Answering some of the most frequently asked questions from the Wootrade community — Where is trading volume coming from and why is it growing so fast?
Where is Wootrade’s liquidity coming from?
Wootrade is uniquely adept at aggregating liquidity from other sources, and not losing money in the process. This is a skill the team has acquired after decades of experience as quantitative traders in traditional and cryptocurrency markets. Wootrade then combines this liquidity into a network that collects trading volume from three sources: Institutional clients, WooFi pools currently on Binance Smart Chain (BSC), and WOO X Beta users.
The Wootrade network began in 2019 as a B2B only solution. Institutions could tap into Wootrade’s liquidity by connecting via API. It began to scale in 2020 when institutions, now growing in trust, started realizing the benefits of deep order books and zero-fee transactions. The network currently executes trades of 20+ institutional clients. Examples of these are exchanges, wallets, trading desks, and asset management services.
2. Entering DeFi
Soon after, we all witnessed the incredible emergence of on-chain trading in the DeFi space. The space was innovative, but early protocols were hampered by high fees and slippage. This is where Wootrade excels: deep liquidity with the best prices. Wootrade started their incursion to DeFi by creating the first WooFi pools on Binance Smart Chain (BSC): BNB/BUSD, DOT/BUSD, BTC/BUSD, ETH/BUSD, and LINK/BUSD. These pools went live on BSC and can be accessed via DODO, 1Inch, and Open Ocean aggregators.
Wootrade’s DeFi expansion and further plans are explained in the first part of the DeFi Manifesto:
The best of both worlds — Wootrade bridges CeFi liquidity with DeFi trading
Part one of Wootrade’s DeFi Manifesto explains how Wootrade is leveraging its leading liquidity and top market makers…
Note: Development is already underway on additional chains, including Ethereum and HECO. Recently, Wootrade has committed to working with Polygon to improve liquidity on their Layer 2 network as well.
3. WOO X Beta
This first party exchange, created for active traders, is still in a very early phase. To date, only around 700 users have registered, with about a third of those using the platform for trading. Volume fluctuates anywhere from $5m to $35m per day. As WOO X Beta grows, it could become an important source of volume.
Why is volume growing so fast?
The Wootrade network is showing rapid growth, setting new milestones almost every week since Q1 2021. For institutions, there appeared to be a strong link between better liquidity and higher trading volumes.
A second factor for growth was the rapid listing of new tokens. For example, $128m of DOGE was traded on May 4, 2021, a few weeks after being listed on the network.
On the DeFi side, our superior pricing execution was causing smart order routers such as DODO and 1inch to hit the WooFi pools with increasing frequency. As it was reported in April’s monthly roundup, 5 WooFi pools with only about $3.7m in total value locked (TVL), transacted over $890 million in trading volume — all with a fee of only ~0.05% per transaction.
Growth will continue to come from many angles — new clients, existing clients growing, new tokens listed, new users on WOO X, and additional support for more protocols and platforms in the DeFi space. This is compounded by the fact that the industry as a whole is growing, as more retail and institutional users discover the digital asset space.
How do I know it’s not fake?
Wootrade is not in a position to disclose details of institutional clients’ trading volume. This situation isn’t unique to Wootrade — other institutional-facing platforms don’t even reveal the names of their clients. However, we aren’t completely satisfied with this. In order to be more transparent, we are partnering with Chainlink to explore bringing certain aspects of the data on-chain, without compromising client privacy.
Wootrade to Bring Trading Histories From Professional Traders and Institutions On-Chain via…
We’re excited to announce that Wootrade will be giving institutions and professional traders an option to verify their…
The total volume coming from the WooFi pools is fully transparent to everyone and can be checked on https://bscscan.com. Fact-checkers can search for the contract address, click on “BEP-20 Token Txns” and view the latest transactions hitting the pools.
- BNB/BUSD: 0x0fe261aeE0d1C4DFdDee4102E82Dd425999065F4
- BTC/BUSD: 0xe3C58d202D4047Ba227e437b79871d51982deEb7
- ETH/BUSD: 0x9BA8966B706c905E594AcbB946Ad5e29509f45EB
- DOT-BUSD: 0xA7E60e63560C36D81d5Cf80e175941A6a80e6A3d
- LINK-BUSD: 0x64B2E6Bba89e5C9788A4Fb238694055a16c2f1e3
For WOO X, we are working with third party monitoring sites to improve transparency. In the upcoming weeks, we will look to get more accurate data displayed on CoinMarketCap and CoinGecko.
Why is trading volume important?
It’s important to remember that Wootrade is chasing the ultimate goal of making markets more efficient, which benefits everyone, including retail investors, institutional traders, and of course WOO token holders. Simply put, every transaction means that a trader on either CeFi or DeFi used the network to get zero or reduced fees with minimal slippage. This means less money is being taken by middlemen, and more is going back into the wallets of traders, encouraging the industry to grow as a whole.
For WOO holders, more flow leads to more rebates from market makers, which is a primary source of revenue for Wootrade. Every month a portion of the revenue is used for the buyback and burn of the WOO token. More institutions mean more WOO will be staked, also leading to growth. In Q3, we will look to bring even more uses for WOO through DeFi applications, social trading on WOO X, and innovative investment products that use Wootrade’s strengths to create and distribute yield.
Creating consistent token demand and incentivizing healthy growth: The WOO token buyback and burn
On February 10, Wootrade completed the first monthly buyback and burn of the WOO token. Read here for all the details:
Finally, there’s a large network effect in place. As the network grows in size, it becomes more attractive to larger players due to the diversity of flow, and trust that is established. This opens up even more markets for the Wootrade network to scale into over time.