[{"data":1,"prerenderedAt":2491},["ShallowReactive",2],{"blog-in-house-market-making-vs-hiring-a-market-maker":3,"related-in-house-market-making-vs-hiring-a-market-maker":865},{"_path":4,"_dir":5,"_draft":6,"_partial":6,"_locale":7,"title":8,"description":9,"date":10,"author":11,"category":12,"tags":13,"keywords":18,"image":24,"readTime":25,"body":26,"_type":859,"_id":860,"_source":861,"_file":862,"_stem":863,"_extension":864},"/blog/in-house-market-making-vs-hiring-a-market-maker","blog",false,"","In-House Market Making vs Hiring a Market Maker: Which Should Your Token Choose?","In-house market making vs hiring a market maker: compare cost, capital, risk, exchange access and control, with a decision framework for token project teams.","2026-10-25","Fibonacci Capital","Market Making",[14,15,16,17],"market making","liquidity","market maker selection","token launch",[19,20,21,22,23],"in-house market making","hire a market maker","in-house vs outsourced market making","should a token project run its own market making","market maker for token project","/assets/images/blog/in-house-market-making-vs-hiring-a-market-maker.jpg","9 min read",{"type":27,"children":28,"toc":838},"root",[29,37,44,51,56,112,118,123,149,163,169,382,387,393,399,404,410,415,421,426,432,437,488,501,507,512,563,569,574,644,650,737,743,815,821,826],{"type":30,"tag":31,"props":32,"children":33},"element","p",{},[34],{"type":35,"value":36},"text","In-house market making means your own team runs the bots, funds the inventory and manages the risk of quoting your token on exchanges. Hiring a market maker means a specialist firm does that work under a contract, using its own systems and, depending on the model, its own capital or tokens you lend it. For most token projects, hiring is the better choice at launch: the fixed costs of a competent desk are the same whether it supports one asset or fifty, and the failure modes of a first-time in-house desk are expensive and public. In-house makes sense in a narrower set of cases, mostly for teams with existing trading talent, a single venue to cover, or a specific need for control. This comparison walks through the trade-offs and ends with a decision framework.",{"type":30,"tag":38,"props":39,"children":41},"h2",{"id":40},"what-each-option-actually-involves",[42],{"type":35,"value":43},"What Each Option Actually Involves",{"type":30,"tag":45,"props":46,"children":48},"h3",{"id":47},"running-market-making-in-house",[49],{"type":35,"value":50},"Running market making in-house",{"type":30,"tag":31,"props":52,"children":53},{},[54],{"type":35,"value":55},"An in-house setup is more than a bot. To quote continuously and safely you need:",{"type":30,"tag":57,"props":58,"children":59},"ul",{},[60,72,82,92,102],{"type":30,"tag":61,"props":62,"children":63},"li",{},[64,70],{"type":30,"tag":65,"props":66,"children":67},"strong",{},[68],{"type":35,"value":69},"Trading infrastructure",{"type":35,"value":71},": exchange connectivity, order management, real-time inventory tracking, kill switches and monitoring.",{"type":30,"tag":61,"props":73,"children":74},{},[75,80],{"type":30,"tag":65,"props":76,"children":77},{},[78],{"type":35,"value":79},"Strategy and parameters",{"type":35,"value":81},": spread targets, depth per level, inventory limits, how quotes react to volatility and to moves on other venues.",{"type":30,"tag":61,"props":83,"children":84},{},[85,90],{"type":30,"tag":65,"props":86,"children":87},{},[88],{"type":35,"value":89},"Capital",{"type":35,"value":91},": both your token and the quote asset (usually stablecoins) on every venue you cover, sized to absorb flow without running out.",{"type":30,"tag":61,"props":93,"children":94},{},[95,100],{"type":30,"tag":65,"props":96,"children":97},{},[98],{"type":35,"value":99},"People",{"type":35,"value":101},": someone accountable for the desk at all hours, because markets do not close and exchange incidents rarely happen during office time.",{"type":30,"tag":61,"props":103,"children":104},{},[105,110],{"type":30,"tag":65,"props":106,"children":107},{},[108],{"type":35,"value":109},"Controls",{"type":35,"value":111},": who can move funds, how API keys are scoped, how losses are reported and when quoting stops.",{"type":30,"tag":45,"props":113,"children":115},{"id":114},"hiring-a-market-maker",[116],{"type":35,"value":117},"Hiring a market maker",{"type":30,"tag":31,"props":119,"children":120},{},[121],{"type":35,"value":122},"A hired market maker brings its own infrastructure, strategy team and exchange relationships. The project usually provides one of two things:",{"type":30,"tag":57,"props":124,"children":125},{},[126,138],{"type":30,"tag":61,"props":127,"children":128},{},[129,131,136],{"type":35,"value":130},"A ",{"type":30,"tag":65,"props":132,"children":133},{},[134],{"type":35,"value":135},"token loan",{"type":35,"value":137}," with call options (the loan/option model), where the firm borrows tokens, quotes with them and may buy them at agreed strike prices later.",{"type":30,"tag":61,"props":139,"children":140},{},[141,142,147],{"type":35,"value":130},{"type":30,"tag":65,"props":143,"children":144},{},[145],{"type":35,"value":146},"retainer",{"type":35,"value":148},", where the project pays a fee and often provides both tokens and quote capital, and the firm operates them under agreed KPIs.",{"type":30,"tag":31,"props":150,"children":151},{},[152,154,161],{"type":35,"value":153},"The models and their trade-offs are covered in detail in ",{"type":30,"tag":155,"props":156,"children":158},"a",{"href":157},"/blog/crypto-market-making-fees-models",[159],{"type":35,"value":160},"crypto market making fee models",{"type":35,"value":162},". What matters here is that in both cases you are buying operational capability, not just a bot.",{"type":30,"tag":38,"props":164,"children":166},{"id":165},"side-by-side-comparison",[167],{"type":35,"value":168},"Side-by-Side Comparison",{"type":30,"tag":170,"props":171,"children":172},"table",{},[173,197],{"type":30,"tag":174,"props":175,"children":176},"thead",{},[177],{"type":30,"tag":178,"props":179,"children":180},"tr",{},[181,187,192],{"type":30,"tag":182,"props":183,"children":184},"th",{},[185],{"type":35,"value":186},"Factor",{"type":30,"tag":182,"props":188,"children":189},{},[190],{"type":35,"value":191},"In-house",{"type":30,"tag":182,"props":193,"children":194},{},[195],{"type":35,"value":196},"Hired market maker",{"type":30,"tag":198,"props":199,"children":200},"tbody",{},[201,220,238,256,274,292,310,328,346,364],{"type":30,"tag":178,"props":202,"children":203},{},[204,210,215],{"type":30,"tag":205,"props":206,"children":207},"td",{},[208],{"type":35,"value":209},"Upfront cost",{"type":30,"tag":205,"props":211,"children":212},{},[213],{"type":35,"value":214},"Engineering build or software licences, plus hiring",{"type":30,"tag":205,"props":216,"children":217},{},[218],{"type":35,"value":219},"Contract setup; retainer or token loan terms",{"type":30,"tag":178,"props":221,"children":222},{},[223,228,233],{"type":30,"tag":205,"props":224,"children":225},{},[226],{"type":35,"value":227},"Ongoing cost",{"type":30,"tag":205,"props":229,"children":230},{},[231],{"type":35,"value":232},"Salaries, infrastructure, exchange fees, trading losses",{"type":30,"tag":205,"props":234,"children":235},{},[236],{"type":35,"value":237},"Retainer, option dilution, or both",{"type":30,"tag":178,"props":239,"children":240},{},[241,246,251],{"type":30,"tag":205,"props":242,"children":243},{},[244],{"type":35,"value":245},"Capital required",{"type":30,"tag":205,"props":247,"children":248},{},[249],{"type":35,"value":250},"All token and quote inventory, on every venue",{"type":30,"tag":205,"props":252,"children":253},{},[254],{"type":35,"value":255},"Varies by model; loan model can reduce quote capital needs",{"type":30,"tag":178,"props":257,"children":258},{},[259,264,269],{"type":30,"tag":205,"props":260,"children":261},{},[262],{"type":35,"value":263},"Time to go live",{"type":30,"tag":205,"props":265,"children":266},{},[267],{"type":35,"value":268},"Typically months for a robust setup",{"type":30,"tag":205,"props":270,"children":271},{},[272],{"type":35,"value":273},"Typically weeks once terms are agreed",{"type":30,"tag":178,"props":275,"children":276},{},[277,282,287],{"type":30,"tag":205,"props":278,"children":279},{},[280],{"type":35,"value":281},"Exchange access",{"type":30,"tag":205,"props":283,"children":284},{},[285],{"type":35,"value":286},"Standard API tiers unless you negotiate otherwise",{"type":30,"tag":205,"props":288,"children":289},{},[290],{"type":35,"value":291},"Firms often have existing relationships and fee tiers",{"type":30,"tag":178,"props":293,"children":294},{},[295,300,305],{"type":30,"tag":205,"props":296,"children":297},{},[298],{"type":35,"value":299},"Cross-venue coverage",{"type":30,"tag":205,"props":301,"children":302},{},[303],{"type":35,"value":304},"Hard to do well across many venues",{"type":30,"tag":205,"props":306,"children":307},{},[308],{"type":35,"value":309},"Usually part of the service",{"type":30,"tag":178,"props":311,"children":312},{},[313,318,323],{"type":30,"tag":205,"props":314,"children":315},{},[316],{"type":35,"value":317},"Control and transparency",{"type":30,"tag":205,"props":319,"children":320},{},[321],{"type":35,"value":322},"Full",{"type":30,"tag":205,"props":324,"children":325},{},[326],{"type":35,"value":327},"Depends on reporting terms in the contract",{"type":30,"tag":178,"props":329,"children":330},{},[331,336,341],{"type":30,"tag":205,"props":332,"children":333},{},[334],{"type":35,"value":335},"Conflict of interest",{"type":30,"tag":205,"props":337,"children":338},{},[339],{"type":35,"value":340},"None with an external party; internal conflicts remain",{"type":30,"tag":205,"props":342,"children":343},{},[344],{"type":35,"value":345},"Possible if option terms reward the firm for a falling price",{"type":30,"tag":178,"props":347,"children":348},{},[349,354,359],{"type":30,"tag":205,"props":350,"children":351},{},[352],{"type":35,"value":353},"Key-person risk",{"type":30,"tag":205,"props":355,"children":356},{},[357],{"type":35,"value":358},"High; a small team is a single point of failure",{"type":30,"tag":205,"props":360,"children":361},{},[362],{"type":35,"value":363},"Spread across the firm's desk",{"type":30,"tag":178,"props":365,"children":366},{},[367,372,377],{"type":30,"tag":205,"props":368,"children":369},{},[370],{"type":35,"value":371},"Regulatory exposure",{"type":30,"tag":205,"props":373,"children":374},{},[375],{"type":35,"value":376},"The project itself is trading its own token",{"type":30,"tag":205,"props":378,"children":379},{},[380],{"type":35,"value":381},"The firm trades; the project