Some market makers profit from token lending, which may 'strangle' cryptocurrency projects

Odaily Planet Daily News: A market maker model called the "loan option model" allows projects to lend tokens to market makers, who then use these tokens to provide liquidity, stabilize prices, and assist projects in launching on cryptocurrency trading platforms. However, this model has become a "death sentence" for many new projects. Because in the behind the scenes operations, some market makers are using this controversial token loan structure for their own profit. These agreements are often packaged as "low-risk, high return," but in reality, they can seriously hit token prices, causing chaos and chaos for fledgling crypto teams. Ariel Givner, founder of Givner Law, said, "Its operation is that market makers borrow tokens from project parties at a certain agreed price, in exchange for which they promise to help these tokens go online on large trading platforms. If they fail to fulfill their commitment, they will need to repay these tokens at a higher price within a year." However, in reality, it often happens that market makers sell the borrowed tokens, triggering an initial price crash. After the token price is smashed, they repurchase the token at a low price to make profits. （Cointelegraph）