Gate Institutional AMA series 18 - Unlocking Crypto Market-Making with Autowhale

2023-12-26, 08:34

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![](https://gimg2.gateimg.com/image/1703579368873440022output.jpeg)
Gate Institutional Department hosted an Ask-Me-Anything session with Thomas Pratter, CEO & Founder of Autowhale, on Gate Group YouTube channel: https://www.youtube.com/watch?v=JVvt2w5b53E&t=871s
Follow Autowhale on social media
Website: https://autowhale.net/
Twitter: https://twitter.com/AutowhaleNet
LinkedIn: https://www.LinkedIn.com/company/autowhale/

Guest
![](https://gimg2.gateimg.com/image/1703579368696024245output1.jpeg)
**Thomas Pratter, CEO & Founder of Autowhale**

Welcome to the 18th episode of Gate Institutional AMA series. In this exciting session, Gokay from Gate.io Institutional Services hosts Thomas Pratter, the CEO & Founder of Autowhale, a prominent crypto Market Maker.
Thomas Pratter, Autowhale's founder, shares insights into his background and the genesis of Autowhale during the AMA. Autowhale's focus on building comprehensive trading infrastructure, its unique aspects in the crypto space, and strategies to handle market volatility are discussed.
Thomas delves into the challenges of trading infrastructure, Autowhale's innovative solutions, and its competitive edge in the market-making space. The conversation covers advice for pro traders entering crypto, Autowhale's milestones, and its positive experience collaborating with Gate.io.

## Introduction 
**Gokay (Host)**: Hello everybody! Welcome to the 18th episode of our Gate Institutional AMA series. This is Gokay from Gate.io Institutional services. 
Today we have an exciting AMA session with "Autowhale" a prominent crypto Market Maker. It's my pleasure to introduce our esteemed guest, Thomas Pratter, the CEO & Founder of Autowhale. Thank you, Thomas, for being a part of our AMA series. It's a pleasure to meet you. How are you feeling today?
**Thomas**: Thanks, Gokay. Thanks for having me. I'm doing well. How are you?
**Gokay**: I'm doing great. And now, we're having a fantastic meeting with you, and it feels amazing. We're thrilled to have you here, Thomas, to share your valuable insights and expertise on Autowhale and the cryptocurrency trading world. Without further ado, let's dive into the discussion and learn more about Thomas and Autowhale.

**Q1: So, tell us a little about yourself. Who is Thomas Pratter, what's your background?**
**Thomas**: Sure. My name is Thomas Pratter. I'm from Austria, the founder and CEO of Autowhale. My background is in computer science, actually. I completed my bachelor's degree and master's degree in Business Informatics at university and essentially founded Autowhale after university. It started as a side project during my time at university when I was unable to complete my bachelor's degree. This was around 2017 during the last bull market and before the subsequent bear market. A lot of ICOs (Initial Coin Offerings) were happening back then, and I was relatively new to crypto. I was networking and meeting people, getting to know a few token projects on Telegram, and that's when the journey began.
I connected with token projects and exchanges, leveraging my computer science background. I started building trading bots because the finance side of crypto fascinated me. I'm mostly self-taught in the trading and finance aspects, with my computer science background aiding significantly in developing robust software and trading bots. From there, the journey evolved. I began working full-time on Autowhale two years ago with my co-founders. We were self-funded up to that point but experienced significant growth last year, particularly during the bear market. We now have a team of 10 people and are fully committed to Autowhale, which is quite exciting.

**Q2: How did Autowhale come to life and how is it positioned in the market? 
Thomas**: As I mentioned, we started in 2017, or I started in 2017 during the bull market. I built a network of exchanges, token projects, and connected with other people in the space on Telegram, Reddit, Twitter, and other platforms. In 2019, I started Autowhale because I had met a few projects, and I thought that there might be others in need of relationships with exchanges and trading bots, etc. So, Autowhale began as a side project back then, as I mentioned. Over time, I delved into algorithmic trading, Market Making, and building trading infrastructure. Throughout the years, we developed our trading engine, which is now our main product. It's our white-label algorithmic trading engine, and we offer it primarily to funds, exchanges, or any crypto entity looking to automate their trading.
If you want to build your own trading strategy, launch trading funds, and you have nothing to start with, you come to us. We provide a comprehensive solution where you can start automating your trading with a user-friendly interface. You can control your bots, build your own trading strategy for your fund, and establish connections with over 50 exchanges. We are particularly excited to work with Gate.io, focusing on connecting with Gate.io.

**Q3: What is Autowhale's current focus?
Thomas**: Like our main focus, a couple of basic things. So first, as I mentioned, we have our trading engine where we enable funds to build their own trading strategies. But we also build and work on our own trading strategies that we develop, and we have a very scientifically focused approach. So we try to delve into academic papers and build trading strategies based on that. Currently, we specifically focus on machine learning, particularly reinforcement learning, if you're familiar with those algorithms, for market making. These are pretty exciting to work on. Apart from that, we also tap a bit into DeFi because we've been more focused on centralized exchanges so far. And, of course, we want to scale our product right now. So, getting in touch with partners and attending conferences, meeting people, and connecting with the right individuals.

