What is a market maker retainer?

How the deal works

Under a retainer, the market maker is paid for keeping the market liquid over time, typically through monthly fees.¹ Cointelegraph describes it as a flat monthly fee for clearly defined services, rather than giving away tokens up front.² It calls the model less risky, but more expensive in the short term.²

Targets you can check

A retainer pays for clearly defined services, so it needs targets you can measure.² Exchange programmes show the kind used in practice: NBX asks for buy and sell prices showing at least half the time, and sets a widest allowed spread of 2% to 5% depending on the asset.³

In US stock markets, the rules go further. They make market makers keep both prices showing all through the trading day, inside a set band around the best price.⁴

Fee terms to watch

How a fee is worked out matters. In one criminal case, a market maker's agreement said no fee was due in months when it missed its trading volume targets.⁵ Its pricing was 15,000 USDT on signing for three months on one exchange, plus 2% of token sales and 20% of net profit.⁵ The firm's founder later pleaded guilty, and the firm admitted making manipulative trades to push up price and volume.⁶

Binance's guidance for projects prohibits profit-sharing and guaranteed-profit deals with market makers.⁷