H20 Docs
  • H20
  • On-chain Token Economy Management
  • Non-Negotiables
  • Getting Started
  • Token Lifecycles & H20 Services
    • Token Lifecycles & H20 Services
      • Pre-Launch Phase
      • Post-Launch Phase
        • Treasury Establishment & Management
        • On-chain OTC
        • Peg Management
        • Buybacks
        • Liquidations
        • Trading
      • Vesting Phase
        • Managing Token Unlocks
      • Consolidating and Maturing Phase
        • Sustainable Self-Custody Market-Making
  • STRATEGIES
    • Auction-based DCA
    • Fixed Grid
    • Recharging Grid
    • Dynamic Spread (Single sided)
    • Dynamic Spread (Double sided)
    • Dynamic Spread (Fast or Slow Exits)
  • Case Studies
    • Profitable Market-making With Correlated Token Pairs
    • Profitable Market-making with Uncorrelated Token Pairs
    • Managing Inflation From Token Vesting
    • Turn Low Volume into High Growth with H20
    • Bootstrap Your Token with H20
    • Bring CEX-Style Trading On-Chain with H20
    • Stabilize Your Token Peg with H20
    • Capture Value from Price Run-Ups with H20
    • Transform Downtrends into Sustainable Liquidity Growth with H20
  • Security & Risk Management
    • Security Model
    • Risk Management
  • Reporting
    • Reporting
      • Example Reports
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  • Challenge
  • Solution
  • Result
  1. Case Studies

Profitable Market-making With Correlated Token Pairs

Challenge

To successfully make markets using the project's own token and a correlated asset (e.g. the token underpinning the blockchain network they trade on) rather than depleting the treasury's valuable store of stable coins.

Solution

Market-make the project token with their network token. The goal is to use the project's own token (high supply low value) and grow the network token.

Result

Despite operating in declining market conditions, H20's strategies delivered the following performance with zero slippage and no gas costs to the strategy deployer:

  1. TKN/WPOL: 600+ trades on Polygon with 157.7k TKN and 15.4k WPOL volume, 25.98% ROI in WPOL (benchmarked against the token pair), increased WPOL holdings by 2,724 in under 60 days. Strategy maintained optimal spreads throughout market volatility.

  2. TKN/WPOL: 100+ trades on Polygon with 14.52k TKN and 7.8k WPOL volume, 708.96% ROI in WPOL, increased WPOL by 2,481 in under 15 days (56.7% APY). Performance achieved despite significant market downturn.

  3. TKN/WETH: 60+ trades on Base with 0.46 WETH and 175.4k TKN volume, 12.08% ROI in WETH, increased WETH by 0.2 in under 20 days. Strategy executed efficiently without requiring gas payments from the deployer.

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Last updated 23 days ago