Market-maker models, compared.

Retainer

The project pays a recurring service fee, often with a separate one-time setup fee. In return the market maker operates to agreed obligations: which pairs and venues, which hours, at what spread and depth, and with what reporting.

• What you pay: a known cash amount per period, plus setup and external costs.
• Inventory: still needed. A retainer pays for the service, not for the tokens and quote assets the desk trades with. Check who supplies them and on what return terms.
• Trading result: agree in writing who keeps trading gains and who bears trading losses on the inventory. A retainer does not remove those losses; it only decides who carries them.
• What to check: deliverables, measurable targets, termination rights and what happens when a target is missed.

The appeal of a retainer is legibility: the cash budget is known in advance and the provider is paid for the service rather than for the token’s price path.

Token loan with call options

The project lends tokens to the market maker for a fixed term. The market maker uses them as trading inventory and receives call options: the right, at the end of the term, to buy some or all of the loaned tokens at agreed strike prices instead of returning them.

In outline, at maturity:

• If the token trades above a strike, the market maker can exercise. It pays the strike price for those tokens and keeps them. The project receives cash, but less than the tokens are then worth on the market.
• If the token trades below the strikes, the options are not exercised. The market maker returns the loaned quantity of tokens.

Cash-free is not cost-free. The options have value from the day they are granted. The project gives up part of the token’s upside, and that is the real fee, even if no invoice is ever sent. Its size depends on the loan quantity, the strikes, the term and the token’s volatility.

Read the agreement as one package: repayment asset and quantity, maturity, strikes, collateral, whether the market maker may sell the loaned tokens outright, what reporting you receive on their use, and what happens on early termination. Different terms create different incentives, so judge the actual agreement rather than its name. Having it reviewed by an adviser who understands options is sensible.

Performance-linked fees

Some proposals tie the provider’s pay to a result, either alone or as a bonus on top of a retainer. The question is always: a share of what, measured how?

• The base: a share of execution revenue (spread captured on trades) is a different number from a share of portfolio profit, which also includes inventory gains and losses.
• Valuation: state how open inventory is valued at the end of each period and which price source is used.
• Costs: agree which fees, network costs and rebalancing costs are deducted before the share is calculated.
• Verification: decide who produces the calculation and what evidence backs it.

Performance terms can align incentives, but only if the definitions are precise. Vague definitions make offers impossible to compare and results impossible to check.

Who carries which risk?

The table compares the three structures in their plain form. Real agreements often mix them, so apply each row to the actual terms on the table.

No structure is free of conflicts. What matters is that each incentive is visible, written down and checked against the obligations the provider accepts.

How to compare one market maker’s price with another’s

Market-making terms are usually agreed bilaterally and are rarely published, so public price comparisons between firms are hard to verify. A more reliable route is to make the offers in front of you comparable:

1. Break each offer into the same parts: cash fees, the value of any options or token rights granted, inventory you must supply, and external costs.
2. Hold the scope constant: the same pairs, venues, order sizes, hours and measurement windows for every provider.
3. Ask for everything in writing: side agreements, token rights, conflicts of interest and how the provider’s own trading is separated from your mandate.
4. Price the exit: notice periods, asset return, open positions and handover of data and permissions.

An offer that looks cheaper on one line can be more expensive once the other lines are filled in. Our twelve-point proposal checklist and the comparison template help you record the answers side by side.

Questions to ask before you sign

• Which tokens, quote assets or rights does the project hand over, and on what terms do they come back?
• Are there options, warrants, profit shares or other economic rights anywhere in the agreement or its side letters?
• Who carries trading losses on the inventory, and how is that reported?
• Which obligations are measurable, over which hours and at which sizes?
• Who can pause trading, change limits or withdraw assets?
• What happens to fees, tokens and open positions if either side terminates early?

Treat promises of guaranteed prices, fixed daily volume or manufactured activity as a reason to stop and investigate, whatever the fee structure.

How Astrum structures its work

Astrum is a trading and market-making desk operating its own capital. Our current live execution runs on Jupiter RFQ on Solana and on 1inch Fusion, where we act as an approved resolver on Solana, Ethereum and Base.

For token issuers, work starts with a written assessment and, where suitable, a narrowly scoped pilot, each defined in writing before it begins. An ongoing mandate is quoted according to its scope: venues, integrations, obligations and reporting. Our worked example shows how such a staged budget is laid out. For our own measured activity and its coverage limits, see the monthly record.