still owns the arrangement",{"type":30,"tag":31,"props":383,"children":384},{},[385],{"type":35,"value":386},"None of these rows is decisive on its own. The weighting depends on your situation, which is where the framework below helps.",{"type":30,"tag":38,"props":388,"children":390},{"id":389},"where-in-house-looks-better-than-it-is",[391],{"type":35,"value":392},"Where In-House Looks Better Than It Is",{"type":30,"tag":45,"props":394,"children":396},{"id":395},"we-will-save-the-fee",[397],{"type":35,"value":398},"\"We will save the fee\"",{"type":30,"tag":31,"props":400,"children":401},{},[402],{"type":35,"value":403},"The fee is visible; the cost of running a desk is not. Engineering time, monitoring, inventory that sits idle, and the trading losses of an inexperienced desk are real costs that rarely make it into the comparison spreadsheet. A single stale order left on the book during a fast move can cost more than months of a retainer.",{"type":30,"tag":45,"props":405,"children":407},{"id":406},"we-know-our-token-better-than-anyone",[408],{"type":35,"value":409},"\"We know our token better than anyone\"",{"type":30,"tag":31,"props":411,"children":412},{},[413],{"type":35,"value":414},"Knowing the token is not the same as knowing order flow. A market maker's edge comes from managing inventory risk, reacting to cross-venue price moves and detecting toxic flow from arbitrage bots. Those skills transfer across tokens, which is exactly why specialists exist.",{"type":30,"tag":45,"props":416,"children":418},{"id":417},"we-will-have-full-control",[419],{"type":35,"value":420},"\"We will have full control\"",{"type":30,"tag":31,"props":422,"children":423},{},[424],{"type":35,"value":425},"You will, and that includes full responsibility. If your desk accidentally creates trades between your own accounts, or quotes in a way that looks like price support, the project's name is on it. Make sure any in-house setup has controls that prevent self-matching.",{"type":30,"tag":38,"props":427,"children":429},{"id":428},"where-hiring-has-real-downsides",[430],{"type":35,"value":431},"Where Hiring Has Real Downsides",{"type":30,"tag":31,"props":433,"children":434},{},[435],{"type":35,"value":436},"Outsourcing is not automatically safe. The common problems:",{"type":30,"tag":57,"props":438,"children":439},{},[440,450,460,478],{"type":30,"tag":61,"props":441,"children":442},{},[443,448],{"type":30,"tag":65,"props":444,"children":445},{},[446],{"type":35,"value":447},"Misaligned incentives.",{"type":35,"value":449}," Under loan/option deals, a firm can profit if the token falls and it returns borrowed tokens bought back cheaply. Strike structure and reporting terms matter.",{"type":30,"tag":61,"props":451,"children":452},{},[453,458],{"type":30,"tag":65,"props":454,"children":455},{},[456],{"type":35,"value":457},"Opaque reporting.",{"type":35,"value":459}," If you only see a monthly summary, you cannot tell whether KPIs were met. Insist on venue-level data.",{"type":30,"tag":61,"props":461,"children":462},{},[463,468,470,476],{"type":30,"tag":65,"props":464,"children":465},{},[466],{"type":35,"value":467},"Weak KPIs.",{"type":35,"value":469}," Volume targets alone are easy to hit and say little about liquidity quality. Spread, depth within a band and uptime are better measures; see ",{"type":30,"tag":155,"props":471,"children":473},{"href":472},"/blog/how-to-evaluate-market-maker-performance",[474],{"type":35,"value":475},"how to evaluate market maker performance",{"type":35,"value":477},".",{"type":30,"tag":61,"props":479,"children":480},{},[481,486],{"type":30,"tag":65,"props":482,"children":483},{},[484],{"type":35,"value":485},"Lock-in.",{"type":35,"value":487}," Long notice periods and unclear token return terms make it hard to leave a provider that underperforms.",{"type":30,"tag":31,"props":489,"children":490},{},[491,493,499],{"type":35,"value":492},"All of these are contract problems, which means they are negotiable before signing. A ",{"type":30,"tag":155,"props":494,"children":496},{"href":495},"/blog/market-maker-agreement-checklist",[497],{"type":35,"value":498},"market maker agreement checklist",{"type":35,"value":500}," is the right place to start.",{"type":30,"tag":38,"props":502,"children":504},{"id":503},"hybrid-models",[505],{"type":35,"value":506},"Hybrid Models",{"type":30,"tag":31,"props":508,"children":509},{},[510],{"type":35,"value":511},"The choice is not always binary. Common hybrids include:",{"type":30,"tag":57,"props":513,"children":514},{},[515,533,543,553],{"type":30,"tag":61,"props":516,"children":517},{},[518,523,525,531],{"type":30,"tag":65,"props":519,"children":520},{},[521],{"type":35,"value":522},"Hired CEX coverage, in-house DEX management.",{"type":35,"value":524}," The project manages its own liquidity pool positions on-chain (often protocol-owned liquidity) while a firm covers centralized exchange order books. This works well when your DEX setup is simple; if you are still choosing a venue, our list of the ",{"type":30,"tag":155,"props":526,"children":528},{"href":527},"/blog/best-dex-to-launch-a-token",[529],{"type":35,"value":530},"best DEXs to launch a token",{"type":35,"value":532}," covers the trade-offs.",{"type":30,"tag":61,"props":534,"children":535},{},[536,541],{"type":30,"tag":65,"props":537,"children":538},{},[539],{"type":35,"value":540},"Software licence plus advisory.",{"type":35,"value":542}," The team runs licensed market making software with external guidance on parameters. This gives control but keeps most of the operational risk in-house.",{"type":30,"tag":61,"props":544,"children":545},{},[546,551],{"type":30,"tag":65,"props":547,"children":548},{},[549],{"type":35,"value":550},"Start outsourced, build later.",{"type":35,"value":552}," Use a market maker through launch and the first unlock cycles, then reassess once the token has stable volume and the team has trading talent.",{"type":30,"tag":61,"props":554,"children":555},{},[556,561],{"type":30,"tag":65,"props":557,"children":558},{},[559],{"type":35,"value":560},"Two providers.",{"type":35,"value":562}," Some projects split venues between two firms to compare performance and avoid single-provider dependence. This needs clear venue allocation to avoid the firms trading against each other.",{"type":30,"tag":38,"props":564,"children":566},{"id":565},"decision-framework-which-should-you-pick",[567],{"type":35,"value":568},"Decision Framework: Which Should You Pick?",{"type":30,"tag":31,"props":570,"children":571},{},[572],{"type":35,"value":573},"Work through these questions in order. If you answer \"no\" to any of the first three, hire.",{"type":30,"tag":575,"props":576,"children":577},"ol",{},[578,588,596,604,614,624,634],{"type":30,"tag":61,"props":579,"children":580},{},[581,586],{"type":30,"tag":65,"props":582,"children":583},{},[584],{"type":35,"value":585},"Do you already employ people who have run a trading desk?",{"type":35,"value":587}," Not traders in general, but people who have managed inventory risk and exchange connectivity in production.",{"type":30,"tag":61,"props":589,"children":590},{},[591],{"type":30,"tag":65,"props":592,"children":593},{},[594],{"type":35,"value":595},"Can you fund full inventory on every venue you need to cover, and absorb trading losses while you learn?",{"type":30,"tag":61,"props":597,"children":598},{},[599],{"type":30,"tag":65,"props":600,"children":601},{},[602],{"type":35,"value":603},"Can you staff monitoring around the clock, including weekends and exchange incidents?",{"type":30,"tag":61,"props":605,"children":606},{},[607,612],{"type":30,"tag":65,"props":608,"children":609},{},[610],{"type":35,"value":611},"How many venues do you need?",{"type":35,"value":613}," One DEX pool is manageable in-house. Several centralized exchanges with cross-venue arbitrage is a different problem.",{"type":30,"tag":61,"props":615,"children":616},{},[617,622],{"type":30,"tag":65,"props":618,"children":619},{},[620],{"type":35,"value":621},"How close is your launch?",{"type":35,"value":623}," If listing is weeks away, building a desk is not realistic. Launch with a provider.",{"type":30,"tag":61,"props":625,"children":626},{},[627,632],{"type":30,"tag":65,"props":628,"children":629},{},[630],{"type":35,"value":631},"What do your exchanges expect?",{"type":35,"value":633}," Some exchanges ask for a named market maker as part of the listing process.",{"type":30,"tag":61,"props":635,"children":636},{},[637,642],{"type":30,"tag":65,"props":638,"children":639},{},[640],{"type":35,"value":641},"How sensitive are you to the regulatory view of a project trading its own token?",{"type":35,"value":643}," Get legal advice either way; the answer influences structure, not just cost.",{"type":30,"tag":45,"props":645,"children":647},{"id":646},"quick-verdicts",[648],{"type":35,"value":649},"Quick verdicts",{"type":30,"tag":170,"props":651,"children":652},{},[653,669],{"type":30,"tag":174,"props":654,"children":655},{},[656],{"type":30,"tag":178,"props":657,"children":658},{},[659,664],{"type":30,"tag":182,"props":660,"children":661},{},[662],{"type":35,"value":663},"Your situation",{"type":30,"tag":182,"props":665,"children":666},{},[667],{"type":35,"value":668},"Likely best fit",{"type":30,"tag":198,"props":670,"children":671},{},[672,685,698,711,724],{"type":30,"tag":178,"props":673,"children":674},{},[675,680],{"type":30,"tag":205,"props":676,"children":677},{},[678],{"type":35,"value":679},"Pre-launch, first CEX listings, no trading team",{"type":30,"tag":205,"props":681,"children":682},{},[683],{"type":35,"value":684},"Hire a market maker",{"type":30,"tag":178,"props":686,"children":687},{},[688,693],{"type":30,"tag":205,"props":689,"children":690},{},[691],{"type":35,"value":692},"Single DEX pool, small treasury, simple token",{"type":30,"tag":205,"props":694,"children":695},{},[696],{"type":35,"value":697},"In-house pool management can work",{"type":30,"tag":178,"props":699,"children":700},{},[701,706],{"type":30,"tag":205,"props":702,"children":703},{},[704],{"type":35,"value":705},"Several CEXs plus DEX, launch in under three months",{"type":30,"tag":205,"props":707,"children":708},{},[709],{"type":35,"value":710},"Hire, possibly with in-house DEX management",{"type":30,"tag":178,"props":712,"children":713},{},[714,719],{"type":30,"tag":205,"props":715,"children":716},{},[717],{"type":35,"value":718},"Mature token, stable volume, experienced in-house traders",{"type":30,"tag":205,"props":720,"children":721},{},[722],{"type":35,"value":723},"In-house or hybrid becomes viable",{"type":30,"tag":178,"props":725,"children":726},{},[727,732],{"type":30,"tag":205,"props":728,"children":729},{},[730],{"type":35,"value":731},"Unhappy