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Distrust of market makers stems from price manipulation firms that presented themselves as market makers. Because there were no clear qualification requirements, the name was used freely.
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Legitimate market makers lower investors’ trading costs by narrowing spreads and standing ready as a counterparty at all times. Projects hand this work to independent market makers to avoid suspicion that they are intervening in their own token’s price.
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Crypto market makers do the same work as their counterparts in traditional finance, but they operate in a fragmented market where there is no framework for formal contracts with CEXs and where contracts with token issuers are not disclosed. Trading with one’s own…
