🔁Market-Make

TensorSwap lets you automate "buy low, sell high" with 1-click!

Due to impermanent loss, you are not guaranteed profit! See our article on impermanent loss and what it means.

NEVER deposit a rare NFT into a market-making order. If it sells for eg 10x the floor, your order will now be buying an NFT for 10x the floor, and someone will sell you a common.

Market-making orders on TensorSwap automate the process of buying low, selling high.

No longer do you need to monitor the NFT markets constantly, set of 9001 notifications & alerts, and adjust your listings every 2 minutes!

TensorSwap makes NFT flipping as easy as 1-2-3 clicks.

tl;dr

• Create a market-make order by navigating to the MARKET-MAKE tab

• Specify the maximum # of NFTs you would like to buy, and the NFTs you would like to sell

• The starting price is the price you start selling your 1st NFT

• As traders buy/sell into your market-making order, the price will adjust by the change by or "delta" (delta ≠ spread, see next point!)

• The desired fee is the gap between your buy/sell price (ie "spread"). You profit this much for every completed 1 buy + 1 sell

• Your profit is entirely the desired fee you collect (delta doesn't add to your profit: it only determines how wide of a price range your liquidity covers!)

• Only 0% Tensor Maker fee (no royalties) & only when selling via market make

Just tell me what to do

• NFTs to buy: # of additional NFTs you're ok with buying

• NFTs to sell: NFTs you're ok with selling

• Starting price: global floor

• Change by (delta): 5%

• Desired fee (spread): 5%

Tutorial

We will use CryptoDuckPunkz to demo: https://www.tensor.trade/trade/duckpunkzuniverse

1. Make sure you're in "PRO" mode

Toggle the switch at the bottom to "Pro"

2. Navigate to the MARKET-MAKE tab

3. Select # of NFTS you want to BUY

Select the maximum # of NFTs you would like to buy initially.

You will deposit enough SOL to buy up to this many NFTs when the order is first created (amount shown in the summary below).

Ideally, this is the additional # of NFTs you are okay with buying in the event that people only sell into your order.

You may end up buying more NFTs than initially specified eg with the profit you accumulate over time. Free NFTs, who can complain 🤷

4. Select the NFTs you want to SELL

Select the NFTs from your wallet that you want to deposit and sell initially.

Buyers can buy any NFT you deposit for the current price of the order. Ideally, these are NFTs you are okay with selling.

You can use either the slider (selects left to right):

Or manually select/de-select in the gallery:

You don't have to both buy & sell initially: you can create a market-making order which initially only buys NFT(s) or only sells NFT(s). The proceeds will then shift to the other side after the 1st trade so you can eventually both buy + sell. This is great if you'd like to buy into a collection: create a market-making order that buys only initially, but also collect some MM fees along the way 🤑.

5. Specify the starting price and how much the price changes after each trade

The starting price determines how much you will sell your 1st NFT.

The "change by" determines how much the price changes (in SOL or % of the price) for every buy/sell into your order.

Example:

Starting price = 10 SOL, change by = 1 SOL (desired fee = 0 for now)

Buy price: 9 SOL

Sell price: 10 SOL

Trade 1: Bob sells you 1 NFT at 9 SOL. The prices decreases by 1 SOL.

New buy price: 8 SOL

New sell price: 9 SOL

Trade 2: Alice buys 1 NFT at 9 SOL. The price increases by 1 SOL.

New buy price: 9 SOL

New sell price: 10 SOL

We're back at our starting prices!

Trade 3: Bob sells you 3 NFTs at 9, 8, 7 SOL each. The price decreases by 3 SOL.

New buy price: 6 SOL

New sell price: 7 SOL

See Bonding Curves for more details on the difference between Linear (in SOL) and Exponential (in %) deltas.

We recommend setting the starting price to be around the global floor and a price delta of 5% (higher for less liquid collections, lower for more liquid).

6. Specify the desired fee (spread) you want to charge

This is the spread or difference between the price you buy and sell at any given time.

For example, if your desired fee is 5%, you will get 5% of the current price if 1 buy and 1 sell completes your order.

"Starting Price" MINUS "Change By" MULTIPLIED BY "1 - Desired Fee" determines then for how much you will buy your 1st NFT.

The profit of market-making comes entirely from the desired fee or spread you specify here.

Delta discussed earlier does not add to your profit: it only determines how much the price changes per trade (and thus the price range your liquidity covers).

A larger fee means you make more per trade, but since your buy/sell price are further apart, you may see less volume from both sides at any given time.

We recommend a 5% fee, to begin with!

7. Review the details of your market-making order

The amount of SOL to be deposited will be shown if you're buying NFTs with this order.

You'll also see how much SOL you'll receive if all the NFTs you are selling are sold.

8. Sign & send your market-making order! Congrats 🎉

See Closing an Order for how to cancel your market-making order.