If you are an aspiring crypto trader or a crypto investor, you need to learn what are liquidity providers. You would also need a list of the best liquidity providers of 2023.
Here, you can find everything you need to learn about liquidity providers.
So try this blog before investing in the crypto trade and get your desired result!
What are Liquidity Providers
Liquidity providers (LPs) are individuals or entities that supply financial markets with assets, ensuring that trades can happen smoothly.
Think of a marketplace. If you wanted to buy an apple, but no one was selling, you’d leave empty-handed.
In a financial market, you’d face a similar issue if you want to buy a stock or cryptocurrency, but nobody is selling. LPs step in by offering to buy and sell, ensuring there’s always someone to trade with.
So, why do they do this? LPs earn fees or rewards for making these assets available, making the market more fluid and efficient for everyone.
Top 10 Liquidity Providers in 2023 in the Crypto Realm
Cryptocurrency markets require liquidity to function efficiently. Liquidity providers play an essential role in facilitating smooth trading operations by ensuring there are enough buyers and sellers for various digital assets.
Let’s identify the 10 best liquidity providers of 2023, each with its unique strengths and offerings –
1. NinjaPromo

NinjaPromo is a comprehensive digital marketing agency specializing in the cryptocurrency sector. Their crypto market maker program aims to enhance token liquidity on exchanges by simultaneously buying and selling assets.
This method amplifies trading volumes, making tokens more attractive to traders. Along with this, NinjaPromo’s risk-based strategies, powered by advanced algorithms, help in timely market adaptation.
Services Provided
- Offers a crypto market maker program for increased token liquidity.
- Uses advanced software for timely market response.
- Begins with a strategic assessment for effective market-making.
- Continuously evaluates outcomes with sophisticated analytics.
Pros
- Risk assessment strategy minimizes exposure to risks.
- Allows for high trade volumes with low spreads.
- Can adjust strategies rapidly according to market conditions.
2. Galaxy Digital Trading

Galaxy stands as a premier cryptocurrency liquidity provider, managing assets worth over $2.5 billion.
Serving a vast number of institutional trading partners, Galaxy offers competitive pricing and ensures scalability through its unique digital ecosystem.
As a publicly traded entity, Galaxy champions transparency and trust.
Services Provided
- Manages over $2.5 billion assets for institutional partners.
- Offers globally competitive crypto pricing.
- Provides derivatives, lending products, and structured offerings.
Pros
- Leads the market in efficiency.
- Boasts world-class pricing.
- Gives access to more than 100 cryptocurrencies.
Cons
- Platform might be challenging for novices.
3. GSR Markets

With a decade-long track record, GSR is renowned for aiding clients in successfully launching cryptocurrency projects.
They are notable crypto liquidity providers, supporting exchanges and ensuring effective risk management. Their technology-driven approach ensures clients get optimal asset prices.
Services Provided
- Aids in launching cryptocurrency projects.
- Creates liquid markets for exchanges.
- Uses proprietary trading technology for client needs.
Pros
- Engages with high-net-worth investors.
- Has a decade of profound market knowledge.
- Employs its proprietary trading tools.
Cons
- Some platforms misuse GSR’s name for deceit.
4. BitGo

BitGo, a leading digital asset trust company, doubles as a cryptocurrency liquidity provider.
With a strong focus on security and asset protection, BitGo offers institutions and traders reliable access to digital asset liquidity, enabling seamless trading.
Services Provided
- Offers liquidity solutions while prioritizing asset security.
- Provides access to various digital assets.
- Extensive experience in digital asset custody and trading.
Pros
- Strong emphasis on asset security.
- Access to a diverse range of digital assets.
- Experience in both custody and liquidity provision.
Cons
- Primarily focuses on institutional clients.
5. Empirica

Starting in 2010 as a trading software company, Empirica transitioned into a crypto liquidity provider, leveraging its proprietary software.
They are responsible for significant daily volumes on designated exchanges and can provide liquidity to token projects in just months.
Services Provided
- Provides liquidity using proprietary software.
- Achieves high turnover on various tokens.
- Assists token projects in achieving tier 1 exchange listing.
Pros
- Seasoned crypto liquidity provider.
- Offers liquidity without fees.
- Adopts a client-friendly business model.
Cons
- Mainly focuses on small to medium token projects.
6. Kraken

Kraken is a well-established cryptocurrency exchange that is a reputable liquidity provider.
With a strong focus on security and regulatory compliance, Kraken offers traders and institutions access to various cryptocurrencies.
Their platform provides a liquid market for various digital assets.
Services Provided
- Offers trading and liquidity for a broad selection of cryptocurrencies.
- Emphasizes security and regulatory adherence.
- Provides advanced trading features for institutional clients.
Pros
- Highly regarded for security and compliance.
- Extensive cryptocurrency offerings.
- User-friendly interface for traders.
Cons
- May not offer as many services as specialized liquidity providers.
7. Huobi

