Questions about Vega's market making

Hi, my team and I are researching about Vega and it would be really helpful if the Vega team could help us with the following questions:

  1. What is the difference between financial bond deposit and market making fee (if any)? If they are two separate charges, approximately how much will each cost?

  2. Are there spread and contract size requirements on Vega for market makers?

  3. Can Vega terminate a user’s license/ability to use the platform unilaterally? If yes, what triggers the exercise of such termination right?

Thank you!


Hi @rayccn, welcome to the community, I’ll try and give some quick answers below but please let me know if you have more questions.

Keep in mind that Vega is not an exchange but a decentralised blockchain, so market making involves participating in the protocol rather than having an agreement with an organisation. The Vega team are only building the software here and have no formal or commercial relationships for market making on the network.

There’s no fee in the protocol to be a liquidity provider (market maker) but you do need to put up a “bond” or stake on the network, similar to being a validator and also have sufficient balance for the margin required for your orders.

The size of the bond/stake is up to each liquidity provider: the larger the amount committed the more liquidity (measured in siskas, which measure order size * probability of trading) you must supply, and the larger the share of the rewards the protocol will award to you.

A liquidity fee is applied to price takers and this fee is used to reward liquidity providers.

No, the spread is taken into account in the calculation of the amount of liquidity supplied in siskas as described above, so the wider the spread you post the less liquidity you are deemed to have supplied, and the more order size you will need to meet your liquidity commitment.

No. Vega are the project development team and won’t be running nodes on the network or creating markets. We have no role or control in liquidity provider commitments (which will exist entirely on chain) and no master admin key or anything like that.

There will be various governance actions that can be voted on, by the community of token holders in some cases, and by the set of liquidity providers for a market in others, but the protocol doesn’t allow any of these to be used to prevent someone from using the network via governance.

Hope that helps!