Market making for a low-volume token.

Why low volume does not mean a cheap mandate

A market maker earns, or loses, on the difference between the prices at which it buys and sells and the value of the inventory it is left holding. In a busy market that inventory turns over quickly. In a thin one it can sit for hours or days while the price moves.

Several features of a low-volume token raise the cost of quoting it:

• A weak reference price. Without a liquid market elsewhere, the quoting price has to be derived from a shallow pool or from the market maker’s own trades.
• Better-informed counterparties. For small-cap and newly launched tokens, a large share of incoming orders can come from participants who know more than the quoting desk, such as insiders, early holders or arbitrageurs. Each of those trades tends to leave the desk on the wrong side.
• Concentrated ownership and unlocks. A few large holders, or a scheduled unlock, can produce one-directional selling that ordinary two-sided flow does not absorb.
• Little room to hedge. If the token has no derivatives market and no correlated liquid asset, inventory risk cannot be offset cheaply.

The work per unit of volume is therefore higher. That shows up as a higher service fee, a wider spread, tighter inventory limits, or a combination of all three. A proposal that promises tight spreads and deep books on a thin token without explaining who carries that risk deserves careful reading.

The four budget lines, applied to a thin market

The categories are the same as in our general cost guide. What changes is where the uncertainty sits.

Keep a cash budget separate from a loss budget. The service fee is known in advance. The result on inventory is not, and in a thin market it can be the larger number.

Does your token need a market maker yet?

Not every low-volume token benefits from a market-making mandate. The right step depends on why the market is thin.

“Not yet” is a valid outcome of an assessment. Paying for continuous quoting on a market that has no trading reason mostly buys inventory risk.

Pricing inputs: the constraint issuers often miss

Every quote needs a reference price. For a large token, that comes from deep markets elsewhere. For a thin token, the options are limited: a single pool, an occasional trade on a small exchange, or a price inferred from a related asset.

A weak reference price makes quoting slow to react and easy to pick off. Before agreeing a mandate, ask the provider where its reference price will come from, how it detects a stale or manipulated price, and what it does when the reference stops updating. A clear answer to “we pause” is better than an unclear answer to “we keep quoting”.

This matters for request-for-quote (RFQ) routes in particular. On a system such as Jupiter RFQ, a market maker answers individual quote requests with a firm price. It can only do that responsibly when it has a price it trusts and inventory on both sides.

Start narrow: one pair, one venue, defined sizes

Spreading limited inventory across several markets usually leaves each of them thin. A narrow first scope is easier to measure and cheaper to correct.

• Choose the priority pair and venue where your users actually trade, before adding others.
• Define order sizes from data. Use your recent trades to agree the sizes at which quality will be measured.
• Model selling pressure. Map large holders and unlock dates alongside ordinary two-sided flow; our TGE checklist covers the supply schedule.
• Agree inventory limits and a pause rule. State what happens to quoting when limits are reached or the reference price fails.
• Agree the evidence. Quotes, fills, fees and inventory movements should be reconcilable from the first day.

What a market maker cannot do for a thin token

Market making can improve the prices available to people who already want to trade. It cannot create independent demand, hold a price floor or make a token attractive to buyers. Market makers provide liquidity, not demand.

Treat offers of guaranteed volume, a target price or a fixed daily turnover as a reason to stop and investigate. Volume generated without genuine counterparties is not liquidity, and it can expose the project to legal and exchange-listing risk. Our guide to what market making cannot promise sets out these limits in more detail.

How Astrum approaches a low-volume token

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. A new token is assessed on its own merits, starting with the pricing input, the venue and realistic trade sizes. Live operation on these routes does not mean every token on these chains can be supported.

The worked budget example shows how a narrowly scoped first step can be budgeted. An ongoing mandate is quoted after that scope is clear. For our own measured activity and its coverage limits, see the monthly record.

What to send for a useful assessment

Send the token and chain, the venues where it trades today, recent trade sizes or exported trade history, the unlock schedule, your intended inventory arrangement and the execution problem you want to solve. Say which details are confirmed and which are provisional.

When comparing providers, ask each one the same questions. Our twelve-point proposal checklist turns them into a comparison template.