The State of Market Making Entering 2026
Crypto market making has always been a niche discipline, but the information asymmetry between founders and market makers has narrowed considerably over the last two years. The 2022 and 2023 market dislocations, which included several high-profile failures tied to custodial market making arrangements without adequate collateral, produced a generation of founders who ask better questions. That shift in founder sophistication, combined with formal regulation entering enforcement phase in both Europe and the United States, has changed the game.
This is not a guide to the basics of market making. For that foundation, see CEX market making explained and the founder's guide to token loan deals. This article is specifically about what has shifted in 2026 and what those shifts mean practically for token founders evaluating a market maker today.
Change 1: Regulation Has Formalized Market Making Obligations
The most consequential structural change for market makers in 2026 is that regulation is no longer theoretical. MiCA in Europe came into full force in late 2024, and an evolving US regulatory framework has created a two-jurisdiction environment that any credible market maker serving global projects must actively track and navigate. The direction of travel is clear even where specific rules are still being interpreted: market makers operating across the EU and US require documented compliance postures, and projects should factor this into their counterparty evaluation.
Market Makers Now Require CASP Licensing
Under MiCA, firms providing market making services for crypto assets in the EU must hold a Crypto Asset Service Provider (CASP) license. This has meaningfully winnowed the field of firms that can legally serve European token projects. Firms without CASP licensing who continue operating in EU jurisdictions face enforcement risk that passes through to the projects they serve. When evaluating a market maker in 2026, regulatory status is not a peripheral due diligence item. It is table stakes.
US Regulatory Direction Has Changed Institutional Participation
The US regulatory direction on crypto has shifted materially since 2024, with increasing clarity emerging from both the SEC and CFTC on how crypto assets are categorized and what obligations apply to firms providing market making services to US clients or projects with US token holders. The practical effect is that market makers serving institutional US clients now operate with formal compliance considerations that influence which projects they take on. Projects with cleaner, more defensible token structures are more attractive counterparties for regulated firms — creating a new selection dynamic that founders should understand.
For a detailed breakdown of what the SEC/CFTC framework means for token projects, see SEC and CFTC crypto framework 2026 explained. For the MiCA implications, see MiCA regulation and CEX market making.
Change 2: Non-Custodial Models Are Now the Expected Default
In 2021, custodial market making, where the market maker holds your tokens on their own accounts without posting collateral, was common. Several major market makers operated this way as standard practice. The 2022 market collapse exposed what this model meant in practice: when market makers became distressed, insolvent, or simply opportunistic, the project tokens they held were at risk. In several documented cases, project tokens were sold down by market makers facing their own liquidity needs, contributing to price collapses that damaged token holders and project reputations.
By 2025, non-custodial or token loan structures had become the founder expectation rather than a negotiated concession. By 2026, any market maker that resists this structure without a compelling and fully disclosed reason should be treated with significant skepticism.
Change 3: Venue Fragmentation Has Increased the Scope of the Job
In 2021, a credible market making engagement might cover five to eight exchanges. In 2026, a top-tier market making firm typically covers 40 to 60 venues simultaneously, including tier-1 CEXs, regional exchanges across Asia, the Middle East, and Latin America, and an increasing set of institutional DEX venues where professional market making infrastructure is viable.
This fragmentation has several implications for founders. First, the cost of quality market making has increased. Firms that can credibly cover 40+ venues require significant infrastructure investment, and that cost is reflected in engagement terms. Second, the signal value of "we operate on Binance and OKX" is lower than it was. In 2026, Binance and OKX presence is a baseline expectation, not a differentiator. The questions worth asking are about regional exchange presence, Korean exchange capabilities, and DEX market making depth.
Third, volume measurement has become more complex. With 40+ venues generating data, aggregate volume figures are easy to inflate through wash trading on low-scrutiny venues. What matters is volume quality: real depth, real spread, real activity on the venues that institutional investors and exchange listing committees actually evaluate. For a deeper look at this problem, see the CEX volume proxy problem.
What Has Not Changed: The Core Principles
Despite the shifts above, the fundamental principles of what good market making delivers have not changed. Tight spreads, deep order books, and consistent uptime on the exchanges that matter most to your investor base are still the outputs that define a successful engagement. Institutional investors still evaluate bid-ask spread and depth before sizing positions. Exchange listing committees still review order book health. Korean retail investors still interpret order book quality as a confidence signal.
The core question for founders evaluating a market maker in 2026 is the same as it was in 2021: does this firm have the infrastructure and incentives to maintain high-quality order books on the exchanges that matter for my token? Regulatory credentials and deal structure have become necessary conditions, but they are not sufficient. Performance on the fundamentals is still how you evaluate the engagement after it has started.
"Regulatory compliance and non-custodial structure have become table stakes. They define who is eligible to be in the conversation. Performance on spread, depth, and uptime is still how you evaluate who wins it."
— PlaceholderMM, Capital Markets DeskWhat Founders Need to Know in 2026
Due Diligence Has a Higher Floor
The minimum standard for evaluating a market maker in 2026 includes verifying regulatory status (CASP in the EU, appropriate registrations in the US), confirming a non-custodial deal structure with documented collateral terms, and reviewing written KPI commitments before signing. These are not advanced asks. They are the baseline that any credible firm can satisfy. For the full due diligence framework, see market making red flags to watch for when signing.
The Competitive Set Has Narrowed
Regulatory requirements, infrastructure investment, and reputational scrutiny have reduced the number of firms that can credibly serve mid-cap token projects across the full scope of what is now expected. This is not a bad thing for founders. It means the firms remaining in the market have cleared meaningful bars. The question is not "how do I find a market maker" — options are readily available. The question is how to evaluate which firm's capabilities, incentive structure, and track record are the best match for your project's specific exchange, market cap, and regional profile.
The Single-Mandate Advantage
One of the structural questions that has become more prominent in 2026 is whether a market maker's primary incentive is aligned with your project or whether it is managing a portfolio of conflicting interests across VC, OTC, and proprietary trading alongside its market making book. The conflict of interest problem has been well-documented in the post-2022 analysis of what went wrong in market making arrangements that harmed token holders. Single-mandate market makers — firms whose only financial exposure to your token comes through the market making engagement itself — represent a cleaner incentive structure that has gained favor among founders who understand this dynamic.
| Dimension | 2021 Standard | 2026 Standard |
|---|---|---|
| Deal Structure | Custodial common, collateral optional | Non-custodial with collateral expected |
| KPI Commitments | Informal or absent | Written, specific, enforceable |
| Regulatory Status | Rarely checked | Table-stakes due diligence |
| Venue Coverage | 5–10 exchanges typical | 40–60 venues expected for top firms |
| Founder Sophistication | Low, information asymmetry high | Higher, better questions being asked |
| Exit Clauses | Rarely negotiated | Performance-based exit expected |
