Study finds crypto protocols fail to disclose market-maker relationships, raising transparency concerns
A new study discovered that almost no cryptocurrency protocols publicly disclose their agreements with market makers, the firms that help ensure coins can be bought and sold easily. Market makers are crucial intermediaries that provide liquidity, meaning they buy and sell crypto to prevent huge price swings. Transparency about these relationships matters because market makers can influence how coins trade and may have financial incentives that benefit them over regular investors. Traditional finance heavily regulates and requires disclosure of market-maker relationships. The lack of disclosure in crypto suggests the industry needs stronger standards to protect investor interests.
Why it matters
When you buy a cryptocurrency, you're often trading against a market maker without knowing who they are or what terms they negotiated. Better disclosure would help you understand who influences the markets you're investing in and whether those relationships are fair.