**Q4: What are the biggest challenges when it comes to trading infrastructure and how is Autowhale solving that?
Thomas**: Right. So, regarding the challenges, we have a couple that we're facing and addressing, especially on the trading infrastructure side. It's a pretty niche market; there are not so many funds out there that might be using our software. But the main challenges that are there are, first, it's very complex. So, if you want to launch your own fund and build your own trading strategies, it's pretty complex to do that. You'll want to have a strong partner who can handle it because, even if you have knowledge, it would take a long time to build the entire infrastructure for it.

**Q5: What are some of the unique aspects of market making in crypto space compared to traditional financial markets?
Thomas**: Sure. So in comparison to TradFi, especially regarding regulation, there are a couple of differences. On the TradFi side, we have a higher barrier to entry concerning trading, such as automating your own trading. With crypto, all the exchanges have their APIs open, allowing you to easily connect to them, build your trading bots, and get started. There might be some issues regarding latency or connecting speed-wise to the servers, where you might need some special connections to the exchanges. However, in terms of operating and building your trading bots, you can easily get started in crypto.
In TradFi, there is no direct market access for everyone to the big stock exchanges. If you want to get started there, you face a way higher barrier to trade and need licenses to access those venues. Additionally, looking at the capital deployed, especially for smaller stocks listed on regulated exchanges, there are higher requirements regarding liquidity, market health, etc. On the very small crypto exchanges, it's like the Wild West, and there is no regulation or any requirements in terms of liquidity. This might be a negative aspect of crypto, but on the other hand, you should do your own research and avoid those exchanges.
In Market Making on TradFi compared to crypto exchanges, the capital deployed on those markets mostly comes from institutional traders and investors, like the market makers on the TradFi side. In crypto, you also have retail individuals who build their trading bots or work with limited orders on these exchanges themselves. There is certainly more focus, especially on all our clients, in the crypto verse.

**Q6: Do you have any advice for pro traders looking to get into crypto trading and market making?
Thomas**: Sure, so first things, if you're already familiar with trading and maybe also software development, I would highly recommend checking out resources that are already available in communities like on Reddit. There are a couple of nice subreddits for algorithmic trading, high-frequency trading (HFT), and even machine learning. Also, check out resources like Google Scholar and scientific papers where you will often find GitHub repositories already implementing trading strategies. You can start working from there and build your own trading strategies. Trading APIs have a low barrier to entry; they're open, and you can find sample implementations everywhere. So, just get started building something.
If you're really interested in working in this field, we are always looking for skilled people who are fascinated and have some knowledge in trading but also on the software development side. This combination is very unique for us, and we're always looking for people like that.

**Q7: How do you stay competitive in the Market Making space?
Thomas**: So for us, there are two areas to look at. We do market making for token projects, meaning that we help token projects fulfill specific requirements. These requirements could include certain spreads, depth, and KPIs that need to be met from the exchange side. Token projects sometimes need to fulfill these even if it contradicts being profitable. For example, we might need to provide certain liquidity on the buy or sell side even if the price is moving in the opposite direction, but it's necessary to meet these requirements, so we do it.
Additionally, we assist token projects in keeping prices stable across venues or deploying liquidity in specific areas where it's needed. Our system is modular and extendable, allowing us to address whatever is needed. If there's a unique algorithm or feature required from a trading perspective, we can make it possible with our solution.
When it comes to profit-oriented market making, it's not always about the most complex algorithm. Sometimes, it's about finding an edge in the market. For instance, identifying a large buy or sell order that's constantly renewing on the market and front-running these with smaller orders can be a strategy. It's about leveraging these seemingly simple edges until they're no longer effective. This requires staying vigilant and adapting to changes in the market. It might involve being fast to the market with low latency, which could necessitate special access to exchanges, such as locating ourselves nearby for a faster connection. The key is to identify and capitalize on your edge, whether it's a pattern or speed advantage, and constantly seek new opportunities.

**Q8: How does Autowhale handle extreme market volatility, such as the one we've seen in crypto space recently?
Thomas**: So basically, when there is high volatility in the market, if you're speaking from a market-making perspective, you want to ensure that you're coding wider spreads. This means that you're not stuck holding one side of the inventory. Mitigating this risk is crucial because during volatile market movements, you may end up with an imbalance in your inventory.
For instance, if you're trading in Bitcoin and have $10 worth of dollars and $10 worth of <a href="/zh/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>, a 10% upward market move could lead to all your sell liquidity being concentrated within just 1%. As a result, when the price moves up by 1%, you might only have dollars left, making it impossible to provide anything more on the sell side. Therefore, widening spreads and placing orders with more resilience is essential.
When discussing our trading infrastructure in general, this is also quite important. During highly volatile moments in the market, we aim to build our software to be resilient. The goal is to ensure that the bots operate independently, without depending on each other. We design the software to handle large amounts of data efficiently, placing orders frequently and updating order statuses in a timely manner. All these activities, especially the increased data <a href="/zh/price/flow-flow" target="_blank" class="blog_inner_link">Flow</a> during volatile moments, need to be managed to guarantee that our system runs smoothly during those times.

