We investigated over 150 main crypto protocols and located that disclosure of market-making preparations is sort of non-existent, regardless of their central function in token buying and selling.
of the studyA research performed by crypto asset advisory agency Novora discovered that lower than 1% of protocols disclose phrases associated to market makers. Throughout the whole dataset, just one protocol, decentralized liquidity platform Meteora, was discovered to publish particulars of its market-making preparations, citing the venture’s 2025 Annual Token Holder Report.
The research covers key sectors similar to decentralized exchanges, lending platforms, perpetual futures, layer 1 and layer 2 networks, bridges, and centralized change tokens, with protocols ranging in measurement from roughly $40 million to $45 billion at totally diluted valuations.
Novola mentioned the protocol was evaluated utilizing the Binary Transparency Framework, which covers disclosure practices and third-party knowledge protection, and cross-checked with public sources together with Artemis, Token Terminal, Dune, DefiLlama, and Blockworks Analysis.
“That is the one most vital transparency hole in our trade,” mentioned Novora founder Connor King. I wrote X said that such materials agreements are routinely disclosed in conventional markets. “In cryptocurrencies, all market contributors function with out this info,” he added.
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Cryptocurrency investor reporting hole
The findings present that the investor info (IR) hole in cryptocurrencies is broader. Novora mentioned that 91% of the protocols it studied generated trackable income, however solely 18% printed quarterly updates and eight% printed token holder stories, suggesting that whereas the info exists, it’s hardly ever integrated into structured investor communications.
On the identical time, third-party analytics infrastructure has matured, with protection exceeding 85% throughout main platforms. This means that though the underlying knowledge is broadly accessible, it’s hardly ever formalized in stories.
A sector-level breakdown reveals uneven transparency. Perpetual futures protocols and decentralized exchanges are usually forward in disclosure and worth era mechanisms, whereas L1 and infrastructure tasks lag behind regardless of their massive market capitalizations.
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Market maker buying and selling is topic to intense scrutiny
Cryptocurrencies have lengthy come beneath elevated scrutiny resulting from opaque market maker preparations, notably relating to token mortgage buildings, which critics say can create incentives to dump borrowed tokens into the market. The U.S. Securities and Alternate Fee (SEC) has beforehand charged so-called crypto market makers with value manipulation.
As reported by Cointelegraph, some market maker preparations are poorly structured and may rapidly develop into dangerous. One broadly used association, the “mortgage choice mannequin,” entails a venture lending tokens to a market maker, who deploys the tokens in liquidity provision and buying and selling actions, usually tied to an inventory settlement.
In observe, critics say, this construction creates robust incentives to promote borrowed tokens to the market, inflicting value declines that profit market makers, whereas concurrently lowering liquidity for early-stage tasks and doubtlessly hurting token efficiency.
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