Loan model vs retainer model
Two ways to work with a market maker. One gives away your tokens and hopes for the best. The other pays for a service and keeps full control.
Token loan model | Retainer model | |
|---|---|---|
| How it works | You give the market maker a large token allocation for free. They use it as inventory and return it (minus options) after 12-24 months. | You pay a monthly fee and provide the liquidity. The market maker manages it under your full visibility, with every position and trade on a real-time dashboard. |
| Your tokens | Given away for free. In someone else's hands for the duration of the contract, used at their discretion. | You provide them for market making, but you see exactly what's happening with them at all times. |
| Incentive alignment | The MM profits from the option and from managing inventory they got for free. Their upside isn't directly tied to your market quality. | The MM gets paid to deliver tight spreads and deep books. That's the entire job description. |
| Transparency | Usually a monthly report. What happens between reports is often a black box. | Real-time dashboard. Every position, trade, and rebalance visible as it happens. |
| Sell pressure risk | The MM may hedge by shorting your token, or exercise options into sell pressure. You might not know it's happening. | The MM has no incentive to sell or short. They're paid a retainer, not profiting from your token movements. |
| Contract flexibility | Typically 12-24 month lock. Hard to exit early without losing the loaned tokens or paying penalties. | Monthly engagement. Scale up, scale down, or stop when you need to. |
| Upfront cost | Looks free (no cash), but you're giving away tokens that could be worth significantly more over time. | Fixed monthly fee. Predictable, budgetable, no hidden costs. |
| Best for | Very early projects with no budget and no other options. | Any project with treasury, funding, or revenue that wants control and transparency. |
How it works
You give the market maker a large token allocation for free. They use it as inventory and return it (minus options) after 12-24 months.
You pay a monthly fee and provide the liquidity. The market maker manages it under your full visibility, with every position and trade on a real-time dashboard.
Your tokens
Given away for free. In someone else's hands for the duration of the contract, used at their discretion.
You provide them for market making, but you see exactly what's happening with them at all times.
Incentive alignment
The MM profits from the option and from managing inventory they got for free. Their upside isn't directly tied to your market quality.
The MM gets paid to deliver tight spreads and deep books. That's the entire job description.
Transparency
Usually a monthly report. What happens between reports is often a black box.
Real-time dashboard. Every position, trade, and rebalance visible as it happens.
Sell pressure risk
The MM may hedge by shorting your token, or exercise options into sell pressure. You might not know it's happening.
The MM has no incentive to sell or short. They're paid a retainer, not profiting from your token movements.
Contract flexibility
Typically 12-24 month lock. Hard to exit early without losing the loaned tokens or paying penalties.
Monthly engagement. Scale up, scale down, or stop when you need to.
Upfront cost
Looks free (no cash), but you're giving away tokens that could be worth significantly more over time.
Fixed monthly fee. Predictable, budgetable, no hidden costs.
Best for
Very early projects with no budget and no other options.
Any project with treasury, funding, or revenue that wants control and transparency.
Our take
We work exclusively on retainer. We think it's the only model where the market maker's success is fully tied to yours. No token loans, no options, no inventory games. You pay for a service, you provide the liquidity, and you see everything we do with it in real time.