**Q9: How does Autowhale approach innovation and stay ahead of emerging trends in the cryptocurrency industry?
Thomas**: Also, here we try to be very science-focused. So we always strive to keep up with new algorithms or even new structural components that emerge. Our primary focus, as I mentioned, is mostly on machine learning going forward, especially in the realm of automated trading, algorithmic trading, and even portfolio management in general. This extends beyond the high-frequency nature of trading to encompass portfolio management, allocated resources, etc. Over time, these aspects will naturally evolve as we witness the progression of machine learning. Thus, we make a conscious effort to stay on top of these developments.
For us, being based in Europe, next year MiCa (the Markets in Crypto Assets) regulation will come into place. Therefore, we need to keep up with that. This regulation will provide clearer guidance on what we can offer to the market and our clients. It will be particularly helpful when we obtain the necessary licenses. Additionally, we focus on keeping up with client demand because, of course, our infrastructure solution is tailored to meet the specific needs of the funds we work with. We ensure that we adapt accordingly and implement new features as requested by the market.

**Q10: Can you share any recent milestones or achievements that Autowhale has accomplished? 
Thomas**: Sure. We're, of course, excited to partner with Gate, which has been quite recent. So that's something cool in terms of the trading engine that we built. Basically, we've been building it over the last year or so and just finalized that. I mean, there are always new features getting added to it, so it's always a work in progress. But we have one very solid software infrastructure that we've built, which we just finished this year. We reached a point where we can say, "Okay, we're really proud to have that." So that's something that was very special this year for us.
As I mentioned, we started as a side project, and over the last few years, we've grown it quite a bit to 10 people. We're self-funded and grew in terms of revenue 10x over the last year during the bear market, so that's definitely an achievement that's pretty cool.

**Q11: How has Autowhale experience been so far working with Gate.io? 
Thomas**: It was great in terms of the technical support side; that was very cool. Especially when working on the technical side, it's fantastic to have someone to talk to and get fast responses on how to integrate certain stuff in terms of CPI types. That's great, and working with Suchon was very nice, along with all the other team members. I'm also excited to work with you guys.
Gokay: So from here, the shout-outs go to all our tech and team members working hard to keep Gate the best exchange. We want to say hi and thanks to them as well.

**Q12: And finally, what is the most important point do you want our audience to take away from today's AMA session？
Thomas**: Generally, I hope it's clear what we're doing in terms of trading infrastructure. I hope I've made it clear how the trading infrastructure is structured and what components may be important. I really want to clarify what market making looks like because it's often a big mysterious topic, especially for retail traders. I hope to shed some light on it. It can sometimes be more boring than it sounds, and it's really about keeping markets healthy, removing inefficiencies, etc. So, I hope that's kind of clear. Of course, there is market manipulation, but it doesn't necessarily have something to do with market making; it's more related to the general trading business.
**Gokay**: So, thanks for the comment, and I think you're right because there is a different side to market making, but it doesn't work that way. It's not in some mysterious way. Actually, there are codes and there are strategies. There are great people behind it, and it's trying to keep the market more stable and more effective. This is the main goal.

## Ending
**Gokay**: Thomas, I just wanted to say a big thank you for your time. Your insights were super informative, and I'm confident that our audience, who's always watch us, now has a better grasp of You and Autowhale. It was a pleasure talking to you and getting all the details. I'm even more curious about Autowhale now. Don't hesitate to contact Autowhale, check out their website, and learn more.
Before we end our session, Thomas, would you like to add anything else? 
**Thomas**: Well, generally, thanks for having me; those were great questions. I enjoyed it. Regarding Autowhale, yes, if there's anybody interested in working with us, either interested in our trading infrastructure or just in collabating with us to build cool things, feel free to reach out to me on LinkedIn or Twitter or via email if you're interested. I'm excited to work with you.
**Gokay**: Thanks, Thomas! Thanks to everyone who watches our AMA series. Follow us on social media, for more information write to our key account managers.

<VR>

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<div class="blog-details-info">
<div>Author: **Autowhale**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div class="info-tips">\*No content herein shall constitute investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product or project.
<div class="info-tips">\*The inclusion of any third-party products, services, entities, or content does not constitute an endorsement, recommendation, or affiliation by Gate.io. Please conduct thorough research and seek professional advice before making any investment decisions.
<div class="info-tips">\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.

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