Crypto Protocols' Lack of Transparency Hinders Investment Decisions

Cryptocurrency protocols are generating significant revenue, but a lack of transparency is hindering investment decisions. Novora's recent study reveals that 91% of over 150 reviewed projects have traceable revenue, yet few provide clear financial information to investors.

The most concerning issue lies in market-making arrangements, with fewer than 1% of protocols disclosing details about their agreements with market makers. These arrangements can have a significant impact on token liquidity and price formation.

Only one protocol, Meteora, has publicly disclosed its market-making deals, highlighting the industry's critical blind spot. The study also found that most protocols rely on fragmented channels for financial information, making it difficult for investors to form a clear view.