with a current provider",{"type":30,"tag":205,"props":733,"children":734},{},[735],{"type":35,"value":736},"Renegotiate KPIs and reporting, or switch providers before going in-house",{"type":30,"tag":38,"props":738,"children":740},{"id":739},"checklist-before-you-decide",[741],{"type":35,"value":742},"Checklist Before You Decide",{"type":30,"tag":57,"props":744,"children":747},{"className":745},[746],"contains-task-list",[748,761,770,779,788,797,806],{"type":30,"tag":61,"props":749,"children":752},{"className":750},[751],"task-list-item",[753,759],{"type":30,"tag":754,"props":755,"children":758},"input",{"disabled":756,"type":757},true,"checkbox",[],{"type":35,"value":760}," Total cost of in-house estimated, including salaries, infrastructure and expected trading losses",{"type":30,"tag":61,"props":762,"children":764},{"className":763},[751],[765,768],{"type":30,"tag":754,"props":766,"children":767},{"disabled":756,"type":757},[],{"type":35,"value":769}," Venue list finalized, with depth and spread targets per venue",{"type":30,"tag":61,"props":771,"children":773},{"className":772},[751],[774,777],{"type":30,"tag":754,"props":775,"children":776},{"disabled":756,"type":757},[],{"type":35,"value":778}," Inventory available for each venue, in both token and quote asset",{"type":30,"tag":61,"props":780,"children":782},{"className":781},[751],[783,786],{"type":30,"tag":754,"props":784,"children":785},{"disabled":756,"type":757},[],{"type":35,"value":787}," Monitoring and incident ownership assigned around the clock",{"type":30,"tag":61,"props":789,"children":791},{"className":790},[751],[792,795],{"type":30,"tag":754,"props":793,"children":794},{"disabled":756,"type":757},[],{"type":35,"value":796}," Legal view obtained on the project trading its own token",{"type":30,"tag":61,"props":798,"children":800},{"className":799},[751],[801,804],{"type":30,"tag":754,"props":802,"children":803},{"disabled":756,"type":757},[],{"type":35,"value":805}," If hiring: at least two proposals compared on KPIs, reporting and token return terms",{"type":30,"tag":61,"props":807,"children":809},{"className":808},[751],[810,813],{"type":30,"tag":754,"props":811,"children":812},{"disabled":756,"type":757},[],{"type":35,"value":814}," Exit plan defined for either path",{"type":30,"tag":38,"props":816,"children":818},{"id":817},"the-bottom-line",[819],{"type":35,"value":820},"The Bottom Line",{"type":30,"tag":31,"props":822,"children":823},{},[824],{"type":35,"value":825},"In-house market making is a business in its own right, and most token teams are building a different business. Hiring a specialist usually gets you better liquidity sooner, at a cost that is easier to predict, as long as the contract aligns incentives and gives you the data to check the work. In-house becomes realistic later, when volume is stable and you have people who have done it before. Fibonacci Capital works with token teams on both the hired and hybrid models, and the first conversation is usually about which venues and KPIs actually matter for your token.",{"type":30,"tag":31,"props":827,"children":828},{},[829,831,837],{"type":35,"value":830},"If you want to compare the options for your own launch, ",{"type":30,"tag":155,"props":832,"children":834},{"href":833},"/",[835],{"type":35,"value":836},"get in touch with Fibonacci Capital",{"type":35,"value":477},{"title":7,"searchDepth":839,"depth":839,"links":840},2,[841,846,847,852,853,854,857,858],{"id":40,"depth":839,"text":43,"children":842},[843,845],{"id":47,"depth":844,"text":50},3,{"id":114,"depth":844,"text":117},{"id":165,"depth":839,"text":168},{"id":389,"depth":839,"text":392,"children":848},[849,850,851],{"id":395,"depth":844,"text":398},{"id":406,"depth":844,"text":409},{"id":417,"depth":844,"text":420},{"id":428,"depth":839,"text":431},{"id":503,"depth":839,"text":506},{"id":565,"depth":839,"text":568,"children":855},[856],{"id":646,"depth":844,"text":649},{"id":739,"depth":839,"text":742},{"id":817,"depth":839,"text":820},"markdown","content:blog:in-house-market-making-vs-hiring-a-market-maker.md","content","blog/in-house-market-making-vs-hiring-a-market-maker.md","blog/in-house-market-making-vs-hiring-a-market-maker","md",[866,1355,1929],{"_path":867,"_dir":5,"_draft":6,"_partial":6,"_locale":7,"title":868,"description":869,"date":870,"author":11,"category":12,"tags":871,"keywords":875,"image":881,"readTime":882,"body":883,"_type":859,"_id":1352,"_source":861,"_file":1353,"_stem":1354,"_extension":864},"/blog/market-maker-onboarding-mistakes-token-projects","Market Maker Onboarding: 8 Mistakes Token Projects Make in the First 30 Days","Market maker onboarding mistakes token projects make in the first 30 days, from wallets and API keys to KPIs and reporting, with the fix for each one.","2026-10-20",[14,872,873,17,874],"onboarding","market maker","kpis",[876,877,878,879,880],"market maker onboarding","onboarding a crypto market maker","market making mistakes","market maker kpis","market maker api keys setup","/assets/images/blog/market-maker-onboarding-mistakes-token-projects.jpg","8 min read",{"type":27,"children":884,"toc":1338},[885,890,908,914,919,935,941,946,963,969,974,991,997,1002,1018,1024,1029,1038,1044,1049,1074,1080,1085,1101,1107,1112,1121,1127,1132,1137,1143,1230,1236,1321,1327],{"type":30,"tag":31,"props":886,"children":887},{},[888],{"type":35,"value":889},"The first 30 days with a market maker decide whether the relationship runs smoothly or turns into a dispute. The most common market maker onboarding mistakes are not about choosing the wrong firm; they are operational: sending tokens before the terms are final, mishandling API keys and wallets, leaving KPIs vague, and failing to agree a reporting routine. Each one is cheap to fix before launch and expensive to fix after. This article lists eight mistakes and the fix for each, so your team enters the engagement with a clear setup.",{"type":30,"tag":31,"props":891,"children":892},{},[893,895,901,903,907],{"type":35,"value":894},"It assumes you have already selected a provider. If not, start with ",{"type":30,"tag":155,"props":896,"children":898},{"href":897},"/blog/how-to-choose-crypto-liquidity-provider",[899],{"type":35,"value":900},"how to choose a crypto liquidity provider",{"type":35,"value":902}," and the ",{"type":30,"tag":155,"props":904,"children":905},{"href":495},[906],{"type":35,"value":498},{"type":35,"value":477},{"type":30,"tag":38,"props":909,"children":911},{"id":910},"mistake-1-sending-tokens-before-the-agreement-is-final",[912],{"type":35,"value":913},"Mistake 1: Sending Tokens Before the Agreement Is Final",{"type":30,"tag":31,"props":915,"children":916},{},[917],{"type":35,"value":918},"Teams under launch pressure sometimes transfer inventory while the contract is still being negotiated. Once tokens sit in the provider's wallet, your negotiating leverage on the open terms drops sharply.",{"type":30,"tag":31,"props":920,"children":921},{},[922,927,929,934],{"type":30,"tag":65,"props":923,"children":924},{},[925],{"type":35,"value":926},"Fix:",{"type":35,"value":928}," treat the signed agreement, including loan terms, return conditions and option strikes if used, as the gate for any transfer. Agree the wallet addresses in writing, and send a small test transaction first. The models themselves are explained in ",{"type":30,"tag":155,"props":930,"children":931},{"href":157},[932],{"type":35,"value":933},"market making fee models",{"type":35,"value":477},{"type":30,"tag":38,"props":936,"children":938},{"id":937},"mistake-2-unclear-ownership-of-wallets-and-accounts",[939],{"type":35,"value":940},"Mistake 2: Unclear Ownership of Wallets and Accounts",{"type":30,"tag":31,"props":942,"children":943},{},[944],{"type":35,"value":945},"Who controls which wallet, which exchange account and which API key? Projects often discover during a dispute that nobody wrote this down. Some teams also lend tokens to an address they cannot later prove belongs to the provider.",{"type":30,"tag":31,"props":947,"children":948},{},[949,953,955,961],{"type":30,"tag":65,"props":950,"children":951},{},[952],{"type":35,"value":926},{"type":35,"value":954}," keep a one-page register listing every wallet, exchange sub-account and API key: owner, purpose, permissions and rotation date. Hold your treasury in a multisig and keep it separate from the lending wallets. ",{"type":30,"tag":155,"props":956,"children":958},{"href":957},"/blog/crypto-custody-solutions-for-token-teams",[959],{"type":35,"value":960},"Custody options for token teams",{"type":35,"value":962}," covers the setup.",{"type":30,"tag":38,"props":964,"children":966},{"id":965},"mistake-3-over-permissioned-api-keys",[967],{"type":35,"value":968},"Mistake 3: Over-Permissioned API Keys",{"type":30,"tag":31,"props":970,"children":971},{},[972],{"type":35,"value":973},"An API key with withdrawal rights is a liability. Market making needs trading access, not the ability to move funds off the exchange.",{"type":30,"tag":31,"props":975,"children":976},{},[977,981,983,989],{"type":30,"tag":65,"props":978,"children":979},{},[980],{"type":35,"value":926},{"type":35,"value":982}," whichever side creates the keys, make sure they are trade-only, with withdrawal disabled and IP whitelisting enabled where the exchange supports it. If your exchange accounts are yours and the provider trades through them, confirm who can change permissions. ",{"type":30,"tag":155,"props":984,"children":986},{"href":985},"/blog/exchange-api-integration-market-making",[987],{"type":35,"value":988},"Exchange API integration for market making",{"type":35,"value":990}," explains what the integration requires.",{"type":30,"tag":38,"props":992,"children":994},{"id":993},"mistake-4-vague-kpis",[995],{"type":35,"value":996},"Mistake 4: Vague KPIs",{"type":30,"tag":31,"props":998,"children":999},{},[1000],{"type":35,"value":1001},"\"Provide healthy liquidity\" is not a measurable obligation. Without numbers, you cannot tell whether the provider is meeting expectations, and neither side can argue from the same facts.",{"type":30,"tag":31,"props":1003,"children":1004},{},[1005,1009,1011,1016],{"type":30,"tag":65,"props":1006,"children":1007},{},[1008],{"type":35,"value":926},{"type":35,"value":1010}," define obligations in measurable terms: maximum spread, minimum depth within a stated price band, minimum uptime, and per-venue requirements. Specify how each is measured, over what window and what counts as an exception such as exchange downtime or extreme volatility. ",{"type":30,"tag":155,"props":1012,"children":1013},{"href":472},[1014],{"type":35,"value":1015},"How to evaluate market maker performance",{"type":35,"value":1017}," shows