The post Fine Line Between Liquidity & Exploitation appeared on BitcoinEthereumNews.com.

Market makers play a vital role in the crypto ecosystem, providing liquidity, ensuring efficient trading, and preventing excessive price volatility. Exchanges like Binance even incentivize market makers through dedicated programs to keep bid-ask spreads tight and order books deep, which benefits traders and projects alike. However, recent controversies surrounding market makers raise concerns about whether they are acting as stabilizing forces or exploiting their position for massive profits at the expense of retail investors. Web3port Controversy: A Market Maker’s Power Play? Market makers continuously place buy and sell orders, ensuring traders can execute transactions without significant price fluctuations. Without market makers, liquidity would be lower, spreads would be wider, and price slippage would be more severe, making trading riskier. Market makers guarding liquidity. Source: B2Broker Binance, the world’s largest exchange by trading volume metrics, runs a Market Maker Program. The project rewards participants for maintaining high liquidity and preventing projects from falling below exchange requirements, potentially avoiding delisting. “Market Makers will be given a composite score based on their performance across the various pairs,” Binance said in 2019. Meanwhile, recent investigations have unveiled a shocking case involving Web3port. The market maker is linked to multiple projects on Binance, including GoPlus Security (GPS), Myshell (SHELL), and Movement (MOVE). Crypto analyst Jason Chen alleged that Web3port amassed an astonishing $38 million in profits from just one project while retail investors suffered major losses. “..it is basically confirmed that the market makers of Goplus, Myshell, and Movement, which were recently investigated by Binance, are all the same Web3port.What is jaw-dropping is how a market maker with such behavior can have the strength to sign so many projects in succession. And what is even more terrifying is that it actually made 38 million US dollars on just one project,” Chen stated. According to Chen,…

---

Filed under: News - @ March 26, 2025 8:28 am