Market liquidity concerns are an immediate threat to struggling crypto businesses as investors shift their funds away from exchanges and into self-custody.
To mitigate the negative effects of a bear market and ecosystem collapses, crypto exchange Gate.io established an industry liquidity support fund with a $100 million initial commitment.
Market liquidity concerns are an immediate threat to struggling crypto businesses as investors shift their funds away from exchanges and into self-custody. The $100 million commitment from Gate.io is intended to help companies restructure and adapt to changing market conditions.
The liquidity support aims to assist crypto businesses in remaining focused on their operations while being protected from market volatility. “The $100 million will be allocated to high-quality projects, market makers, high-frequency traders, and other institutional clients and HNW individuals,” according to the announcement.
Eligible cryptocurrency projects will receive up to $10 million in funding, primarily for market-making, or providing liquidity to traders. The company has not set an application deadline and hopes to expand the fund based on future market trends. Lin Han, Founder and CEO of Gate.io, stated in this regard: “Unforeseen hurdles during the bear market should not negatively affect users and inhibit innovation.” Now is the time to work together to rebuild the market, protect users, and fortify it.”
Furthermore, Gate.io’s Gate SAFU fund, established in 2019, continues to serve as a security blanket and insurance fund for user assets.
Binance, a cryptocurrency exchange, has also taken on the responsibility of assisting the ecosystem in surviving uncertain market conditions.
Binance CEO Changpeng Zhao recently announced plans to set aside $1 billion for an industry recovery fund. Binance’s proposed recovery fund aims to provide financial assistance to promising projects in financial trouble.
While Binance has yet to officially announce the fund’s launch, CZ highlighted plans to use a “loose” structure that will allow different industry peers to contribute to the fund.
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