A new report examining the transparency level of cryptocurrency projects shows that secret agreements between protocols and market makers increase the risk of manipulation.
As the cryptocurrency ecosystem expands, the question of how honest projects are with their investors has begun to be asked more loudly. A recent study conducted by Novora, examining the top 150 protocols by market value, has reached striking results. The research proves that while projects present their revenues transparently, they maintain the mystery of critical operations behind the scenes.
According to the data, 91% of protocols present revenue data in a traceable manner, while the proportion of those explaining the circulating supply amount hovers around 88%. However, financial transparency rapidly declines after this point. Particularly, details such as the value acquisition processes of projects and revenue segmentation continue to remain a black box for a large part of investors.
Market Maker Agreements Are Kept Confidential
The most striking point of the research was the agreements made with institutions referred to as market makers (MM), which manage trading boards on exchanges. Less than 1% of the examined protocols publicly disclose under what conditions they work with these institutions. This situation becomes the focal point of criticisms regarding artificially manipulated prices and market manipulation.
Only 8% of the projects that fail to inform investors publish regular token reports. The usage rate of communication tools such as quarterly updates and investor channels remains below 20%. This structural difference between mandatory disclosures in the traditional finance world and voluntary shares in the crypto world indicates that the sector still has a long way to go in terms of institutionalization.