what to track and how to read it.",{"type":30,"tag":38,"props":1019,"children":1021},{"id":1020},"mistake-5-no-agreed-reporting-routine",[1022],{"type":35,"value":1023},"Mistake 5: No Agreed Reporting Routine",{"type":30,"tag":31,"props":1025,"children":1026},{},[1027],{"type":35,"value":1028},"Some projects get a dashboard login and nothing else. Others get a weekly PDF nobody opens. Both leave problems undiscovered until the quarter ends.",{"type":30,"tag":31,"props":1030,"children":1031},{},[1032,1036],{"type":30,"tag":65,"props":1033,"children":1034},{},[1035],{"type":35,"value":926},{"type":35,"value":1037}," set a fixed cadence: daily access to live metrics, a weekly summary covering spread, depth, volume and inventory, and a monthly review call. Agree the data source in advance, preferably something you can verify against exchange data and not only the provider's own numbers.",{"type":30,"tag":38,"props":1039,"children":1041},{"id":1040},"mistake-6-treating-volume-as-the-goal",[1042],{"type":35,"value":1043},"Mistake 6: Treating Volume as the Goal",{"type":30,"tag":31,"props":1045,"children":1046},{},[1047],{"type":35,"value":1048},"Founders often ask for volume targets because volume is visible and easy to quote. But volume is a weak measure of liquidity, and chasing it can push providers toward activity that looks like wash trading. Venues and data aggregators are alert to it, and the reputational damage is yours.",{"type":30,"tag":31,"props":1050,"children":1051},{},[1052,1056,1058,1064,1066,1072],{"type":30,"tag":65,"props":1053,"children":1054},{},[1055],{"type":35,"value":926},{"type":35,"value":1057}," anchor to spread and depth, not turnover. If you do set a volume expectation, tie it to organic activity and make clear that manufactured volume is out of bounds. Read ",{"type":30,"tag":155,"props":1059,"children":1061},{"href":1060},"/blog/trading-volume-vs-liquidity",[1062],{"type":35,"value":1063},"trading volume versus liquidity",{"type":35,"value":1065}," and ",{"type":30,"tag":155,"props":1067,"children":1069},{"href":1068},"/blog/what-is-wash-trading-crypto",[1070],{"type":35,"value":1071},"what wash trading is",{"type":35,"value":1073}," before you set targets.",{"type":30,"tag":38,"props":1075,"children":1077},{"id":1076},"mistake-7-ignoring-inventory-and-unlock-interaction",[1078],{"type":35,"value":1079},"Mistake 7: Ignoring Inventory and Unlock Interaction",{"type":30,"tag":31,"props":1081,"children":1082},{},[1083],{"type":35,"value":1084},"Your provider holds a mix of tokens and stable assets. If a large investor unlock lands in the same week as a thin order book, the provider's risk changes and quoting behaviour may change with it. Teams that never share their unlock calendar are surprised when spreads widen.",{"type":30,"tag":31,"props":1086,"children":1087},{},[1088,1092,1094,1100],{"type":30,"tag":65,"props":1089,"children":1090},{},[1091],{"type":35,"value":926},{"type":35,"value":1093}," share the vesting and unlock calendar, planned announcements and listings with the provider in advance, under confidentiality. Agree how inventory is topped up or reduced, and who approves changes. Allocation of launch liquidity should already be part of your supply plan, as discussed in our ",{"type":30,"tag":155,"props":1095,"children":1097},{"href":1096},"/blog/token-allocation-breakdown-team-investors-community",[1098],{"type":35,"value":1099},"token allocation breakdown",{"type":35,"value":477},{"type":30,"tag":38,"props":1102,"children":1104},{"id":1103},"mistake-8-no-plan-for-exit",[1105],{"type":35,"value":1106},"Mistake 8: No Plan for Exit",{"type":30,"tag":31,"props":1108,"children":1109},{},[1110],{"type":35,"value":1111},"Contracts end, relationships change, and exchanges delist. Few teams think through how the engagement unwinds until they need to.",{"type":30,"tag":31,"props":1113,"children":1114},{},[1115,1119],{"type":30,"tag":65,"props":1116,"children":1117},{},[1118],{"type":35,"value":926},{"type":35,"value":1120}," agree termination notice, a wind-down period for orders, return of loaned inventory by a stated date, treatment of any options and a clear process for handing over data. Settling this on day one costs a few lines in the contract. Settling it during a disagreement costs far more.",{"type":30,"tag":38,"props":1122,"children":1124},{"id":1123},"who-should-own-onboarding-internally",[1125],{"type":35,"value":1126},"Who Should Own Onboarding Internally",{"type":30,"tag":31,"props":1128,"children":1129},{},[1130],{"type":35,"value":1131},"Many onboarding problems trace back to a gap in ownership: the founder signs the contract, the engineer sets up keys, and finance tracks the inventory, yet nobody owns the whole picture. Name one person as the day-to-day contact for the provider, with a deputy for escalations. That person keeps the register from Mistake 2, reviews the weekly report, and logs every parameter change with the date and reason. When a question comes up three months later, such as why spreads widened in a particular week, the log gives you facts to work from, not recollections.",{"type":30,"tag":31,"props":1133,"children":1134},{},[1135],{"type":35,"value":1136},"It also helps to agree how changes are requested. A message in a chat group that says \"tighten the spread\" is not a change process. Decide whether parameter changes need written confirmation, who on your side can approve them, and how quickly the provider should acknowledge them. Small habits like this keep the relationship professional and make any later review of performance straightforward for both sides.",{"type":30,"tag":38,"props":1138,"children":1140},{"id":1139},"the-30-day-onboarding-timeline",[1141],{"type":35,"value":1142},"The 30-Day Onboarding Timeline",{"type":30,"tag":170,"props":1144,"children":1145},{},[1146,1162],{"type":30,"tag":174,"props":1147,"children":1148},{},[1149],{"type":30,"tag":178,"props":1150,"children":1151},{},[1152,1157],{"type":30,"tag":182,"props":1153,"children":1154},{},[1155],{"type":35,"value":1156},"Period",{"type":30,"tag":182,"props":1158,"children":1159},{},[1160],{"type":35,"value":1161},"What should happen",{"type":30,"tag":198,"props":1163,"children":1164},{},[1165,1178,1191,1204,1217],{"type":30,"tag":178,"props":1166,"children":1167},{},[1168,1173],{"type":30,"tag":205,"props":1169,"children":1170},{},[1171],{"type":35,"value":1172},"Before day 1",{"type":30,"tag":205,"props":1174,"children":1175},{},[1176],{"type":35,"value":1177},"Agreement signed; wallet and account register complete; test transfer done",{"type":30,"tag":178,"props":1179,"children":1180},{},[1181,1186],{"type":30,"tag":205,"props":1182,"children":1183},{},[1184],{"type":35,"value":1185},"Week 1",{"type":30,"tag":205,"props":1187,"children":1188},{},[1189],{"type":35,"value":1190},"API keys created trade-only; connectivity tested; KPI definitions confirmed; reporting access live",{"type":30,"tag":178,"props":1192,"children":1193},{},[1194,1199],{"type":30,"tag":205,"props":1195,"children":1196},{},[1197],{"type":35,"value":1198},"Week 2",{"type":30,"tag":205,"props":1200,"children":1201},{},[1202],{"type":35,"value":1203},"Inventory transferred in agreed tranches; quoting begins on the first venue; spread and depth checked against targets",{"type":30,"tag":178,"props":1205,"children":1206},{},[1207,1212],{"type":30,"tag":205,"props":1208,"children":1209},{},[1210],{"type":35,"value":1211},"Week 3",{"type":30,"tag":205,"props":1213,"children":1214},{},[1215],{"type":35,"value":1216},"Additional venues added; first weekly report reviewed; unlock calendar shared",{"type":30,"tag":178,"props":1218,"children":1219},{},[1220,1225],{"type":30,"tag":205,"props":1221,"children":1222},{},[1223],{"type":35,"value":1224},"Week 4",{"type":30,"tag":205,"props":1226,"children":1227},{},[1228],{"type":35,"value":1229},"Month-one review: KPI results, exceptions, adjustments to parameters; decide on scaling or changes",{"type":30,"tag":38,"props":1231,"children":1233},{"id":1232},"onboarding-checklist",[1234],{"type":35,"value":1235},"Onboarding Checklist",{"type":30,"tag":57,"props":1237,"children":1239},{"className":1238},[746],[1240,1249,1258,1267,1276,1285,1294,1303,1312],{"type":30,"tag":61,"props":1241,"children":1243},{"className":1242},[751],[1244,1247],{"type":30,"tag":754,"props":1245,"children":1246},{"disabled":756,"type":757},[],{"type":35,"value":1248}," Signed agreement before any token transfer",{"type":30,"tag":61,"props":1250,"children":1252},{"className":1251},[751],[1253,1256],{"type":30,"tag":754,"props":1254,"children":1255},{"disabled":756,"type":757},[],{"type":35,"value":1257}," Wallet, account and API key register written and shared internally",{"type":30,"tag":61,"props":1259,"children":1261},{"className":1260},[751],[1262,1265],{"type":30,"tag":754,"props":1263,"children":1264},{"disabled":756,"type":757},[],{"type":35,"value":1266}," Treasury in multisig; lending wallets separated",{"type":30,"tag":61,"props":1268,"children":1270},{"className":1269},[751],[1271,1274],{"type":30,"tag":754,"props":1272,"children":1273},{"disabled":756,"type":757},[],{"type":35,"value":1275}," API keys trade-only, withdrawals off, IP whitelist on",{"type":30,"tag":61,"props":1277,"children":1279},{"className":1278},[751],[1280,1283],{"type":30,"tag":754,"props":1281,"children":1282},{"disabled":756,"type":757},[],{"type":35,"value":1284}," KPIs defined with measurement method and exceptions",{"type":30,"tag":61,"props":1286,"children":1288},{"className":1287},[751],[1289,1292],{"type":30,"tag":754,"props":1290,"children":1291},{"disabled":756,"type":757},[],{"type":35,"value":1293}," Reporting cadence and data source agreed",{"type":30,"tag":61,"props":1295,"children":1297},{"className":1296},[751],[1298,1301],{"type":30,"tag":754,"props":1299,"children":1300},{"disabled":756,"type":757},[],{"type":35,"value":1302}," Unlock calendar and announcement schedule shared in confidence",{"type":30,"tag":61,"props":1304,"children":1306},{"className":1305},[751],[1307,1310],{"type":30,"tag":754,"props":1308,"children":1309},{"disabled":756,"type":757},[],{"type":35,"value":1311}," Inventory top-up and reduction process agreed",{"type":30,"tag":61,"props":1313,"children":1315},{"className":1314},[751],[1316,1319],{"type":30,"tag":754,"props":1317,"children":1318},{"disabled":756,"type":757},[],{"type":35,"value":1320}," Exit, return and data handover terms written down",{"type":30,"tag":38,"props":1322,"children":1324},{"id":1323},"good-onboarding-is-quiet",[1325],{"type":35,"value":1326},"Good Onboarding Is Quiet",{"type":30,"tag":31,"props":1328,"children":1329},{},[1330,1332,1337],{"type":35,"value":1331},"When