Deciphr Academy
Track 4 · Module 19 · Lesson 2 of 7 · 5 min read

Why do token projects hire a market maker?

Short answer

Projects hire a market maker to keep buy and sell prices showing on exchanges, within an agreed spread, for an agreed time.1 Exchanges also ask projects to tell them who their market maker is and on what terms.2

Thin marketDeep marketwide gap, few ordersnarrow gap, many ordersA big sale moves the price a lotThe same sale moves it a little
Fig. 2. With few orders, a big sale moves the price a long way. With many orders, it barely moves.

What a project is buying

Research published by Presto describes the service as keeping a set level of liquidity within a given spread for the length of the deal.1 In plain terms: when someone wants to buy or sell, there is a fair price waiting for them.

Exchanges care about this too. Norway's NBX, for example, asks the market makers in its programme to show buy and sell prices at the same time for at least half the time, with spreads no wider than 2% to 5% depending on the asset.3 In return they pay lower trading fees.3

Other exchange programmes reward trading volume instead. Coinbase's liquidity programme offers lower fees to firms that trade enough.4

Our viewA token with no one ready to trade it is hard to buy and hard to sell. Big holders can't exit without crashing the price, and new buyers stay away. That is the problem a market maker is paid to soften.

Being open about it

Binance tells projects to report their market maker's details, legal entity and contract terms to the exchange that lists their token.2 The same guidance says profit-sharing deals and guaranteed-profit deals with market makers are prohibited.2

What a market maker can't promise

Presto's research argues that a legitimate market maker makes no promises about price.1 In 2025 a firm whose proposal offered "Volume Support" admitted that its service included wash trading, and agreed to plead guilty.5

How projects pay

There are two common ways to pay a market maker: lend it tokens and pay with an option, or pay it a fee.1

Next

The next two lessons take each one in turn.

Sources
  1. Market Making: Predatory or Essential?. Presto Research (Min Jung), 10 May 2024.
  2. Guidance for projects working with market makers. Binance blog, 25 March 2026.
  3. Market Maker Program Terms v1.1. Norwegian Block Exchange (NBX), 20 May 2026.
  4. Coinbase Exchange Liquidity Program overview. Coinbase, June 2024.
  5. Cryptocurrency financial services firm agrees to plead guilty to charges related to market manipulation. US Department of Justice, District of Massachusetts, 21 January 2025.
← What a market maker doesNext: The loan and call option deal →

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.