- Jakob Brezigar
- Updated: August 20, 2025
- Reading time: 6 min
Retainer Model – Definition and Role in Crypto Market-Making
The retainer model in crypto market making—also known as Market Making as a Service (MMaaS)—gives token issuers control, transparency, and predictable costs. Issuers fund both token and quote sides, pay a fixed monthly fee, and retain capital ownership, avoiding token dumping and misaligned incentives.
While it requires more upfront capital and exposes issuers to downside risk, clear KPIs like uptime, spreads, and reporting ensure accountability. In 2025–2026, hybrid structures, standardized benchmarks, and regulatory clarity are set to strengthen retainer adoption.
Orcabay, an experienced market maker active on over 30 exchanges — including Binance, Bitstamp, and Coinbase — specializes in delivering tailored liquidity solutions. Contact us to learn more!
What Is the Retainer Model?
The retainer model—also known as Market Making as a Service (MMaaS)—is a market-making arrangement where token issuers provide both token and quote-side liquidity (e.g. stablecoins) and pay a fixed monthly fee to a market-making firm for trading infrastructure and execution. At contract end, the full capital is returned. It’s usually more suitable for new projects.
- Definition: Token issuer defines strategy and liquidity scope, retains capital risk and ownership.
- Contrast: Loan/call model transfers inventory and risk to MM; in the retainer model, issuers retain them.
Why Would Token Issuers Choose the Retainer Model?
What Are the Control and Transparency Benefits?
- Issuers retain full visibility and control over capital, strategies, and execution — no “black-box” model.
- They can set and adjust strategies, monitor performance and capital usage in real time.
What Are the Budgeting and Risk-Mitigation Advantages?
- Fixed cost structure enables precise financial planning. Unlike the loan/call model, issuers avoid giving up upside via options.
- No token dumping or opportunistic behavior by MMs—MM earns from fees, not token performance.
What Are the Trade-Offs?
- Requires higher up‑front working capital—both base token and quote-side liquidity must be committed.
- Incentivization can be weaker; misaligned incentives may mean less motivation to exceed baseline expectations.
- May expose issuers to downside risk if the token price declines.
| Criteria | Retainer Model | Loan/Call Option Model |
|---|---|---|
| Capital Source | Provided by issuer (token + quote-side capital) | Provided by market maker |
| Risk Allocation | Issuer retains ownership and market risk | Market maker takes on inventory and market risk |
| Strategy Control | Defined and adjusted by issuer | Defined and executed by market maker |
| Remuneration | Fixed monthly fee | Profit sharing or call/option rights on tokens |
What KPIs, Metrics, and Frameworks Matter?
Which Performance Indicators Are Essential?
- Uptime: Market makers must typically maintain >95% availability to ensure consistent liquidity.
- Latency: Low‑latency trading infrastructure ensures competitive quoting across exchanges.
- Spreads, Depth, Volume: Monitor bid‑ask spreads, order depth, and traded volume across venues.
- Reporting: Real‑time dashboards or regular reports on PnL, market share, and order flow.
What Compliance Elements Should Be Considered?
- AML/KYC processes are critical; absence is a red flag.
- Regulatory environment: In many jurisdictions, token trading and liquidity arrangements increasingly fall under securities law analogies. Retainer arrangements may attract scrutiny.
Concrete Example Scenario
Hypothetical use case:
A mid‑cap token issuer with a fully diluted valuation (FDV) of $50 million seeks liquidity across three exchanges. They negotiate a retainer agreement:
- Monthly fee: $5,000 for first exchange, $3,000 for each additional (reflective of typical pricing).
- KPIs: Minimum uptime of 98%, bid‑ask spread ≤0.5%, minimum daily volume of $100,000.
- Infrastructure: MM deploys low‑latency APIs, issuer funds are held in escrow or separate wallets, all trades visible via dashboard.
At the end of a 6‑month contract, the issuer receives all unused capital back, regardless of token performance. They maintain liquidity and pricing discipline, avoid token dilution or speculative dumping, and control cost predictably.
What Are the 2025 Trends and 2026 Predictions?
What Is Happening in 2025?
- Growing adoption of MMaaS/retainer frameworks by crypto projects seeking transparency and budget certainty.
- Institutional interest rises, with industry players like Flowdesk expanding derivatives and credit desks—indicating maturity of liquidity solutions.
- Regulatory scrutiny intensifies: token-based financing structures are being analogized to securities, increasing oversight risk for non-compliant models.
What Might Emerge in 2026?
- Hybrid models combining retainer with performance-linked incentives (e.g. tiered rebate on hitting tighter spreads).
- Standardization of KPIs: industry may converge on benchmarks (e.g. ≥97% uptime, ≤0.3% spreads across top-tier exchanges).
- Regulatory frameworks: jurisdictions may issue clearer guidance on liquidity-provider roles, disclosure, and custody—benefitting transparent models like retainer.
- Technological innovation: AI-driven liquidity strategies and cross-chain market-making platforms may integrate into retainer MMaaS offerings.
Conclusion
The retainer model, or MMaaS, empowers token issuers with control, predictability, and transparency. By providing both token and quote-side capital and paying fixed fees, issuers retain ownership and define strategies, while benefiting from professional market-making infrastructure. Key metrics—uptime, latency, spreads, depth, and reporting—ensure accountability and efficiency.
In 2025, this model aligns with growing demands for budget certainty, institutional-grade transparency, and regulatory readiness. Looking ahead to 2026, we foresee the rise of hybrid incentive structures, standardized KPIs, and regulatory clarity that further cement the retainer model as an industry standard.
Orcabay, with deep expertise in algorithmic trading, liquidity management, and exchange partnerships, is well-positioned to navigate and support clients through these evolving dynamics, ensuring robust, compliant, and efficient liquidity solutions.
Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, investment, or other professional advice. All opinions expressed herein are solely those of the author and do not represent the views or opinions of any entity with which the author may be associated. Investing in financial markets involves risk, including the potential loss of principal. Readers should perform their own research and consult with a licensed financial advisor before making any investment decisions. Past performance is not indicative of future results.
Jakob Brezigar
Jakob, an experienced specialist in the field of cryptocurrency market making, boasts an extensive international presence. With Orcabay, he has skillfully managed major operations and deals for a wide array of global stakeholders.
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