Huobi, a globally recognized cryptocurrency exchange, is a liquidity provider. They offer a wide range of trading digital assets, catering to individual traders and institutions.
Huobi’s platform provides liquidity and trading services for numerous cryptocurrencies.
Services Provided
- Extensive variety of digital assets available for trading.
- Accessible to individual traders and institutional clients.
- Global presence and reputation in the cryptocurrency industry.
Pros
- Wide selection of digital assets.
- Serves both individual and institutional clients.
- Global recognition in the cryptocurrency sector.
Cons
- May not have the same specialized focus as dedicated liquidity providers.
8. B2Broker

B2Broker, an acclaimed crypto liquidity provider established in 2014, operates in over 40 countries, catering to more than 500 clients.
Their well-recognized strategies and tactics enable clients to access deep institutional liquidity pools and diverse settlement options.
Services Provided
- Extensive experience in multiple markets.
- Offers institutional access to deep liquidity pools.
- Provides settlement via wire transfers in multiple fiat currencies and major cryptocurrencies.
Pros
- Serves corporate, professional, and institutional clients.
- Boasts vast experience across diverse markets.
- Maintains a global presence.
Cons
- The array of offerings can initially be overwhelming.
9. Cumberland

Cumberland, established in 2014, is a subsidiary of DRW, a well-established trading firm with over 30 years of experience.
Offering 24/7 responsiveness and world-class trading experiences, they facilitate traditional voice and electronic trading for spot cryptocurrency liquidity.
Services Provided
- Access to traditional and electronic trading solutions.
- Facilitates spot cryptocurrency liquidity without pre-funding.
- Attracts large institutional clients, such as Goldman Sachs and Nomura.
Pros
- Backed by over 30 years of trading expertise.
- High reputation with notable institutional clients.
- Offers access to deep liquidity pools for better prices.
Cons
- Primarily caters to large institutions.
10. B2C2

Founded in 2015 and later acquired by a Japanese firm in 2020, B2C2 is a prominent crypto liquidity provider that ensures consistent liquidity in dynamic market conditions.
They aim to bridge the gap between traditional and crypto markets by introducing established market practices.
Services Provided
- Offers institutional access to cryptocurrencies.
- Ensures liquidity across changing market conditions.
- Operates globally, with headquarters in the UK and offices in Japan and the US.
Pros
- Provides innovative solutions.
- Utilizes proprietary crypto-native technology.
- Presence in major markets worldwide.
Cons
- Primarily caters to institutional clients.
Benefits of Liquidity Providers
Liquidity providers play a vital role in financial markets. But what exactly are the benefits of using them?
Let’s break it down into simpler terms.

1. Narrowing the Gap
Have you noticed that there’s often a difference between buying and selling prices in the market? This is called the spread.
Liquidity providers help narrow this gap. By doing so, they make it easier and more affordable for traders to buy or sell their assets.
Think of it like shopping; you’d naturally be attracted to places where prices are reasonable and stable.
2. Keeping the Market Calm
Ever heard of “whales” in trading? These are big players with lots of money. They can cause sudden and large price changes when they make large trades. This can be risky for smaller traders.
Liquidity providers step in to balance things out. They act like buffers, absorbing these big moves to keep prices steady.
It’s like having guards in a busy marketplace, ensuring everything runs smoothly.
3. Boosting Market Activity
More trades mean a livelier market. And who doesn’t like a busy marketplace? It indicates that it’s a good place to trade. Liquidity providers boost this activity. They add more trading options in the market, attracting more traders.
Imagine a busy marketplace; wouldn’t you be more inclined to visit, knowing there are plenty of buying and selling options?
Liquidity providers are like the unsung heroes of the financial market. They ensure stability, reduce costs, and keep things active.
So, the next time you trade, remember a liquidity provider is working behind the scenes to make your experience smoother.
High Returns for Liquidity Providers in Defi Apps
Have you heard about decentralized finance (defi)? It’s a growing trend where people can provide liquidity and earn substantial returns. Right now, a whopping $46.24 billion is locked in defi apps.
But what does this mean for liquidity providers? Let’s see.
- The Opportunity: Unlike traditional savings accounts with meager interest rates, defi offers annual returns of up to 400%. That’s significantly higher! But remember, these returns are not fixed and can change.
- Where to Look: Explore defi apps like Badger DAO and Demex to tap into these returns. They can offer attractive opportunities for liquidity providers.
- Caution: While the potential rewards are tempting, it’s essential to understand the risks involved, like market fluctuations and platform-specific risks. Do your research and be well-informed.
The following image would help you understand the stats related to liquidity providers in the DeFi market –

