Crypto Market-Making Agreements: What Token Projects Should Negotiate Before Signing

Law and Ledger is a news segment focusing on crypto legal news, brought to you by Kelman Law – A law firm focused on digital asset commerce. A token project is preparing for an exchange listing. A market maker offers to support liquidity in return for a token loan and an option to purchase part of the allocation. The proposal emphasizes tighter spreads, deeper order books, and a smooth launch. Several months later, the project wants its tokens back. The market maker points to an option exercise provision, an extended repayment period, and authority to hold inventory on third-party exchanges. The founders discover that their understanding of “providing liquidity” never made it into the agreement.