onboarding is done well, nothing dramatic happens: quotes appear, spreads tighten, reports arrive on time, and both sides know what to expect. The goal is a working routine that survives a volatile week, not a perfect launch day. At Fibonacci Capital we run structured onboarding for every engagement so teams know the setup, the metrics and the escalation path from the start. If you are about to bring on a market maker or want to audit your current setup, ",{"type":30,"tag":155,"props":1333,"children":1334},{"href":833},[1335],{"type":35,"value":1336},"get in touch with our team",{"type":35,"value":477},{"title":7,"searchDepth":839,"depth":839,"links":1339},[1340,1341,1342,1343,1344,1345,1346,1347,1348,1349,1350,1351],{"id":910,"depth":839,"text":913},{"id":937,"depth":839,"text":940},{"id":965,"depth":839,"text":968},{"id":993,"depth":839,"text":996},{"id":1020,"depth":839,"text":1023},{"id":1040,"depth":839,"text":1043},{"id":1076,"depth":839,"text":1079},{"id":1103,"depth":839,"text":1106},{"id":1123,"depth":839,"text":1126},{"id":1139,"depth":839,"text":1142},{"id":1232,"depth":839,"text":1235},{"id":1323,"depth":839,"text":1326},"content:blog:market-maker-onboarding-mistakes-token-projects.md","blog/market-maker-onboarding-mistakes-token-projects.md","blog/market-maker-onboarding-mistakes-token-projects",{"_path":495,"_dir":5,"_draft":6,"_partial":6,"_locale":7,"title":1356,"description":1357,"date":1358,"author":11,"category":12,"tags":1359,"keywords":1363,"image":1367,"readTime":882,"body":1368,"_type":859,"_id":1926,"_source":861,"_file":1927,"_stem":1928,"_extension":864},"Market Maker Agreement Checklist: 12 Terms to Check Before You Sign","Market maker agreement checklist for token teams: the 12 clauses to review before signing, from quoting obligations and loan terms to exit rights and red flags.","2026-10-11",[1360,1361,17,1362],"market maker agreement","market making contract","due diligence",[1360,1364,498,1365,1366],"market making contract terms","token loan market maker","market maker contract red flags","/assets/images/blog/market-maker-agreement-checklist.jpg",{"type":27,"children":1369,"toc":1904},[1370,1375,1380,1386,1397,1403,1409,1414,1420,1425,1448,1467,1473,1484,1490,1495,1518,1523,1529,1534,1552,1557,1563,1573,1579,1589,1595,1600,1606,1611,1617,1622,1628,1640,1646,1651,1657,1792,1798,1828,1834,1839,1845,1888,1894],{"type":30,"tag":31,"props":1371,"children":1372},{},[1373],{"type":35,"value":1374},"A market maker agreement should define five things clearly: what the market maker must quote (spread, depth, uptime), what assets it receives from you and on what terms, how it is paid, how performance is measured, and how either side can leave. If any of those is vague, you are signing a relationship rather than a contract, and the vagueness usually favours the party with more leverage, which at launch is rarely the token team. This checklist walks through the twelve clauses worth reading line by line, what a reasonable version looks like, and the warning signs that should slow you down.",{"type":30,"tag":31,"props":1376,"children":1377},{},[1378],{"type":35,"value":1379},"This is a practical guide for founders, not legal advice. Have counsel in your jurisdiction review the final document.",{"type":30,"tag":38,"props":1381,"children":1383},{"id":1382},"why-the-agreement-matters-more-than-the-pitch",[1384],{"type":35,"value":1385},"Why the Agreement Matters More Than the Pitch",{"type":30,"tag":31,"props":1387,"children":1388},{},[1389,1391,1395],{"type":35,"value":1390},"Most teams choose a market maker on reputation and a sales call, then skim the contract. But the agreement is where incentives are set. It decides whether the firm is paid for tight, deep books or merely for being present, and whether your tokens can be returned, sold or lent onward. Our guide to ",{"type":30,"tag":155,"props":1392,"children":1393},{"href":157},[1394],{"type":35,"value":933},{"type":35,"value":1396}," explains the economics; this article covers the contract language that enforces them.",{"type":30,"tag":38,"props":1398,"children":1400},{"id":1399},"the-12-clause-checklist",[1401],{"type":35,"value":1402},"The 12-Clause Checklist",{"type":30,"tag":45,"props":1404,"children":1406},{"id":1405},"_1-scope-which-venues-and-pairs",[1407],{"type":35,"value":1408},"1. Scope: which venues and pairs",{"type":30,"tag":31,"props":1410,"children":1411},{},[1412],{"type":35,"value":1413},"List every exchange and trading pair covered. \"Major exchanges\" is not a scope. Specify whether DEX liquidity is included, and whether adding a venue later needs an amendment or is at your discretion.",{"type":30,"tag":45,"props":1415,"children":1417},{"id":1416},"_2-quoting-obligations",[1418],{"type":35,"value":1419},"2. Quoting obligations",{"type":30,"tag":31,"props":1421,"children":1422},{},[1423],{"type":35,"value":1424},"This is the core service. Look for measurable commitments:",{"type":30,"tag":57,"props":1426,"children":1427},{},[1428,1433,1438,1443],{"type":30,"tag":61,"props":1429,"children":1430},{},[1431],{"type":35,"value":1432},"Maximum bid-ask spread, expressed as a percentage of mid price",{"type":30,"tag":61,"props":1434,"children":1435},{},[1436],{"type":35,"value":1437},"Minimum depth within a defined distance from mid (for example, a stated amount within a set percentage on each side)",{"type":30,"tag":61,"props":1439,"children":1440},{},[1441],{"type":35,"value":1442},"Minimum uptime, as a share of the trading day",{"type":30,"tag":61,"props":1444,"children":1445},{},[1446],{"type":35,"value":1447},"Behaviour during volatility: are obligations relaxed, and under what exact conditions?",{"type":30,"tag":31,"props":1449,"children":1450},{},[1451,1453,1459,1460,1466],{"type":35,"value":1452},"If the contract says \"commercially reasonable efforts\" and nothing else, you cannot enforce anything. For how to read the underlying metrics, see ",{"type":30,"tag":155,"props":1454,"children":1456},{"href":1455},"/blog/what-is-a-bid-ask-spread",[1457],{"type":35,"value":1458},"what a bid-ask spread is",{"type":35,"value":1065},{"type":30,"tag":155,"props":1461,"children":1463},{"href":1462},"/blog/importance-of-order-book-depth",[1464],{"type":35,"value":1465},"why order book depth matters",{"type":35,"value":477},{"type":30,"tag":45,"props":1468,"children":1470},{"id":1469},"_3-compensation-model",[1471],{"type":35,"value":1472},"3. Compensation model",{"type":30,"tag":31,"props":1474,"children":1475},{},[1476,1478,1483],{"type":35,"value":1477},"State clearly whether you pay a monthly retainer, give a token loan with an option, share trading performance, or some blend. Each has different incentives, and none is automatically better. Check for any fee that triggers on events you do not control. The full comparison is in ",{"type":30,"tag":155,"props":1479,"children":1480},{"href":157},[1481],{"type":35,"value":1482},"market making fees and models",{"type":35,"value":477},{"type":30,"tag":45,"props":1485,"children":1487},{"id":1486},"_4-token-loan-terms-if-applicable",[1488],{"type":35,"value":1489},"4. Token loan terms (if applicable)",{"type":30,"tag":31,"props":1491,"children":1492},{},[1493],{"type":35,"value":1494},"If you lend tokens, the agreement should specify:",{"type":30,"tag":57,"props":1496,"children":1497},{},[1498,1503,1508,1513],{"type":30,"tag":61,"props":1499,"children":1500},{},[1501],{"type":35,"value":1502},"Exact quantity and the date of delivery",{"type":30,"tag":61,"props":1504,"children":1505},{},[1506],{"type":35,"value":1507},"Whether the loan is for a fixed term and when it must be returned",{"type":30,"tag":61,"props":1509,"children":1510},{},[1511],{"type":35,"value":1512},"Whether the market maker holds a call option, and the strike price and expiry",{"type":30,"tag":61,"props":1514,"children":1515},{},[1516],{"type":35,"value":1517},"What happens to unreturned tokens if the market maker defaults",{"type":30,"tag":31,"props":1519,"children":1520},{},[1521],{"type":35,"value":1522},"A loan with an option attached is not inherently bad, but you must understand the cost of the option in a rising market. Model the scenario in which the token performs well and the option is exercised in size.",{"type":30,"tag":45,"props":1524,"children":1526},{"id":1525},"_5-restrictions-on-use-of-your-tokens",[1527],{"type":35,"value":1528},"5. Restrictions on use of your tokens",{"type":30,"tag":31,"props":1530,"children":1531},{},[1532],{"type":35,"value":1533},"This is the clause teams most often skip. The contract should say your loaned tokens may only be used for market making on the agreed venues, and must not be:",{"type":30,"tag":57,"props":1535,"children":1536},{},[1537,1542,1547],{"type":30,"tag":61,"props":1538,"children":1539},{},[1540],{"type":35,"value":1541},"Sold into the open market outside normal quoting activity",{"type":30,"tag":61,"props":1543,"children":1544},{},[1545],{"type":35,"value":1546},"Rehypothecated, lent onward or pledged as collateral",{"type":30,"tag":61,"props":1548,"children":1549},{},[1550],{"type":35,"value":1551},"Moved to wallets or venues not listed in the agreement",{"type":30,"tag":31,"props":1553,"children":1554},{},[1555],{"type":35,"value":1556},"Ask for the right to see wallet addresses and balances. If transparency on inventory is refused, treat that as a major warning.",{"type":30,"tag":45,"props":1558,"children":1560},{"id":1559},"_6-reporting-and-data-access",[1561],{"type":35,"value":1562},"6. Reporting and data access",{"type":30,"tag":31,"props":1564,"children":1565},{},[1566,1568,1572],{"type":35,"value":1567},"You need regular, verifiable reporting: spreads, depth, volume, uptime and inventory by venue. Better still, ask for read-only API access or a dashboard you can check yourself. The metrics to demand are covered in ",{"type":30,"tag":155,"props":1569,"children":1570},{"href":472},[1571],{"type":35,"value":475},{"type":35,"value":477},{"type":30,"tag":45,"props":1574,"children":1576},{"id":1575},"_7-prohibited-conduct",[1577],{"type":35,"value":1578},"7. Prohibited conduct",{"type":30,"tag":31,"props":1580,"children":1581},{},[1582,1584,1588],{"type":35,"value":1583},"The agreement should expressly bar wash trading, spoofing, layering and trading on non-public information, and make the market maker responsible for complying with exchange rules. Exchanges can delist or penalise projects associated with manipulative volume, so this protects you directly. Background in ",{"type":30,"tag":155,"props":1585,"children":1586},{"href":1068},[1587],{"type":35,"value":1071},{"type":35,"value":477},{"type":30,"tag":45,"props":1590,"children":1592},{"id":1591},"_8-term-and-renewal",[1593],{"type":35,"value":1594},"8. Term