Crypto Industry Transparency Gap Exposed in Novora Study

A new study by Novora has shed light on a critical issue in the crypto industry: the lack of transparency surrounding market-making arrangements. The research firm analyzed over 150 major protocols and found that only one, Meteora, publicly discloses its market-maker terms.

The study's findings are particularly concerning given that 91% of the examined protocols generate revenue on-chain. However, despite having access to this data, third-party analytics coverage exceeds 85% across major platforms. Yet, only 8% of protocols issue token holder reports and a mere 18% publish quarterly updates.

The absence of transparency in market-making arrangements has been linked to cases of price manipulation by market makers. In some instances, projects have suffered financial losses due to market makers dumping borrowed tokens, causing prices to plummet. The study's author notes that traditional markets typically require the disclosure of material agreements, making the crypto industry's secrecy all the more puzzling.