Gate.io, a leading cryptocurrency exchange, announced the launch of an industry liquidity support fund with an initial worth of $100 million.
The Asian centralized exchange is making this move as a contribution towards mitigating the effect of the current bearish market which has been made worse by the implosion of the FTX Exchange.
Gate.io plans to use the fund to assist companies that are developing new strategies to wriggle out of the present market conditions.
It would give support to “high-quality projects, market makers, high-frequency traders, and other institutional clients and HNW individuals” so that they can maintain focus on the goals of their business without fear of finance.
This list of eligible entities is not limited to Gate.io partners but is also open to other platforms. They would only be expected to fall into the aforementioned categories. Each qualified crypto firm is liable to receive as much as $10 million for support as long as it falls within the fund’s scope of risk control.
Primarily, the fund is meant for market-making, that is, providing liquidity for traders. At present, there is no stipulated deadline for the collection of applications.
Healthy Crypto Firms Roll Out Recovery Funds
According to Dr Lin Han, founder and Chief Executive Officer (CEO) of Gate.io,
“We are supporting high-quality and strong projects and market facilitators so we can collectively continue moving blockchain forward,” and “Unforeseen hurdles during the bear market shouldn’t adversely affect users and inhibit innovation. Now is the time to work together on rebuilding, protecting users, and fortifying the market.”
The world’s largest cryptocurrency exchange Binance was the first to announce such a recovery fund in the wake of the FTX liquidity crunch.
Through its venture capital arm Binance Labs, the firm rolled out $1 billion to help stabilize the crypto industry. Shortly after, it was raised to $2 billion as it kept receiving support from other healthy crypto firms.
So far, Binance has received about 150 applications for its industry recovery fund. Seychelle-based crypto exchange OKX also created a $100 million recovery fund. OKX intends to use this fund to support companies with serious problems either as a result of exposure to FTX or a contagion.