and renewal",{"type":30,"tag":31,"props":1596,"children":1597},{},[1598],{"type":35,"value":1599},"Check the initial term, auto-renewal mechanics and notice periods. A long lock-in with a short notice window for renewal is a common trap: miss the date and you are bound for another cycle.",{"type":30,"tag":45,"props":1601,"children":1603},{"id":1602},"_9-termination-rights",[1604],{"type":35,"value":1605},"9. Termination rights",{"type":30,"tag":31,"props":1607,"children":1608},{},[1609],{"type":35,"value":1610},"You should be able to terminate for cause quickly, for example if quoting obligations are missed repeatedly, if reporting stops or if the firm breaches the usage restrictions. Also check for termination without cause, and what it costs. Whatever the reason, the contract should require return of loaned tokens within a short, fixed period.",{"type":30,"tag":45,"props":1612,"children":1614},{"id":1613},"_10-performance-remedies",[1615],{"type":35,"value":1616},"10. Performance remedies",{"type":30,"tag":31,"props":1618,"children":1619},{},[1620],{"type":35,"value":1621},"What happens when obligations are missed? Reasonable options include fee reductions, cure periods, extended terms without extra cost or termination rights. Without a remedy, the quoting obligations in clause 2 are decorative.",{"type":30,"tag":45,"props":1623,"children":1625},{"id":1624},"_11-confidentiality-and-non-disclosure-of-your-plans",[1626],{"type":35,"value":1627},"11. Confidentiality and non-disclosure of your plans",{"type":30,"tag":31,"props":1629,"children":1630},{},[1631,1633,1639],{"type":35,"value":1632},"The market maker will see your launch plans, unlock schedule and inventory. Confirm confidentiality covers that, and that the firm cannot trade your token for its own account on information received from you beyond what the agreement allows. Relatedly, review your own disclosure duties around unlock calendars; see ",{"type":30,"tag":155,"props":1634,"children":1636},{"href":1635},"/blog/token-unlocks-managing-sell-pressure",[1637],{"type":35,"value":1638},"token unlocks and sell pressure",{"type":35,"value":477},{"type":30,"tag":45,"props":1641,"children":1643},{"id":1642},"_12-governing-law-regulatory-status-and-liability",[1644],{"type":35,"value":1645},"12. Governing law, regulatory status and liability",{"type":30,"tag":31,"props":1647,"children":1648},{},[1649],{"type":35,"value":1650},"Check which law governs, where disputes are resolved, and whether the firm represents that it holds any licences it needs in its jurisdiction. Look at liability caps and indemnities: a cap far below the value of the tokens you lend is worth negotiating. Regulatory expectations vary and change; treat anything here as a prompt for questions to your lawyer, not conclusions.",{"type":30,"tag":38,"props":1652,"children":1654},{"id":1653},"quick-reference-table",[1655],{"type":35,"value":1656},"Quick Reference Table",{"type":30,"tag":170,"props":1658,"children":1659},{},[1660,1681],{"type":30,"tag":174,"props":1661,"children":1662},{},[1663],{"type":30,"tag":178,"props":1664,"children":1665},{},[1666,1671,1676],{"type":30,"tag":182,"props":1667,"children":1668},{},[1669],{"type":35,"value":1670},"Clause",{"type":30,"tag":182,"props":1672,"children":1673},{},[1674],{"type":35,"value":1675},"Strong version",{"type":30,"tag":182,"props":1677,"children":1678},{},[1679],{"type":35,"value":1680},"Red flag",{"type":30,"tag":198,"props":1682,"children":1683},{},[1684,1702,1720,1738,1756,1774],{"type":30,"tag":178,"props":1685,"children":1686},{},[1687,1692,1697],{"type":30,"tag":205,"props":1688,"children":1689},{},[1690],{"type":35,"value":1691},"Quoting",{"type":30,"tag":205,"props":1693,"children":1694},{},[1695],{"type":35,"value":1696},"Numeric spread, depth and uptime",{"type":30,"tag":205,"props":1698,"children":1699},{},[1700],{"type":35,"value":1701},"\"Best efforts\" only",{"type":30,"tag":178,"props":1703,"children":1704},{},[1705,1710,1715],{"type":30,"tag":205,"props":1706,"children":1707},{},[1708],{"type":35,"value":1709},"Token use",{"type":30,"tag":205,"props":1711,"children":1712},{},[1713],{"type":35,"value":1714},"Restricted to listed venues and wallets",{"type":30,"tag":205,"props":1716,"children":1717},{},[1718],{"type":35,"value":1719},"No limits on use",{"type":30,"tag":178,"props":1721,"children":1722},{},[1723,1728,1733],{"type":30,"tag":205,"props":1724,"children":1725},{},[1726],{"type":35,"value":1727},"Reporting",{"type":30,"tag":205,"props":1729,"children":1730},{},[1731],{"type":35,"value":1732},"Independent data access",{"type":30,"tag":205,"props":1734,"children":1735},{},[1736],{"type":35,"value":1737},"Monthly summary PDF only",{"type":30,"tag":178,"props":1739,"children":1740},{},[1741,1746,1751],{"type":30,"tag":205,"props":1742,"children":1743},{},[1744],{"type":35,"value":1745},"Termination",{"type":30,"tag":205,"props":1747,"children":1748},{},[1749],{"type":35,"value":1750},"For-cause exit, fast token return",{"type":30,"tag":205,"props":1752,"children":1753},{},[1754],{"type":35,"value":1755},"Long lock-in, slow or unspecified return",{"type":30,"tag":178,"props":1757,"children":1758},{},[1759,1764,1769],{"type":30,"tag":205,"props":1760,"children":1761},{},[1762],{"type":35,"value":1763},"Remedies",{"type":30,"tag":205,"props":1765,"children":1766},{},[1767],{"type":35,"value":1768},"Fee reduction or exit on breach",{"type":30,"tag":205,"props":1770,"children":1771},{},[1772],{"type":35,"value":1773},"No consequence for missing targets",{"type":30,"tag":178,"props":1775,"children":1776},{},[1777,1782,1787],{"type":30,"tag":205,"props":1778,"children":1779},{},[1780],{"type":35,"value":1781},"Conduct",{"type":30,"tag":205,"props":1783,"children":1784},{},[1785],{"type":35,"value":1786},"Explicit ban on manipulation",{"type":30,"tag":205,"props":1788,"children":1789},{},[1790],{"type":35,"value":1791},"Silence on wash trading",{"type":30,"tag":38,"props":1793,"children":1795},{"id":1794},"red-flags-beyond-the-contract",[1796],{"type":35,"value":1797},"Red Flags Beyond the Contract",{"type":30,"tag":57,"props":1799,"children":1800},{},[1801,1806,1811,1823],{"type":30,"tag":61,"props":1802,"children":1803},{},[1804],{"type":35,"value":1805},"Guaranteed price levels or guaranteed volume. No market maker can promise price, and \"guaranteed volume\" often means artificial volume.",{"type":30,"tag":61,"props":1807,"children":1808},{},[1809],{"type":35,"value":1810},"Reluctance to name the venues, wallets or team behind the account.",{"type":30,"tag":61,"props":1812,"children":1813},{},[1814,1816,1822],{"type":35,"value":1815},"Pressure to sign quickly or to loan a larger inventory than the books need. Sizing guidance is in ",{"type":30,"tag":155,"props":1817,"children":1819},{"href":1818},"/blog/how-much-liquidity-does-a-token-need-at-launch",[1820],{"type":35,"value":1821},"how much liquidity a token needs at launch",{"type":35,"value":477},{"type":30,"tag":61,"props":1824,"children":1825},{},[1826],{"type":35,"value":1827},"No sample report or reference you can speak to.",{"type":30,"tag":38,"props":1829,"children":1831},{"id":1830},"negotiation-priorities-for-a-small-team",[1832],{"type":35,"value":1833},"Negotiation Priorities for a Small Team",{"type":30,"tag":31,"props":1835,"children":1836},{},[1837],{"type":35,"value":1838},"You will not win every point, so rank them. A sensible order: restrictions on token use, return mechanics, measurable quoting obligations, reporting access, then fees. Money can be adjusted later; tokens that were sold or lent onward cannot be recalled.",{"type":30,"tag":38,"props":1840,"children":1842},{"id":1841},"pre-signing-checklist",[1843],{"type":35,"value":1844},"Pre-Signing Checklist",{"type":30,"tag":57,"props":1846,"children":1847},{},[1848,1853,1858,1863,1868,1873,1878,1883],{"type":30,"tag":61,"props":1849,"children":1850},{},[1851],{"type":35,"value":1852},"Scope lists every venue and pair",{"type":30,"tag":61,"props":1854,"children":1855},{},[1856],{"type":35,"value":1857},"Spread, depth and uptime are numeric",{"type":30,"tag":61,"props":1859,"children":1860},{},[1861],{"type":35,"value":1862},"Token usage limits and wallet visibility are written in",{"type":30,"tag":61,"props":1864,"children":1865},{},[1866],{"type":35,"value":1867},"Loan, option and return terms are modelled for a bull case",{"type":30,"tag":61,"props":1869,"children":1870},{},[1871],{"type":35,"value":1872},"Reporting and data access are specified",{"type":30,"tag":61,"props":1874,"children":1875},{},[1876],{"type":35,"value":1877},"Manipulation is explicitly prohibited",{"type":30,"tag":61,"props":1879,"children":1880},{},[1881],{"type":35,"value":1882},"Termination for cause is quick, and token return is time-bound",{"type":30,"tag":61,"props":1884,"children":1885},{},[1886],{"type":35,"value":1887},"Counsel has reviewed the final version",{"type":30,"tag":38,"props":1889,"children":1891},{"id":1890},"where-fibonacci-fits",[1892],{"type":35,"value":1893},"Where Fibonacci Fits",{"type":30,"tag":31,"props":1895,"children":1896},{},[1897,1899,1903],{"type":35,"value":1898},"Fibonacci Capital works with token teams on market making and launch liquidity, and we believe clear, measurable agreements are good for both sides. If you want a second pair of eyes on a term sheet or help scoping liquidity for your listing, ",{"type":30,"tag":155,"props":1900,"children":1901},{"href":833},[1902],{"type":35,"value":1336},{"type":35,"value":477},{"title":7,"searchDepth":839,"depth":839,"links":1905},[1906,1907,1921,1922,1923,1924,1925],{"id":1382,"depth":839,"text":1385},{"id":1399,"depth":839,"text":1402,"children":1908},[1909,1910,1911,1912,1913,1914,1915,1916,1917,1918,1919,1920],{"id":1405,"depth":844,"text":1408},{"id":1416,"depth":844,"text":1419},{"id":1469,"depth":844,"text":1472},{"id":1486,"depth":844,"text":1489},{"id":1525,"depth":844,"text":1528},{"id":1559,"depth":844,"text":1562},{"id":1575,"depth":844,"text":1578},{"id":1591,"depth":844,"text":1594},{"id":1602,"depth":844,"text":1605},{"id":1613,"depth":844,"text":1616},{"id":1624,"depth":844,"text":1627},{"id":1642,"depth":844,"text":1645},{"id":1653,"depth":839,"text":1656},{"id":1794,"depth":839,"text":1797},{"id":1830,"depth":839,"text":1833},{"id":1841,"depth":839,"text":1844},{"id":1890,"depth":839,"text":1893},"content:blog:market-maker-agreement-checklist.md","blog/market-maker-agreement-checklist.md","blog/market-maker-agreement-checklist",{"_path":472,"_dir":5,"_draft":6,"_partial":6,"_locale":7,"title":1930,"description":1931,"date":1932,"category":12,"readTime":25,"author":11,"tags":1933,"keywords":1938,"image":1939,"body":1940,"_type":859,"_id":2488,"_source":861,"_file":2489,"_stem":2490,"_extension":864},"How