By Max Moris, CEO and Аounder of Cicada - a Dubai-based Market Making company with 6 years of personal experience, 1,000+ projects, and 500+ exchange listings.
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Last year, a founder signed a contract for free market making services. Four months later, the project had lost six million dollars. The market maker had made six million dollars. And hadn't violated a single line of the agreement. Everything was in the contract. Nobody read it.
This is the story of the three contract models that exist in this industry, what they actually cost, and why "free" is the most expensive word in crypto market making.
Three MM Models - Different Rules
Every market making contract falls into one of three categories. Retainer: you pay a fixed monthly fee. Loan: you give the market maker your tokens. And "free": which is how loans get sold to founders who don't understand what they're signing.
Retainer: Clean and Honest
The retainer model is the simplest. The project pays a fixed monthly fee. The market maker operates on your exchange accounts via API keys, with no ability to deposit or withdraw funds. You keep full control of your money. All profit generated from volatility goes to you, not to the market maker. They receive only what's written in the invoice.
This is the only model in the industry where incentives are completely transparent. We get paid for the work. We do the work.
At Cicada, services start at $3,500 per month, ranging up to $8,000 depending on the number of exchanges. Pay several months upfront and you get a discount.
What that fee covers:
A professional trading team and 24/7 support.
Dozens of algorithms running simultaneously on your token, built on C++ infrastructure with fast updates for every exchange.
An online dashboard with full real-time statistics. Every trade, every order, every metric, visible at any moment.
Risk control and weekly reports.
There's also something I offer clients inside the retainer that's entirely voluntary and not written into the contract. For clients who want it, we open a separate account holding only the project's tokens.
Our job is to work that account so that by the end of month, the token balance is unchanged and there's an additional $USDT position on top. We don't touch your token holdings, but through volatility work, we generate a dollar-denominated gain.
If there's a positive result at month end, the client can choose to share part of it with us. If there's no result, no claims - we keep working the following month.
For most projects, especially at listing, retainer is the only real option. If your market cap is under $100 million, it's retainer. No exceptions. The loan model will explain why.
Loan: The Trojan Horse
The loan model looks attractive on paper. The project lends tokens to the market maker, sometimes with stablecoin added. The MM uses those tokens as liquidity in the order book. No monthly invoice. No payment schedule. The launch chart looks clean. Everyone seems happy.
Here's the math on what actually happens:
Take a hypothetical project. FDV of $50 million. Token price at TGE: $1.00. You lend the market maker 5% of the supply - 2.5 million tokens, worth $2.5 million.
Listing day comes with hype. Price rises to $3.00. The market maker sells your tokens, the ones you lent them - at an average of $3.00. They now hold $7.5 million in cash.
Three to six months pass. Unlocks start. The marketing budget runs dry. Hype fades. Price drops to $0.50.
The entire time, the market maker has been trading. Not sitting on cash - actively profiting from every move up and down. Each swing in price is potential revenue for them, not for you.
Then comes the final move. The market maker buys back those 2.5 million tokens at $0.50. Spends $1.25 million. Returns the tokens to your project per contract. Terms fulfilled. Signature valid.
Net profit for the market maker: $6.25 million on the price difference alone, plus everything earned on volatility across those months. What the project has: a collapsed chart, a damaged reputation, and the same 2.5 million tokens that are now worth a fraction of what they were.
And the market maker didn't break the contract. They did exactly what you agreed to. You handed them your tokens and said "trade." They traded. In their favor. Every day. On every move.
This is the most common reason founders come to us after leaving another market maker. Every one of them thought their situation was different.
Free: There's No Such Thing
When someone tells you their services are free, translate it as: "We'll make our money another way, and we won't be telling you how."
Free market makers don't exist. If no invoice is coming your way, that doesn't mean you're not paying. It means you're paying in tokens, in price control, in community trust, and eventually in the project itself.
When Loan Actually Works
The loan structure isn't inherently bad. It's a tool. The question is who's holding it and under what conditions. Loan works when your market cap is above $100 million. At that capitalization, no single loan can meaningfully manipulate the price - the math doesn't allow it.
It works for smaller exchanges you don't want to actively manage. Send a loan and let it run. It's required on certain exchanges. Coinbase is the most prominent example. Without a loan structure, you can't list there.
And for large projects, it creates something powerful: you can split the loan across multiple market makers who then compete with each other. Liquidity multiplies. Spreads tighten. Users trading your token benefit directly.
The question isn't "is loan good or bad." The question is where you are and what you're trying to accomplish.
Three Questions to Ask Before Signing:
What happens to my tokens if the market maker sells them and the price drops?
If the answer is "we'll buy back at market" - you already know how this ends.How quickly can I exit the contract if something goes wrong?
If the answer is "not for two years" - that's a red flag.Do our incentives actually align?
If the market maker can profit when your project is doing badly - something went wrong before the contract was even signed.
Good contracts survive these questions. Bad ones fall apart on the first one. Read the contract before you sign it, not after the chart collapses and the treasury is empty.
Your MM Should Win When You Win
Retainer is the right structure for most projects, especially at listing. You pay clearly and you sleep at night. Volatility profit is yours. Control is yours, the market maker receives only what's in the invoice.
Loan is a functional tool, but in this model, volatility profit goes to the market maker, not to you. That's fine at the right capitalization, for the right exchanges, when you're running competition between multiple providers.
One more thing worth understanding. Your market maker needs to make money too. This isn't charity. It's a business. A market maker that doesn't earn doesn't survive, doesn't invest in technology, doesn't keep a strong team. And ultimately, you lose.
So sometimes a loan is a good model. You solve your problems. The market maker earns. Both sides win.
The question isn't whether your market maker should make money. They should. The question is balance. If your market maker makes six million and you lose six million - that's extraction. If your market maker profits from the project growing alongside you - that's the relationship you want.
"Free" doesn't exist. If there's no invoice in the contract, there's something else in there. Read it. Find it. Run the numbers.
I'm Maxim Moris, Founder of Cicada Market Making. If you need help reviewing a contract before you sign - reach out. I personally review every incoming request together with the team.