear market and ecosystem failures.
Market liquidity worries are an urgent threat to faltering crypto businesses as investors move their money out of exchanges and into self-custody. The $100 million pledge from Gate.io is intended to aid businesses that want to rethink their strategies and adjust to shifting market conditions.
The liquidity assistance attempts to shield cryptocurrency businesses from market risks while allowing them to focus on their core operations. The message stated:
High-quality initiatives, market makers, high-frequency traders, other institutional clients, and HNW individuals will receive the $100 million in funding.
Up to $10 million will be invested in eligible cryptocurrency initiatives, with the primary goal of providing liquidity for traders through market-making. The business has yet to establish an application deadline and intends to increase funds through future market developments. Gate.io’s founder and CEO, Lin Han, said the following in this regard:
Unexpected obstacles during the bear market should help users and continuous innovation. The moment is now to collaborate on reestablishing, safeguarding users, and strengthening the market.
The Gate SAFU fund, which Gate.io established in 2019, also acts as a security net and insurance fund for user assets.
Binance, a cryptocurrency exchange, has also volunteered to help the ecosystem endure volatile market conditions.
Changpeng Zhao, CEO of Binance, has disclosed plans to set aside $1 billion for an industry recovery fund. The planned recovery fund from Binance aims to give money to promising enterprises struggling financially.
CZ emphasized intentions to adopt a “loose” structure by allowing various industry colleagues to invest in the fund, even though Binance hasn’t formally announced the fund’s establishment.
Eligible crypto projects will receive funding up to $10 million, primarily for market-making, i.e., providing liquidity for traders.