A study reveals only one out of 150 crypto projects has disclosed market maker agreements, raising transparency concerns in the sector.
A recent study by Novora has highlighted a significant lack of transparency in the cryptocurrency sector, revealing that out of 150 major protocols assessed, only one has publicly shared its agreements with market makers.
The research analyzed various project types, including decentralized exchanges, lending platforms, and cross-chain bridges, with fully diluted valuations ranging from $40 million to $45 billion. It employed a binary transparency framework to evaluate disclosure practices based on open-source information.
Remarkably, less than 1% of the projects disclosed their terms with liquidity providers. The sole exception was the decentralized platform Meteora, which included its partnership details in its 2025 annual report.
“The most significant gap in the transparency of our industry,” stated Connor King, founder of Novora.
King noted that while traditional markets routinely disclose such agreements, the crypto industry lacks this crucial information, leaving participants in the dark. This ongoing issue with transparency raises concerns as poorly structured agreements can harbor hidden risks. For example, many projects offer tokens on credit to market makers to bolster trading activity, which can lead to price drops as borrowed coins are sold, negatively impacting startups’ liquidity.
Investor Communication Deficiencies
The study further identified a systemic issue regarding investor communication among crypto projects. Although 91% of the protocols generate traceable revenue, only 18% of them provide quarterly reports, and a mere 8% share materials with token holders.
Despite the growth of external analytical tools that cover over 85% of major platforms, this information rarely translates into formal reporting, according to specialists. Transparency levels varied significantly by project type, with perpetual futures protocols and decentralized exchanges exhibiting the highest levels of information disclosure, while L1 projects lagged behind despite their larger market capitalizations.
Ethereum emerged as the most transparent network according to the findings. This study comes in the wake of a scandal involving market maker CLS Global, which was implicated in fictitious trading related to the AI token NexFundAI, created by the FBI to combat fraud.
