Deciphr Academy
Track 4 · Markets and DeFi · Module 19

Market makers: loan or retainer?

What market makers do, and how a token loan deal differs from a fee deal.

Lessons
7
Reading
41 min
Quiz
15 questions
Pass mark
80%
  1. 1What a market maker doesWhat does a crypto market maker do?5 min
  2. 2Why projects hire oneWhy do token projects hire a market maker?5 min
  3. 3The loan and call option dealWhat is a market maker loan agreement?7 min
  4. 4The retainer dealWhat is a market maker retainer?6 min
  5. 5Loan vs retainer, side by sideMarket maker loan vs retainer - which is better?6 min
  6. 6Red flags and real casesWhat does market manipulation by a crypto market maker look like?7 min
  7. 7Questions to ask before signingWhat should you ask a market maker before signing?5 min

The case used in this module

Each module tells its own made-up Brindlecove story, so details can differ from one module to the next.

Key words

Market maker
A firm that stands ready to buy and sell at prices it shows to everyone.1
Bid
The highest price a buyer will pay right now.2
Ask
The lowest price a seller will accept right now.2
Spread
The gap between the bid and the ask.2
Inventory risk
The risk of holding something you can't sell.3
Call option
The right to buy something at a fixed price in the future.4
Token loan agreement
A deal where a market maker borrows a project's tokens for a set time, usually paid with call options.3
Retainer
A deal where the project pays the market maker a fee, usually every month.3
Wash trading
Trading with yourself, or with a partner, to make it look like real buying and selling is happening.56
Spoofing
Placing buy or sell orders you plan to cancel before anyone can trade with them.5
Two-sided quote
Showing a buy price and a sell price at the same time.78
Sources
  1. Market makers (glossary). Investor.gov, US Securities and Exchange Commission.
  2. Ask price (glossary). Investor.gov, US Securities and Exchange Commission.
  3. Market Making: Predatory or Essential?. Presto Research (Min Jung), 10 May 2024.
  4. Lecture 7: market making in crypto (slides). Ruizhe Jia, Berkeley RDI DeFi course, Fall 2025.
  5. CFTC Glossary (wash trading, disruptive trading practice, market maker). US Commodity Futures Trading Commission.
  6. Affidavit in support of criminal complaint, United States v. Andriunin (Gotbit). US Department of Justice / FBI, 24 September 2024.
  7. SEC approves new rules for market maker quoting. US Securities and Exchange Commission, press release 2010-216, 8 November 2010.
  8. Market Maker Program Terms v1.1. Norwegian Block Exchange (NBX), 20 May 2026.