In a market full of opportunities and challenges, market makers need to constantly adapt and innovate in order to maintain their advantages and influence.
Author: Mlixy
Cryptocurrency market makers refer to institutions or individuals who provide liquidity and quotes for cryptocurrency trading platforms or projects. They use algorithms and strategies to profit from market fluctuations and demand differentials. Market makers play an important role in the cryptocurrency industry, as they not only reduce trading costs and improve trading efficiency, but also promote the development and promotion of new projects.
DWF Emerges as a Dark Horse
However, there is fierce competition and conflicts among market makers, especially in a market environment full of change and uncertainty. Recently, a new market maker named DWF Labs has caused a stir, facing exclusion and attacks from peers, and even being questioned for its legitimacy and integrity.
DWF Labs is a Web3 investment company established in June 2022, claiming to be one of the world's leading cryptocurrency market makers. The company claims to have provided market-making services for over 50 trading platforms and projects and traded approximately $1.5 trillion in digital assets in 2021. The company also announced a series of high-profile investments involving multiple well-known cryptocurrency projects such as Mask Network, YGG, Synthetix, TON, and Radix.
DWF Labs' co-founder Andrei Grachev graduated from Orenburg State University (OSU) and previously had work experience in the logistics and online trading industries. In 2017, he joined the blockchain and cryptocurrency industry, serving as the Managing Partner of Crypsis Blockchain Holding, Vice President of Trading at the Russian Association of Cryptocurrency and Blockchain (RACIB), and CEO of Huobi Russia. In 2018, he co-founded DWF Labs.
Unique Market-Making Approach
Before 2023, DWF Labs did not "go public"; however, this year, DWF Labs has frequently participated in market-making for multiple projects, attracting significant attention. According to data on its official website, since 2018, DWF Labs has conducted spot and derivative trading on over 60 top trading platforms, trading in over 800 currency pairs, covering almost all verticals of Web3, maintaining a leading position in the entire market-making field.
In selecting market-making currencies, DWF Labs primarily targets East Asian projects and various new and old emotional themes. Its market-making projects include but are not limited to CFX, MASK, ACH, FET, and YGG. Among them, YGG and the late August CYBER are projects with high discussion levels within the cryptocurrency community regarding DWF Labs.
Doubts Arise
In these two projects, the "pump and dump" strategy has been the biggest doubt within the community about DWF Labs and the core of the controversy surrounding DWF Labs. Many projects in which DWF Labs participated in market-making, including these two projects, have experienced significant short-term price fluctuations, resulting in heavy losses for many in the YGG and CYBER projects. Wintermute took the lead in questioning DWF Labs' malicious intentions, and some in the community also questioned whether DWF Labs had the suspicion of "being both a referee and a player."
In addition, some pointed out that DWF Labs' investment amounts do not match the on-chain data, its leaders have been involved in fraudulent projects like OneCoin, and its market-making business is not actually executed but rather uses investment news to sell tokens and profit from retail investors. Some even suspect whether DWF Labs is involved in money laundering or other illegal activities.
These doubts reached a climax in September 2023 when C² Ventures hosted the "Web3 Connect" forum during Token 2049, inviting DWF Labs and three other market makers, GSR, Wintermute, and OKX, to participate in the discussion. GSR, founded in 2013, focuses on providing cryptocurrency derivatives and liquidity solutions for institutional clients. Wintermute, established in 2017, is an algorithmic market maker focusing on providing liquidity for decentralized finance (DeFi) and metaverse projects. OKX, founded in 2014, is a leading global cryptocurrency exchange platform that also provides its market-making services.
GSR tweeted that DWF Labs is not qualified to discuss with them because they lack real market-making capabilities and experience, as well as genuine investment capabilities and intentions. GSR also stated that DWF Labs is an insult to them, and they will not cooperate with or recognize DWF Labs. Wintermute's CEO Evgeny Gaevoy endorsed GSR's tweet and stated that they also will not cooperate with DWF Labs. OKX did not make a clear statement.
DWF's Rebuttal
DWF Labs did not choose to remain silent but instead launched a strong counterattack. DWF Labs' co-founder Andrei Grachev responded to GSR's accusations on Twitter, calling GSR an "old relic" without innovation and progress, only complaining on social media. He also stated that DWF Labs' market-making and investment capabilities are evident, and they do not need GSR's recognition or cooperation. He also ridiculed GSR's performance and reputation, calling them "incompetent scammers."
DWF Labs' other co-founder Alexey Bashlykov also tweeted in support of Grachev, stating that they will not be affected by the attacks from GSR and Wintermute, and they will continue to provide high-quality services and investments for the cryptocurrency industry. He also stated that they will not participate in the Web3 Connect forum because they do not want to waste time with "ignorant and jealous people."
Closing Thoughts
This market-maker spat has attracted widespread attention and discussion within the cryptocurrency community. Some support DWF Labs, believing it to be a company with potential and innovation, while others support GSR and Wintermute, seeing them as experienced and reputable companies. Some remain neutral or skeptical, believing that DWF Labs needs to provide more evidence and transparency to prove its legitimacy and integrity.
Regardless, this debate reflects the competition and changes in the cryptocurrency market-making industry, showcasing the strategies and styles of different market makers. In a market full of opportunities and challenges, market makers need to constantly adapt and innovate to maintain their advantages and influence. At the same time, market makers also need to adhere to industry norms and ethics, maintaining their reputation and trust to earn the respect and support of clients and partners.
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