If you’re diving into decentralized finance, PancakeSwap is a name that should pique your interest. This DeFi platform, known for its high-yield farms and swapping services, offers opportunities for liquidity providers to earn attractive returns.
What is the difference between PancakeSwap V2 and v3?
PancakeSwap V3, compared to PancakeSwap V2, is a giant leap, offering several advantages, including:
- Lower trading fees: PancakeSwap V3 introduces four different trading fee tiers, ranging from 0.01% to 1%, depending on the asset pair’s volatility. This significantly improved over PancakeSwap V2‘s flat fee of 0.25%.
- Higher earnings for liquidity providers: PancakeSwap V3 allows liquidity providers to concentrate their liquidity within specific price ranges, leading to higher earnings. Additionally, PancakeSwap V3 offers a capital multiplier of up to 4000x, which can further amplify earnings potential.
- Increased capital efficiency: PancakeSwap V3 uses a more efficient liquidity pool design, which means that liquidity providers can provide the same amount of liquidity with less capital. This can help to reduce impermanent loss risk.
- A V3 “VIP” trading rewards program: This program will reward traders who provide liquidity to PancakeSwap V3.
- A position manager feature: This feature will allow liquidity providers to manage their positions more effectively, including setting stop-loss and take-profit orders.
Overall, PancakeSwap V3 significantly improves over PancakeSwap V2, offering traders and liquidity providers several advantages.
Here is a table that summarizes the key differences between PancakeSwap V2 and V3:
Feature | PancakeSwap V2 | PancakeSwap V3 |
---|---|---|
Trading fees | Flat fee of 0.25% | Four different fee tiers, ranging from 0.01% to 1% |
Earnings for liquidity providers | Lower earnings | Higher earnings, especially for liquidity providers who concentrate their liquidity within specific price ranges |
Capital efficiency | Less efficient | More efficient |
Other features | None | V3 “VIP” trading rewards program, position manager feature |
Crypto Market Makers vs. Crypto Liquidity Providers
The world of cryptocurrencies often introduces us to terms that sound similar but have different meanings and functions. Two such terms are ‘Crypto Market Makers’ and ‘Crypto Liquidity Providers.’
Let’s break these down to understand their differences better.
Have you ever wondered who ensures you can buy or sell cryptocurrencies whenever you want? That’s where Crypto Market Makers come into play.
They’re like the big players in the game – often massive institutions like banks and funds. They actively “set the stage” by holding vast amounts of currencies and ensuring there’s always a market to trade.
On the other side, we have Crypto Liquidity Providers. Think of them as the bridge between brokers (who handle your trade) and these big market makers.
They make sure there’s enough “liquid” or available currency for trading, but their role isn’t just about setting prices.
Here’s a simple table to showcase their differences:
Feature | Crypto Market Maker (B-Book Broker) | Crypto Liquidity Provider (A-Book Broker) |
Main Role | Mediators ensure ample currency availability | Serve as a bridge between brokers and market makers |
Who are they? | Big institutions like banks and funds | Also, use systems, but their main goal is to ensure there’s enough currency available for trading |
Activity Scope | Primarily focused on making the market | A wider range of activities, not just setting prices |
How they work | Use advanced systems to decide optimal buying and selling prices based on various factors | Also use systems, but their main goal is to ensure there’s enough currency available for trading |
How they earn | Profit from the price difference between buying and selling | Earn from this price difference too, but also get fees from exchanges or trading platforms |
While Crypto Market Makers and Liquidity Providers are essential for the smooth functioning of the crypto market, they have distinct roles and methods of operation.
Tips for Picking a Crypto Liquidity Provider in 2023
Want to choose the right place to trade your cryptocurrencies? Here’s a simple guide I follow when picking a crypto liquidity provider. This can also help you:
- Look at Their Past: Go for providers who’ve been around and have good feedback from users. What do others say about them? Do they have a solid history?
- Follow the Rules: Ensure they stick to legal rules and have the right licenses. This means they’re serious, and your money is safer with them.
- Variety Matters: It’s good if they offer a wide range of cryptocurrencies, not just the famous ones. This means more trading options for you.
- Watch Out for Costs: See how much they charge for trades. Are their prices clear? Avoid those who don’t explain their fees well or have hidden charges.
- Think About the Future: Can they handle more trades if you grow bigger or if the market changes? It’s always good to think ahead.
So, when looking for a place to trade, keep these simple points in mind. It’ll help you find a provider that matches what you need.

Wrapping Up
Liquidity providers play a pivotal role in the bustling world of finance.
They’ve genuinely solidified their place at the heart of every transaction by ensuring seamless trades and constant market activity.
So, the next time you ponder the question, what are liquidity providers? Remember, they’re the unsung heroes working tirelessly to keep our financial world turning smoothly.