Some market makers profit from token lending, which may "kill" cryptocurrency projects

Planet Daily News: Some market makers are turning token loans into a profit machine, pushing small crypto projects into a death spiral. According to reports, a market maker model called the "loan option model" involves project teams lending tokens to market makers, who then use these tokens to provide liquidity, stabilize prices, and assist projects in listing on crypto exchanges. However, behind the scenes, some market makers are exploiting this controversial token loan structure for personal gain. These agreements are often packaged as "low-risk, high-return" but actually severely impact token prices, throwing nascent crypto teams into chaos and struggle. Ariel Givner, founder of Givner Law, stated, "Their operation works like this: Market makers borrow tokens from project teams at an agreed price, and in exchange, they promise to help these tokens list on major exchanges. If they fail to fulfill their promise, they must repay the tokens at a higher price within a year." In reality, market makers often sell the borrowed tokens, triggering an initial price crash. After driving down the token price, they repurchase the tokens at a low price to generate profits. (Cointelegraph)