> ## Documentation Index
> Fetch the complete documentation index at: https://docs.melt.finance/llms.txt
> Use this file to discover all available pages before exploring further.

# Market Makers

> Designated Market Maker program and peg maintenance

## Designated Market Makers (DMMs)

Melt is not a market maker. It is an infrastructure protocol. Independent professional market makers deliver liquidity through the DMM program.

### Responsibilities

* **Peg Maintenance** — DMMs utilize arbitrage loops (buying on Melt/selling externally, or vice versa) to maintain price alignment with global reference prices
* **Depth Assurance** — continuous bid/ask limit orders ensure standard retail trade sizes execute with negligible slippage

### The Arbitrage Mechanism

When Melt Asset prices deviate from oracle prices, DMMs are incentivized to correct them:

* If `QQQ` trades at 2,010 while the oracle price is 2,000 → DMMs mint new `QQQ` at \$2,000 (plus fees) and sell on the order book, forcing the price down
* If `QQQ` trades at 1,990 while the oracle price is 2,000 → DMMs buy `QQQ` on the order book and redeem for the underlying at \$2,000, forcing the price up