The Ugly Truth About Cowboy Market Makers in Web3

Cowboy-style market makers are becoming a growing concern in Web3. Unlike ethical market makers such as Kairon Labs, these actors often operate without clear standards. They attract token teams with promises of fast liquidity but deliver little transparency or long-term stability. This approach might work in the short term, but it leads to harmful outcomes for projects, communities, and the broader ecosystem.

As digital assets evolve and regulation tightens, the need for experienced, principled partners is more pressing than ever. Projects that partner with cowboy firms often learn too late that trust and clear reporting are more valuable than inflated numbers.

Cowboy Tactics Often Harm the Very Projects They Claim to Help

In today’s crypto markets, market makers play a vital role in ensuring price stability and trade execution. But not every provider follows the same rulebook. Cowboy firms use tactics that may look good on paper—like sudden volume spikes or tight bid-ask spreads—but these metrics are often manipulated.

Some of these players engage in wash trading, artificially inflating volume to attract buyers or impress exchanges. Others charge large retainers up front, offer minimal follow-up, and provide little insight into what they actually do once tokens go live. They avoid accountability and often fail to share real-time metrics with the project teams.

Projects may also find themselves stuck in unfavorable agreements, with no way to exit or adjust once the market maker underperforms. In extreme cases, cowboy firms have even been known to front-run user trades, turning what should be a support service into a liability.

These behaviors not only mislead token teams but can also erode trust in Web3 markets overall. New users, investors, and exchanges suffer when trading activity lacks authenticity. It becomes harder to identify real demand, harder to maintain a healthy token economy, and harder to grow a credible brand.

Broken Trust and Exchange Pushback

In addition to unacceptable trading performance, cowboy market making can cause issues with leading exchanges. Centralized exchanges such as Binance, Coinbase or OKX are more and more wary of token projects with abnormal or artificial volume trend patterns. Should an exchange suspect a market maker of illicit activity, that can result in delistings or closer scrutiny over additional listings.

This is detrimental to the long-term of a project and frequently ruins the rapport between a project and the community. Users would start doubting the fundamentals when movements in prices seem unpredictable and trading volumes have been uneven. It may not make a difference, whatever the basis product or team may be, perception is what governs market response.

In other cases, projects that choose a cowboy partner find themselves without technical support during key moments—such as major announcements, listings, or unlock events. This leads to sharp price drops, unexpected slippage, and poor execution when liquidity is needed most.

Without dedicated support or visibility into the trading logic, project leaders are often left guessing. The result is market confusion and weakened confidence from stakeholders.

Why Ethical Market Making Builds Lasting Value

There is a more ideal direction and people are seeing the distinction reflected in even more projects. Ethical market makers organize their work around openness, the ability to access information, and matching to a project. Instead of providing false hopes they present themselves via consistent liquidity, reasonable prices and broad technical expertise.

Kairon Labs, in particular, has assisted more than 400 digital asset initiatives since its inception in 2019. The company does not only specialize in algorithmic trading but also in personalized service. It allocates particular teams to every project, ensuring that strategies are aligned to goals and capable of adjusting to changing market conditions.

Its proprietary trading engine connects to over 100 centralized and decentralized exchanges, allowing for seamless coverage and better control of order book behavior. Importantly, the firm listens to clients and adapts its systems when needed. In late 2024, it launched a real-time reporting dashboard after teams asked for better visibility into trading activity—replacing the manual update process that had been in place before.

That kind of responsiveness is a key difference between professional market makers and cowboy operations. It shows a willingness to evolve with the needs of the client, not just the state of the market.

What to Ask Before Choosing a Market Maker

Many token teams are entering this space for the first time. Choosing a market maker often happens during fast-moving token launches or early fundraising periods. But this decision should not be rushed. There are key questions every team should ask to avoid the cowboy trap.

First, ask about past experience. Has the firm worked with tokens that are now active on top exchanges? Can they offer case studies or metrics from successful campaigns?

Second, ask about how their software operates. Is it built in-house? Is it actively managed by human traders or just left to run?

Third, ask what kind of reporting is available. Ethical market makers provide detailed dashboards, execution logs, and support channels. Cowboy firms, by contrast, often avoid transparency and rely on vague monthly reports—if any at all.

Teams should also confirm that their partner offers support during peak moments. Token launches, large announcements, and ecosystem partnerships all come with trading volume shifts. Having a partner who is present during these times can help avoid price crashes and public backlash.

Kairon Labs includes onboarding calls, dedicated account managers, and constant market monitoring as part of its service. It also avoids locking clients into one-size-fits-all packages, instead tailoring each deal to the token’s specific market strategy and stage.

The Web3 Space Cannot Afford Cowboy Behavior

As more capital enters Web3 and regulators look more closely at token ecosystems, market participants have a responsibility to build with integrity. Cowboy market makers may still operate in corners of the space, but their methods are losing ground.

Projects that choose ethical partners are not just protecting their launch. They are also building credibility, establishing investor trust, and setting the tone for long-term growth.

Market making is no longer just a technical service. It’s a reflection of the project’s values. Teams that want to stand out in a crowded market must ask hard questions and demand real answers.

Kairon Labs represents one of the firms committed to raising industry standards. Its track record, software, and client-first model offer a roadmap for how professional market making should be done in the Web3 era.