Crypto Market Makers Operating in the Dark: Study Exposes Industry's Biggest Transparency Failure

A sweeping review of over 150 crypto protocols has uncovered a startling reality: fewer than 1% actually disclose their market-making arrangements. We're looking at what may be the single largest transparency void in the entire industry—and it directly impacts how traders and investors price risk.

Crypto advisory firm Novora conducted the analysis across major protocol categories including decentralized exchanges, lending platforms, perpetual futures, layer-1 and layer-2 networks, bridges, and centralized exchange tokens. The protocols assessed ranged from roughly $40 million to $45 billion in fully diluted valuation. The verdict? Only Meteora, a decentralized liquidity platform, publicly disclosed market-making details in its 2025 Annual Token Holder Report.

"This is the single most consequential transparency gap in the industry," Novora founder Connor King stated on X, highlighting that traditional finance routinely mandates such disclosures. "In crypto, every market participant operates without this information," he added—and that's a massive problem for portfolio management and crypto analysis.

The Broader Investor Relations Crisis

The market-maker gap isn't happening in isolation. Novora's findings reveal a systemic investor relations failure across crypto protocols. Despite 91% of the 150+ protocols generating trackable revenue, only 18% published quarterly updates and a mere 8% issued token holder reports. The data exists; it's simply not being formalized into structured communication that traders and institutional investors need.

Here's the critical disconnect: third-party analytics infrastructure has matured significantly, with coverage rates exceeding 85% across platforms like Artemis, Token Terminal, Dune, DefiLlama, and Blockworks Research. The underlying information is accessible, but protocols aren't packaging it into official disclosures. For traders building risk models, this creates a dangerous information asymmetry.

Where Transparency Actually Exists (Barely)

Sector-level analysis shows uneven performance. Perpetual futures protocols and decentralized exchanges lead on disclosure and value accrual mechanisms, while layer-1 and infrastructure projects lag despite commanding larger market capitalizations. This inconsistency further complicates portfolio construction across different crypto market segments.

Why Market-Maker Opacity Matters

The lack of disclosure isn't just an IR nicety—it's a structural vulnerability. Opaque market-maker arrangements have fueled ongoing scrutiny, particularly around token loan structures where critics argue conflicts of interest emerge. The "loan option model" exemplifies the risk: projects lend tokens to market makers for liquidity provision, often tied to listing agreements. In practice, this can create perverse incentives to sell borrowed tokens into the market, tanking price while the market maker profits from volatility.

The SEC has previously charged crypto market makers with price manipulation, signaling regulatory awareness of these structural flaws. One Cointelegraph investigation documented how poorly-structured arrangements can quickly turn damaging—early-stage projects end up with weakened liquidity and decimated token performance while market makers extract value.