Market Making Cost Calculator
Calculate liquidity provision and MM expenses
Token Details
Market Making Model
Retainer Fees
Token Loan & Options
Inventory Requirements
Cost Summary
Inventory Locked
Call Option Scenarios
Market Maker Comparison
| MM Tier | Monthly Fee | Token Loan | Call Option | Min Deposit | Examples |
|---|---|---|---|---|---|
| Tier 1 | $30K-$100K | 3-5% | 1-3% | $500K+ | Wintermute, GSR, Jump |
| Tier 2 | $15K-$40K | 2-4% | 1-2% | $200K+ | Flowdesk, Keyrock, Caladan |
| Tier 3 | $5K-$20K | 1-3% | 0.5-1.5% | $50K+ | Smaller/Regional MMs |
Pricing Model Comparison
Retainer Model
- • Fixed monthly fee
- • You provide inventory
- • Predictable costs
- • Lower risk for you
- • MM less incentivized
Loan + Option Model
- • Token loan to MM
- • Call options as payment
- • Variable cost (price dependent)
- • MM highly incentivized
- • Expensive if token moons
Hybrid Model
- • Lower retainer + smaller options
- • Balanced risk sharing
- • Moderate predictability
- • MM reasonably incentivized
- • Most common approach
When to Use Market Making Calculator
Compare MM Proposals
Got quotes from Wintermute and Flowdesk? Input both deals to see true total cost over 12 months including option scenarios.
Budget Liquidity Costs
Planning 3 exchange listings? Calculate total MM budget needed. Don't underestimate - MM costs often exceed listing fees.
Model Option Costs
If your token 5x's, how much do call options cost you? Model different price scenarios before signing that loan agreement.
Negotiate Strike Price
MM wants 50% strike premium? Show them why 100% is fairer. "At 50% premium, a 3x pump costs us $2M in options."
Plan Inventory Allocation
How much of your token supply goes to MM? Calculate the opportunity cost of locking 5% of circulating supply for 12 months.
Retainer vs Loan Decision
Cash-rich but token-poor? Retainer makes sense. Expecting 10x? Loan model might cost you millions in options.
Frequently Asked Questions
Can I switch MMs mid-contract?
Usually not without penalties. Most contracts have 6-12 month minimums. Negotiate exit clauses upfront. Some allow 30-60 day notice after initial period.
What if MM underperforms?
Include KPIs in contract: max spread, min depth, uptime. If they miss targets, you can renegotiate or exit. Get performance guarantees in writing.
Do I need MM for DEX too?
Different approach. DEX uses LP pools, not order books. You provide liquidity directly or use protocols like Uniswap. Some MMs offer DEX services separately.
What's a fair option percentage?
1-2% of loaned tokens is standard. Over 3% is expensive. Under 1% means MM isn't taking much risk. Negotiate based on your token's volatility and growth potential.
Can MM manipulate my token?
Reputable MMs don't. But some bad actors exist. Check references, avoid unknown MMs, include anti-manipulation clauses. Monitor trading patterns closely.
When do I get my tokens back?
At contract end, minus any exercised options. Loan model: MM returns tokens or pays strike price. Get clear terms on return timeline and conditions.
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