CoinDesk expos\u00e9<\/a> in late April showed how some Movement Labs executives colluded with their own market maker to dump $38 million worth of MOVE in the open market.<\/p>\nNow, some firms are questioning whether they\u2019ve been too casual in trusting counterparties. How do you hedge a position when token unlock schedules are opaque? What happens when handshake deals quietly override DAO proposals?<\/p>\n
\u201cOur approach now includes more extensive preliminary discussions and educational sessions with project teams to ensure they thoroughly understand market-making mechanics,\u201d Hong Kong-based Metalpha\u2019s market-making division told CoinDesk in an interview. <\/p>\n
\u201cOur deal structures have evolved to emphasize long-term strategic alignment over short-term performance metrics, incorporating specific safeguards against unethical behavior such as excessive token dumping and artificial trading volume,” it said.<\/p>\n
Behind the scenes, conversations are intensifying. Deal terms are being scrutinized more carefully. Some liquidity desks are reevaluating how they underwrite token risk. <\/p>\n
Others are demanding stricter transparency \u2014 or walking away from murky projects altogether.<\/p>\n
\u201cProjects no longer accept prestigious reputations at face value, having witnessed how even established players can exploit shadow allocations or engage in detrimental token selling practices,\u201d Metalpha\u2019s head of Web3 ecosystem Max Sun noted. \u201cThe era of presumptive trust has concluded,\u201d he claimed.<\/p>\n
Beneath the polished surface of token launch announcements and market-making agreements lies another layer of crypto finance \u2014 the secondary OTC market, where locked tokens quietly change hands well before vesting cliffs hit the public eye. <\/p>\n
These under-the-table deals, often struck between early backers, funds, and syndicates, are now distorting supply dynamics and skewing price discovery, some traders say. And for market makers tasked with providing orderly liquidity, they\u2019re becoming an increasingly opaque and dangerous variable.<\/p>\n
\u201cThe secondary OTC market has changed the dynamics of the industry,\u201d said Min Jung, analyst at Presto Research, which runs a market-making unit. \u201cIf you look at tokens with suspicious price action \u2014 like $LAYER, $OM, $MOVE, and others \u2014 they\u2019re often the ones most actively traded on the secondary OTC market.\u201d<\/p>\n
\u201cThe entire supply and vesting schedule has become distorted because of these off-market deals, and for liquid funds, the real challenge is figuring out when supply is actually unlocking,\u201d Jung added.<\/p>\n
In a market where price is fiction and supply is negotiated in back rooms, the real risk isn\u2019t volatility for traders \u2014 it is believing the float is what the whitepaper and founders say it is.<\/p>\n
Read more: Movement Labs Secretly Promised Advisers Millions in Tokens, Leaked Documents Show<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"Two of the year\u2019s most chaotic token blowups \u2014 Movement Labs\u2019 MOVE scandal and the collapse of Mantra\u2019s…\n","protected":false},"author":2,"featured_media":108662,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3091],"tags":[51,49552,49553,49551,2441,14366,16,15],"class_list":{"0":"post-108661","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-mantra","10":"tag-market-analysis","11":"tag-market-maker","12":"tag-markets","13":"tag-move","14":"tag-uk","15":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114522453677957394","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/108661","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=108661"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/108661\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/108662"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=108661"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=108661"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=108661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}