to Evaluate Market Maker Performance: KPIs Every Token Team Should Track","A practical framework for measuring crypto market maker performance: the KPIs that matter, what a good monthly report contains, and the red flags that signal a bad engagement.","2026-08-23",[1934,1935,15,1936,1937],"market maker performance","market making KPIs","vendor management","order book","how to evaluate market maker performance, market maker KPIs, crypto market making report, measuring liquidity provider performance, market maker red flags, Fibonacci Capital","/assets/images/blog/how-to-evaluate-market-maker-performance.jpg",{"type":27,"children":1941,"toc":2473},[1942,1948,1953,1958,1963,1969,1974,1980,1985,1996,2002,2007,2020,2026,2031,2036,2042,2047,2052,2058,2063,2073,2079,2084,2195,2200,2219,2225,2230,2268,2286,2291,2297,2302,2375,2380,2386,2391,2434,2446,2452,2457,2462],{"type":30,"tag":38,"props":1943,"children":1945},{"id":1944},"the-question-almost-no-token-team-can-answer",[1946],{"type":35,"value":1947},"The Question Almost No Token Team Can Answer",{"type":30,"tag":31,"props":1949,"children":1950},{},[1951],{"type":35,"value":1952},"Ask a founder six months into a market making engagement whether their market maker is doing a good job, and you will usually get an answer about price. That is the wrong instrument. Price is driven by demand, news, unlocks, the wider market and a dozen things no market maker controls. Judging a market maker on price is like judging a road maintenance crew on how many cars use the road.",{"type":30,"tag":31,"props":1954,"children":1955},{},[1956],{"type":35,"value":1957},"Evaluating market maker performance means measuring the things a market maker actually controls: how tight the spread is, how much size sits in the book, how often quotes are actually there, and how the book behaves when volatility arrives. Those are all observable, and most of them you can verify yourself from public exchange data rather than taking a report on trust.",{"type":30,"tag":31,"props":1959,"children":1960},{},[1961],{"type":35,"value":1962},"This guide sets out the KPIs worth tracking, how to define them in a contract so both sides mean the same thing, what a credible monthly report contains, and the warning signs that an engagement is going wrong.",{"type":30,"tag":38,"props":1964,"children":1966},{"id":1965},"the-five-kpis-that-actually-matter",[1967],{"type":35,"value":1968},"The Five KPIs That Actually Matter",{"type":30,"tag":31,"props":1970,"children":1971},{},[1972],{"type":35,"value":1973},"Nearly every meaningful obligation in a market making agreement reduces to five measurements. Everything else is commentary.",{"type":30,"tag":45,"props":1975,"children":1977},{"id":1976},"_1-bid-ask-spread",[1978],{"type":35,"value":1979},"1. Bid-ask spread",{"type":30,"tag":31,"props":1981,"children":1982},{},[1983],{"type":35,"value":1984},"The gap between the best buy and best sell price, usually expressed in basis points relative to mid price. This is the most direct measure of what a trade costs your holders, and the number an exchange listings team will look at first.",{"type":30,"tag":31,"props":1986,"children":1987},{},[1988,1990,1994],{"type":35,"value":1989},"Define it carefully. A spread commitment must specify the venue, the trading pair, and — critically — whether it is measured as an average, a median, or a percentage of time inside a threshold. \"Average spread under 50 bps\" can be satisfied by long stretches at 5 bps punctuated by gaps at 500 bps. \"Spread under 50 bps for 95% of measured intervals\" cannot. Always contract on the second form. Our explainer on ",{"type":30,"tag":155,"props":1991,"children":1992},{"href":1455},[1993],{"type":35,"value":1458},{"type":35,"value":1995}," covers the mechanics in more detail.",{"type":30,"tag":45,"props":1997,"children":1999},{"id":1998},"_2-order-book-depth",[2000],{"type":35,"value":2001},"2. Order book depth",{"type":30,"tag":31,"props":2003,"children":2004},{},[2005],{"type":35,"value":2006},"How much size rests within a given distance of mid price — for example, the total value of bids within 1% and 2% below mid, and the same on the ask side. Depth is what determines whether a real buyer can get filled without moving your chart.",{"type":30,"tag":31,"props":2008,"children":2009},{},[2010,2012,2018],{"type":35,"value":2011},"Ask for depth to be quoted at multiple bands, not one. A book with plenty of size at 2% but nothing at 0.5% will still produce painful ",{"type":30,"tag":155,"props":2013,"children":2015},{"href":2014},"/blog/what-is-slippage-in-crypto-trading",[2016],{"type":35,"value":2017},"slippage",{"type":35,"value":2019}," for ordinary trades. Also insist on two-sided depth commitments. A market maker that quotes generously on the ask and thinly on the bid is not stabilising anything.",{"type":30,"tag":45,"props":2021,"children":2023},{"id":2022},"_3-uptime",[2024],{"type":35,"value":2025},"3. Uptime",{"type":30,"tag":31,"props":2027,"children":2028},{},[2029],{"type":35,"value":2030},"The percentage of measured time during which quotes meeting the agreed spread and depth were actually live. This is the KPI that separates a real obligation from a decorative one, and the one most often left vague.",{"type":30,"tag":31,"props":2032,"children":2033},{},[2034],{"type":35,"value":2035},"Uptime should be measured continuously across the contract period, not sampled at convenient moments, and the agreement should state what happens during exchange outages, API failures and extreme volatility. Some carve-outs are legitimate — no market maker can quote through a venue that has halted trading. But a contract where the carve-outs swallow the obligation is worth nothing.",{"type":30,"tag":45,"props":2037,"children":2039},{"id":2038},"_4-behaviour-under-stress",[2040],{"type":35,"value":2041},"4. Behaviour under stress",{"type":30,"tag":31,"props":2043,"children":2044},{},[2045],{"type":35,"value":2046},"Liquidity is easy to provide on a quiet day. What you are really buying is a book that still functions during a sharp move, a large sell, an unlock, or a market-wide drawdown.",{"type":30,"tag":31,"props":2048,"children":2049},{},[2050],{"type":35,"value":2051},"This is harder to reduce to a single number, but it is measurable. Look at how spread and depth behaved during the three or four most volatile hours of the month, how long the book took to return to normal afterwards, and whether the market maker widened quotes or withdrew entirely. Ask for those episodes to be identified and explained in every report. A market maker that never mentions them is not looking at them.",{"type":30,"tag":45,"props":2053,"children":2055},{"id":2054},"_5-inventory-and-capital-usage",[2056],{"type":35,"value":2057},"5. Inventory and capital usage",{"type":30,"tag":31,"props":2059,"children":2060},{},[2061],{"type":35,"value":2062},"If you have supplied tokens or capital under a retainer or loan arrangement, you need to know where it is: how much is deployed on which venues, how the token and stablecoin balance has shifted over the period, and what the market maker's net position looks like.",{"type":30,"tag":31,"props":2064,"children":2065},{},[2066,2068,2072],{"type":35,"value":2067},"This matters most under a loan-and-option structure, where the market maker holds your tokens and has an economic interest in price. Position transparency is what turns that from a hidden risk into a managed one. The trade-offs between the different commercial structures are covered in our guide to ",{"type":30,"tag":155,"props":2069,"children":2070},{"href":157},[2071],{"type":35,"value":933},{"type":35,"value":477},{"type":30,"tag":38,"props":2074,"children":2076},{"id":2075},"turning-kpis-into-contract-language",[2077],{"type":35,"value":2078},"Turning KPIs Into Contract Language",{"type":30,"tag":31,"props":2080,"children":2081},{},[2082],{"type":35,"value":2083},"A KPI you cannot enforce is a hope. Before you sign, each of the five should be written with four elements attached.",{"type":30,"tag":170,"props":2085,"children":2086},{},[2087,2108],{"type":30,"tag":174,"props":2088,"children":2089},{},[2090],{"type":30,"tag":178,"props":2091,"children":2092},{},[2093,2098,2103],{"type":30,"tag":182,"props":2094,"children":2095},{},[2096],{"type":35,"value":2097},"Element",{"type":30,"tag":182,"props":2099,"children":2100},{},[2101],{"type":35,"value":2102},"What it means",{"type":30,"tag":182,"props":2104,"children":2105},{},[2106],{"type":35,"value":2107},"Example",{"type":30,"tag":198,"props":2109,"children":2110},{},[2111,2132,2153,2174],{"type":30,"tag":178,"props":2112,"children":2113},{},[2114,2122,2127],{"type":30,"tag":205,"props":2115,"children":2116},{},[2117],{"type":30,"tag":65,"props":2118,"children":2119},{},[2120],{"type":35,"value":2121},"Definition",{"type":30,"tag":205,"props":2123,"children":2124},{},[2125],{"type":35,"value":2126},"Exactly how the number is calculated",{"type":30,"tag":205,"props":2128,"children":2129},{},[2130],{"type":35,"value":2131},"Spread measured as (ask − bid) / mid, sampled every minute",{"type":30,"tag":178,"props":2133,"children":2134},{},[2135,2143,2148],{"type":30,"tag":205,"props":2136,"children":2137},{},[2138],{"type":30,"tag":65,"props":2139,"children":2140},{},[2141],{"type":35,"value":2142},"Threshold",{"type":30,"tag":205,"props":2144,"children":2145},{},[2146],{"type":35,"value":2147},"The level to be met",{"type":30,"tag":205,"props":2149,"children":2150},{},[2151],{"type":35,"value":2152},"Under 40 bps",{"type":30,"tag":178,"props":2154,"children":2155},{},[2156,2164,2169],{"type":30,"tag":205,"props":2157,"children":2158},{},[2159],{"type":30,"tag":65,"props":2160,"children":2161},{},[2162],{"type":35,"value":2163},"Coverage",{"type":30,"tag":205,"props":2165,"children":2166},{},[2167],{"type":35,"value":2168},"How often it must hold, and where",{"type":30,"tag":205,"props":2170,"children":2171},{},[2172],{"type":35,"value":2173},"95% of minutes, on the two primary CEX pairs",{"type":30,"tag":178,"props":2175,"children":2176},{},[2177,2185,2190],{"type":30,"tag":205,"props":2178,"children":2179},{},[2180],{"type":30,"tag":65,"props":2181,"children":2182},{},[2183],{"type":35,"value":2184},"Consequence",{"type":30,"tag":205,"props":2186,"children":2187},{},[2188],{"type":35,"value":2189},"What happens if it is missed",{"type":30,"tag":205,"props":2191,"children":2192},{},[2193],{"type":35,"value":2194},"Fee rebate, cure period, then termination right",{"type":30,"tag":31,"props":2196,"children":2197},{},[2198],{"type":35,"value":2199},"The consequence