Market maker loan vs retainer - which is better?
Neither is always better. A loan with an option costs little cash at the start but can give away value later, while a retainer costs cash every month and keeps the tokens with the project.1,2
Side by side
| Point | Token loan + call option | Retainer |
|---|---|---|
| How the market maker is paid | A call option over the borrowed tokens1 | A fee, usually monthly1 |
| Cash needed by the project | Little; options are used because projects lack cash1 | A fee every month1 |
| Who holds the tokens | The market maker, for the loan, often one to two years1 | The project; nothing is handed over up front2 |
| Targets | Often missing or vague2 | Clearly defined services2 |
| Short-term cost | Low cash cost1 | More expensive in the short term2 |
What people in the industry say
Cointelegraph quoted one industry executive saying the retainer model is "much better", because market makers then have reasons to work with projects for the long term.2 It quoted another firm saying plainly that it makes money from retainers.2
Presto, on the other hand, calls the loan and option model the most widely used structure, and argues the option protects against early pump-and-dump schemes.1
Mixed deals
Some contracts mix the two, with a token loan plus a retainer fee.1 Binance's guidance applies either way: spell out what may be done with any lent tokens, and avoid profit-sharing.3
- Market Making: Predatory or Essential?. Presto Research (Min Jung), 10 May 2024.
- Market maker deals are quietly killing crypto projects. Cointelegraph Magazine (Yohan Yun), 16 April 2025.
- Guidance for projects working with market makers. Binance blog, 25 March 2026.
General education built from the publicly available sources listed above. Not financial, legal, tax or investment advice. Naming a company, project or regulator is not an endorsement either way. Last checked 2026-10-22. Terms and disclaimer.