According to Cointelegraph, the right market makers can become boosters for crypto projects, helping them to go online to mainstream trading platforms, provide liquidity, and ensure that tokens are tradable. In the market maker field, a model that is both popular and often misunderstood is called the "loan option model". Under this model, the project lends to market makers, and market makers use these tokens to provide liquidity, stabilize prices, and assists the project in launching a crypto trading platform. But in reality, this model has become the "death judgment" of many new projects. In the behind-the-scenes operation, some market makers are using this token loan structure to make profits for themselves. These protocols are often packaged as "low risk, high returns", but in fact they will seriously hit the price of tokens, putting the fledgling crypto team in chaos and struggle. Ariel Givner, founder of Givner Law Law, said, "It works by: market makers borrow tokens from the project party at an agreed price, in exchange for them, they promise to help these tokens go online to large trading platforms. If they fail to fulfill their promise, they need to repay these tokens at a higher price within a year." But what often happens in reality is that market makers sell their borrowed tokens, triggering a preliminary price plunge. After the token price is smashed, they repurchase the tokens at a low price to make profits from it.
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