column is the one teams skip, and it is what converts a target into an obligation. It does not need to be punitive. A sensible structure is: a defined cure period after a missed month, a fee adjustment if the miss repeats, and a clean termination right with a short notice period if performance does not recover. What matters is that missing the target has a cost.",{"type":30,"tag":31,"props":2201,"children":2202},{},[2203,2205,2210,2212,2217],{"type":35,"value":2204},"Two more clauses worth insisting on. First, a ",{"type":30,"tag":65,"props":2206,"children":2207},{},[2208],{"type":35,"value":2209},"data access clause",{"type":35,"value":2211},": the right to receive raw quote and fill data, or at minimum to independently verify metrics from public exchange data. Second, an ",{"type":30,"tag":65,"props":2213,"children":2214},{},[2215],{"type":35,"value":2216},"exclusivity and venue clause",{"type":35,"value":2218},": which pairs and venues are covered, so that a market maker cannot report excellent performance on a minor pair while your main listing runs dry.",{"type":30,"tag":38,"props":2220,"children":2222},{"id":2221},"what-a-good-monthly-report-contains",[2223],{"type":35,"value":2224},"What a Good Monthly Report Contains",{"type":30,"tag":31,"props":2226,"children":2227},{},[2228],{"type":35,"value":2229},"A credible market making report is short, quantitative, and consistent month to month. It should contain:",{"type":30,"tag":57,"props":2231,"children":2232},{},[2233,2238,2243,2248,2253,2258,2263],{"type":30,"tag":61,"props":2234,"children":2235},{},[2236],{"type":35,"value":2237},"Spread, depth and uptime against contracted thresholds, per venue and pair",{"type":30,"tag":61,"props":2239,"children":2240},{},[2241],{"type":35,"value":2242},"Distribution rather than averages alone — percentiles, or time-in-threshold",{"type":30,"tag":61,"props":2244,"children":2245},{},[2246],{"type":35,"value":2247},"Volume traded, split by venue, and a note on how much was passive versus aggressive",{"type":30,"tag":61,"props":2249,"children":2250},{},[2251],{"type":35,"value":2252},"Inventory position at period start and end, with material changes explained",{"type":30,"tag":61,"props":2254,"children":2255},{},[2256],{"type":35,"value":2257},"Identification of the most volatile periods and how the book behaved in them",{"type":30,"tag":61,"props":2259,"children":2260},{},[2261],{"type":35,"value":2262},"Any missed thresholds, with cause and remedy",{"type":30,"tag":61,"props":2264,"children":2265},{},[2266],{"type":35,"value":2267},"Changes in venue conditions: fee tier changes, API issues, competing liquidity arriving or leaving",{"type":30,"tag":31,"props":2269,"children":2270},{},[2271,2273,2278,2280,2285],{"type":35,"value":2272},"Equally important is what a report should not contain. Be sceptical of reports built around total volume traded, of screenshots without underlying data, and of narrative explanations of price movement. Volume in particular is a weak and easily inflated metric — the relationship between volume and genuine market quality is covered in ",{"type":30,"tag":155,"props":2274,"children":2275},{"href":1060},[2276],{"type":35,"value":2277},"trading volume vs liquidity",{"type":35,"value":2279},", and the ways it gets manufactured in our piece on ",{"type":30,"tag":155,"props":2281,"children":2282},{"href":1068},[2283],{"type":35,"value":2284},"wash trading",{"type":35,"value":477},{"type":30,"tag":31,"props":2287,"children":2288},{},[2289],{"type":35,"value":2290},"You should also do your own verification. Pull the public order book for your pair at random intervals across a month and record spread and depth yourself. It takes a modest script and it changes the conversation entirely. A market maker that knows you are measuring independently behaves differently from one that does not.",{"type":30,"tag":38,"props":2292,"children":2294},{"id":2293},"red-flags",[2295],{"type":35,"value":2296},"Red Flags",{"type":30,"tag":31,"props":2298,"children":2299},{},[2300],{"type":35,"value":2301},"Patterns that should prompt a serious review:",{"type":30,"tag":57,"props":2303,"children":2304},{},[2305,2315,2325,2335,2345,2355,2365],{"type":30,"tag":61,"props":2306,"children":2307},{},[2308,2313],{"type":30,"tag":65,"props":2309,"children":2310},{},[2311],{"type":35,"value":2312},"Reports centred on volume and price rather than spread, depth and uptime.",{"type":35,"value":2314}," The metric selection tells you what they want you to look at.",{"type":30,"tag":61,"props":2316,"children":2317},{},[2318,2323],{"type":30,"tag":65,"props":2319,"children":2320},{},[2321],{"type":35,"value":2322},"Refusal to provide raw or granular data.",{"type":35,"value":2324}," Legitimate confidentiality covers strategy, not your own pair's quoting record.",{"type":30,"tag":61,"props":2326,"children":2327},{},[2328,2333],{"type":30,"tag":65,"props":2329,"children":2330},{},[2331],{"type":35,"value":2332},"Averages with no distribution.",{"type":35,"value":2334}," Almost always hiding gaps.",{"type":30,"tag":61,"props":2336,"children":2337},{},[2338,2343],{"type":30,"tag":65,"props":2339,"children":2340},{},[2341],{"type":35,"value":2342},"Deteriorating depth on the bid side over time.",{"type":35,"value":2344}," Often the first visible sign of a market maker reducing its own risk at your expense.",{"type":30,"tag":61,"props":2346,"children":2347},{},[2348,2353],{"type":30,"tag":65,"props":2349,"children":2350},{},[2351],{"type":35,"value":2352},"Absence from your book during high volatility, repeatedly.",{"type":35,"value":2354}," Occasional widening is normal and correct. Systematic disappearance when liquidity is most needed is a failure of the core service.",{"type":30,"tag":61,"props":2356,"children":2357},{},[2358,2363],{"type":30,"tag":65,"props":2359,"children":2360},{},[2361],{"type":35,"value":2362},"Vague answers about inventory.",{"type":35,"value":2364}," Under a loan structure, this is the risk that matters most.",{"type":30,"tag":61,"props":2366,"children":2367},{},[2368,2373],{"type":30,"tag":65,"props":2369,"children":2370},{},[2371],{"type":35,"value":2372},"No named point of contact or slow response during market events.",{"type":35,"value":2374}," When something goes wrong on a venue at 3am, response time is a real KPI.",{"type":30,"tag":31,"props":2376,"children":2377},{},[2378],{"type":35,"value":2379},"None of these is automatically proof of bad faith. Market conditions genuinely change, and a good counterparty will explain why a metric moved. The signal is the response to a direct question: a competent market maker answers with data.",{"type":30,"tag":38,"props":2381,"children":2383},{"id":2382},"a-practical-review-checklist",[2384],{"type":35,"value":2385},"A Practical Review Checklist",{"type":30,"tag":31,"props":2387,"children":2388},{},[2389],{"type":35,"value":2390},"Run this quarterly:",{"type":30,"tag":57,"props":2392,"children":2393},{},[2394,2399,2404,2409,2414,2419,2424,2429],{"type":30,"tag":61,"props":2395,"children":2396},{},[2397],{"type":35,"value":2398},"Contracted spread, depth and uptime thresholds pulled up and compared against reported figures",{"type":30,"tag":61,"props":2400,"children":2401},{},[2402],{"type":35,"value":2403},"At least one metric independently verified from public exchange data",{"type":30,"tag":61,"props":2405,"children":2406},{},[2407],{"type":35,"value":2408},"Depth checked at multiple bands and on both sides of the book",{"type":30,"tag":61,"props":2410,"children":2411},{},[2412],{"type":35,"value":2413},"The month's three most volatile episodes reviewed",{"type":30,"tag":61,"props":2415,"children":2416},{},[2417],{"type":35,"value":2418},"Inventory and capital position reconciled against your own records",{"type":30,"tag":61,"props":2420,"children":2421},{},[2422],{"type":35,"value":2423},"Venue coverage confirmed against where your volume actually is",{"type":30,"tag":61,"props":2425,"children":2426},{},[2427],{"type":35,"value":2428},"Any missed thresholds tracked against the cure and consequence terms",{"type":30,"tag":61,"props":2430,"children":2431},{},[2432],{"type":35,"value":2433},"Report format compared to previous quarters for consistency and for quietly dropped metrics",{"type":30,"tag":31,"props":2435,"children":2436},{},[2437,2439,2444],{"type":35,"value":2438},"If you are still selecting a counterparty rather than reviewing one, our guide to ",{"type":30,"tag":155,"props":2440,"children":2441},{"href":897},[2442],{"type":35,"value":2443},"choosing a crypto liquidity provider",{"type":35,"value":2445}," covers the diligence questions to ask before signing.",{"type":30,"tag":38,"props":2447,"children":2449},{"id":2448},"measurement-is-the-relationship",[2450],{"type":35,"value":2451},"Measurement Is the Relationship",{"type":30,"tag":31,"props":2453,"children":2454},{},[2455],{"type":35,"value":2456},"The best market making engagements are not the ones with the most aggressive headline commitments. They are the ones where both sides agree on what is being measured, the numbers arrive on time in a consistent format, and difficult months are explained rather than dressed up. Clear KPIs protect the market maker as well as the project, because they replace an unanswerable argument about price with a factual conversation about spread, depth and uptime.",{"type":30,"tag":31,"props":2458,"children":2459},{},[2460],{"type":35,"value":2461},"Fibonacci Capital works with token teams on precisely these terms — defined thresholds, transparent reporting, and liquidity built to hold up when the market is not calm.",{"type":30,"tag":31,"props":2463,"children":2464},{},[2465,2467,2472],{"type":35,"value":2466},"If you want a second opinion on your current market making arrangement, or help setting KPIs that are worth signing, ",{"type":30,"tag":155,"props":2468,"children":2469},{"href":833},[2470],{"type":35,"value":2471},"get in touch",{"type":35,"value":477},{"title":7,"searchDepth":839,"depth":839,"links":2474},[2475,2476,2483,2484,2485,2486,2487],{"id":1944,"depth":839,"text":1947},{"id":1965,"depth":839,"text":1968,"children":2477},[2478,2479,2480,2481,2482],{"id":1976,"depth":844,"text":1979},{"id":1998,"depth":844,"text":2001},{"id":2022,"depth":844,"text":2025},{"id":2038,"depth":844,"text":2041},{"id":2054,"depth":844,"text":2057},{"id":2075,"depth":839,"text":2078},{"id":2221,"depth":839,"text":2224},{"id":2293,"depth":839,"text":2296},{"id":2382,"depth":839,"text":2385},{"id":2448,"depth":839,"text":2451},"content:blog:how-to-evaluate-market-maker-performance.md","blog/how-to-evaluate-market-maker-performance.md","blog/how-to-evaluate-market-maker-performance",1792892706627]