5 Things Everyone Gets Wrong About Crypto Market Makers

This is the most widespread misconception and the one that causes the most confusion. A market maker does not set the price of a token. They manage the order book around the price — placing buy and sell orders at levels that reflect current market conditions. The price itself is determined by supply and demand: how many people want to buy, how many want to sell, and at what price those orders clear.

What a market maker controls is the spread (the gap between the best buy and sell price) and the depth (how many orders exist at each price level). A tight spread and deep order book makes the token easier and cheaper to trade. A wide spread and thin book makes it expensive and volatile. Neither of those outcomes is the same as "controlling price."

When a token's price moves dramatically, the cause is almost always a significant imbalance in buy or sell pressure — large holders exiting, exchange listings driving demand, or macro market conditions. A market maker can slow the impact of that pressure by providing bid-side depth, but they cannot reverse a market that has fundamentally more sellers than buyers.

This misconception likely comes from confusing market makers with retail brokers or casino operators — business models where the house does benefit when customers lose. A spot market maker's revenue model is structurally different. They earn the spread on each matched trade — a small margin captured on both sides of the order book regardless of which direction the market moves.

If a trader buys a token at the ask and another trader sells at the bid, the market maker captures the difference between those two prices. The direction of the market is largely irrelevant to that margin — what matters is volume. More trades means more spread capture. Fewer traders in the market means less revenue for the market maker, not more.

A market maker whose token's community collapses — because traders lost money and stopped participating — earns less. Their business interest is in a liquid, active, growing market, not a declining one.

Volume is the most visible metric in crypto trading — and the most misleading one for evaluating market making quality. Trading volume can be generated through wash trading (buying and selling the same token between related accounts), algorithmic activity with no real economic substance, and promotional campaigns that create temporary spikes with no lasting liquidity depth.

The metrics that actually reflect market making quality are spread consistency and order book depth. A token with moderate daily volume but tight, consistent spreads and meaningful bid depth is better served by its market maker than a token with high reported volume but spreads that widen to 3–5% during any real selling event.

Founders who evaluate market maker proposals based primarily on volume targets are selecting for the wrong thing. Ask for spread commitments and depth parameters — those are the numbers that reflect what a trader actually experiences when they try to buy or sell your token at fair value.

The term "market maker" covers a wide range of firms with fundamentally different business models, incentive structures, and operational approaches. Some firms are single-mandate liquidity providers — their only business is managing order books. Others operate market making alongside venture capital funds, investment books, and OTC desks.

Some firms use a token loan model where they borrow tokens, manage the order book, and absorb the financial risk of price movements. Others use a retainer model where the project pays a monthly fee regardless of performance. The deal structure determines whose interests are aligned with your token's success and whose are not.

Exchange coverage also varies significantly. A firm with strong Tier 1 global exchange connections may have limited or no active infrastructure on Korean exchanges like Upbit and Bithumb — which represent a meaningfully different and often higher-premium liquidity environment for mid-cap tokens. Assuming all market makers cover the same venues leads to listing strategies that miss significant price discovery opportunities.

This belief gets the causality backwards. Market making is not a reward for a successful token — it is part of the infrastructure that makes a token successful in the first place. A token that launches without a professional market making arrangement will typically have a wide spread on day one, thin bid depth during early sell events, and a price discovery pattern that reads as weak to exchanges conducting ongoing listing reviews.

The first 48 to 72 hours after a token listing are when the order book patterns that persist for weeks get established. A professional market maker in place from day one — with tested infrastructure, agreed spread parameters, and funded exchange accounts — creates a fundamentally different launch profile than a team managing order books manually or relying on organic activity alone.

For Korean exchange listings specifically, professional market making is effectively a prerequisite for the application process, not a post-listing addition. Exchanges like Upbit and Bithumb evaluate applicants' existing liquidity quality as part of their review criteria. Applying without a market making arrangement in place significantly reduces the probability of a successful listing outcome. For the full pre-listing timeline, see Market Making for TGE: The Step-by-Step Guide.