BigTime｜Behind the Market Maker's Entry: The Transparency Gap in Market Making Contracts

Research Scope: Market Making Service Collaboration and Information Disclosure | Data as of 2026-09-13, sourced from public reports | BigTime focuses on market making, liquidity, and trading technology practices

Key Insights

• Industry statistics from April 2026 show that less than 1% of crypto projects disclose terms of market making collaborations, making it difficult to distinguish between service procurement and sales arrangements in "market maker entry" news.
• Market making collaborations typically include five types of terms: token lending, options arrangements, quoting obligations, fees, and exit conditions; when contract expiration overlaps with token unlocks, actual selling pressure is hard to verify.
• Readers can filter such news using four questions: scope of service, terms disclosure, relationship between expiration and unlock calendars, and duration of quoting obligations.
• "A certain market maker officially enters the market" is one of the most commonly released collaboration news by crypto projects. Readers usually interpret it as positive news: a professional institution is willing to provide liquidity for this token. However, behind the news is a document that is almost never made public, the market making service agreement. Industry statistics from April 2026 show that less than 1% of crypto projects disclose terms of market making collaborations (as reported by media). The obligations written in the contract, the number and expiration dates of options, and the calculation methods of fees are largely unseen by the outside world.

The transparency of this document directly determines whether "entry news" can be correctly interpreted.

I. What is Typically Written in Market Making Contracts

The collaboration between project parties and market makers usually revolves around a similar framework:

• Token lending and inventory. The project party or foundation lends a batch of tokens to the market maker as a source of inventory for continuous quoting. The final destination of this batch of tokens depends on how the contract is written.
• Options arrangements. A common structure is that the project party sells call options to the market maker while lending tokens: if the expiration price is below the exercise price, the market maker returns the tokens; if above, the market maker buys them at the exercise price. In other words, the same "collaboration" may inherently include a future buying right.
• Quoting obligations. Where, for how long, and to what standards of price difference and depth must be maintained, this is the core service purchased by the project party.
• Fees and incentives. How service fees are paid, whether there are token incentives, and whether they are linked to trading volume.
• Exit conditions. How long the contract lasts, under what circumstances it can be terminated early, and how inventory is handled.

Thus, market making collaborations simultaneously encompass three layers of arrangements: services, inventory, and derivatives. Which layer dominates determines the real impact of this collaboration on token supply.

II. Why Lack of Transparency is a Problem

The issue is that when terms are not disclosed, the same entry news can be interpreted in at least two ways.

Interpretation One: The project party procured liquidity services, the market maker earns the price difference and service fees, and both parties get what they need.

Interpretation Two: The project party, through a structure of token borrowing and options, arranges for part of the token's sale at a future point in time. "Market maker entry" also serves as a channel for sales.

Both interpretations legally and compliantly exist in this market, with the distinction lying only in the contract terms. When less than 1% of projects disclose these terms, readers cannot distinguish which interpretation they are seeing. A more practical scenario is token unlocks: when the expiration date of options or the date of inventory return overlaps with large-scale unlocks, the selling pressure the market bears may come from multiple arrangements, while the outside world can only see price movements.

Lack of transparency does not equate to manipulation. Judging specific actions requires complete trading records; a single order book screenshot cannot qualify, nor can speculations in public reports. We believe that the transparency issue refers to "inability to verify," not "there must be something wrong."

III. Two Comparable Samples

There are indeed moves in the industry towards transparency.

One is GSR's asset management line. Its actively managed ETF (BESO, listed on Nasdaq in April 2026) discloses holdings according to public fund rules, and its publicly available Core3 model portfolio updates configuration and performance weekly. In August 2026, a single-month drawdown exceeding 50% was cited by a third party, and it was displayed as usual (according to third-party reports). Presenting the portfolio and performance for scrutiny is a prerequisite for trust in asset management business, contrasting sharply with the black box of token market making contracts.

Another is the change in rules on the exchange side. Binance tightened market maker rules in March 2026 (as reported by media), indicating that trading platforms are also beginning to face the same information asymmetry.

Both samples do not represent that the industry has become transparent, but the direction is worth noting: when a type of asset seeks institutional funding, disclosure standards will be passively raised. This is also a clue when observing the tokenized asset market; the higher the institutional participation in the market, the closer the disclosure requirements for market making arrangements approach those of traditional markets.

IV. When Seeing Market Maker Entry News, Ask Four Questions

There is no need to wait for the industry to become transparent; readers can now filter such news using four questions:

1. What is the scope of service? Does the announcement state market making, OTC, or advisory services? Different services have different benefit structures.
2. Have the terms been disclosed? Token borrowing amounts, options structures, expiration dates—does the announcement include even one item? If none are present, treat this news as purely positive with caution.
3. What is the relationship between expiration and unlock calendars? Compare the contract cycle (usually 6 to 12 months) with the project's unlock schedule; overlapping periods deserve extra attention.
4. How long does the quoting obligation last? Who will provide liquidity after the service period ends? Announcements usually do not state this, but it is key to whether the "service" can translate into market quality.

These four questions do not predict prices or accuse anyone. They merely restore a one-sided positive news item into a verifiable fact checklist. The market's demand for such questions will only increase; whoever can disclose according to this standard first will gain the trust of institutional funds, which aligns with the overall pattern of the market making industry. For a complete study of GSR, see "In-Depth Study of GSR."

Risk Warning

Statistics on industry disclosure ratios and other data come from media reports, with limited samples and criteria; the description of contract structures is a general mechanism summary and does not target any specific project or company; relevant rules and disclosure practices may change with the regulatory environment.

Data Note: The disclosure ratio of market making contracts comes from industry reports in April 2026 (as reported by media); Core3 portfolio can be found in GSR Insights, with single-month performance figures cited by third parties; Binance rule adjustments are based on media reports from March 2026. The description of contract structures is a general analysis of industry mechanisms and does not target any specific project or company, nor does it constitute investment advice.

Disclaimer: This report is produced by BigTime Industry Research, based on publicly available information, and does not constitute investment advice, an offer, or a promise of returns; past performance does not guarantee future results. No part of this report may be reproduced or excerpted without written permission.

BigTime Industry Research continues to cover market making, liquidity, and institutional asset markets, with a series of reports being published.