A report by @lo_tech states that 89% people believe market makers directly affect token prices. In reality, market makers: 🔹 Use strategies that are designed to be indifferent to prices 🔸 Ensure liquidity across market conditions Here’s the current state of market making 🧵

Market making works through constant adjustment. 🔹 Quotes shift dynamically as prices move 🔸 Inventory is rebalanced to avoid directional exposure 🔹 Spreads widen or tighten based on real-time risk Studies show poorly tuned strategies amplify volatility instead of dampening it.

Crypto markets rely on multiple models: 🔹 Order book MM uses active quoting to manage spreads + depth 🔸 AMM-based liquidity relies on pricing curves to ensure continuous execution 🔹 Hybrid models blend both for flexibility The odels perform differently as per market conditions.

There are two dominant deal structures in crypto MM: 🔹 Loan-based models provide MMs access to project tokens to deploy liquidity & support trading activity 🔸 Retainer models compensate market makers via a fixed fee for liquidity provision, execution quality & predefined KPIs

Large trading firms widely use loan-based MM. 🔹 @wintermute_t provides liquidity by deploying capital & tokens across centralized & on-chain markets 🔸 @DWFLabs supports liquidity through token access with active trading Token availability sits at the core of these models.

Retainer-based MM centers on discipline. 🔹 @PeanutTrade focuses on liquidity strategy, execution quality & stability 🔸 @cryptolabsio and @bitmakerfi deliver MM services structured around fixed fees & performance metrics These models prioritize execution over inventory exposure

Trust remains one of the biggest gaps in crypto MM. 🔹 34% say they’ve lost money in projects working with market makers 🔸 52% do not trust crypto market makers 🔹 67% believe more transparency would increase trust Perception around market making still needs to change

This is why choosing the right market-making partner matters. 🔹 Poor loan models can trigger token dumping 🔸 Wash trading & price targeting distort real demand 🔹 Undisclosed conflicts damage long-term trust Projects are seeking MMs who focus on transparent execution.

Market making is no longer a black box. 🔹 Liquidity quality shapes price behavior and trust 🔸 MM models trade off efficiency, control, and risk 🔹 Infrastructure, transparency & execution matter most As crypto markets mature, MM shifts from price optics to market infrastructure.

If this thread helped you understand how market-making models work and why execution matters, give it an RT, anon! More builders should see how liquidity is actually designed and managed.