The core role of a market maker is to ensure that the project token has sufficient trading liquidity.
Written by: 1912212.eth, Foresight News
Rock singer Cui Jian once sang in (Fake Monk): 'I want people to see me, but don't know who I am'. In the ever-changing crypto market, there are many similar 'characters' that attract countless curious eyes.
In 2017, a young man left Wall Street, used his savings to build mines, read white papers, stayed up late to adjust algorithms, and found two colleagues from global well-known market makers and high-frequency trading company Optiver: one was good at trading architecture and the other was good at risk control. The bear market in 2018 was a cruel test, killing a large number of exchanges, project parties, and media. In the most difficult time, there was no external financing and they could only rely on personal beliefs and algorithm models to support it. Until the global financial market fluctuated sharply due to the epidemic, their arbitrage algorithm earned them 120,000 US dollars overnight. A few months later, he began to realize seamless arbitrage between multiple trading platforms.
A year later, the funds operated by the unknown team behind him reached hundreds of millions of dollars, and countless transactions were completed under the large order handover designed by his algorithm. He became the kind of 'you can't see him, and you don't know who he is' character, but you can always feel his presence from the price of the transaction.
He is Evgeny Gaevoy, the founder of Wintermute, and has now become one of the world's largest algorithm-driven crypto market makers. He lives in London and likes to travel to the United States. He likes to play with memes and is also straightforward. When faced with market manipulation questions, he even retorted 'Don't blame me for spraying you if you treat me as an imaginary enemy'.
So what exactly is the role of a crypto market maker?
Usually, if a project party issues a token, it can be released on a DEX. The general steps are to create a trading pair on the DEX, such as X/ETH or X/USDT, and then inject two assets to form an initial liquidity pool, such as 1 million X tokens and 100 ETH. However, when a project party wants to be listed on an exchange like Coinbase or Binance, it cannot simply release the token and expect someone to trade, because it often faces the dilemma of insufficient trading volume. These exchanges need to ensure the liquidity of the transaction. This means that there must always be someone willing to buy and someone willing to sell. Usually, this role is undertaken by a market maker.
Compared to exchanges and crypto VCs that are often discussed in public, market makers conceal their mysterious masks. They are important in the crypto industry, but are also occasionally the behind-the-scenes pushers of token price declines, so they are controversial.
Old pattern disintegrates
A group of professional market makers poured into the crypto market from the last cycle.
At that time, the market was dominated by established institutions such as Alameda Research, Jump Crypto, and Wintermute. These players, with their high-frequency algorithmic trading and huge funds, dominated the liquidity supply of CEXs. Alameda, as FTX's sister company, provided depth for mainstream assets such as Bitcoin and Ethereum during the peak of the 2021 bull market, with trading volume once accounting for more than 20% of the total market.
Alameda Research, a leading market maker in the crypto space, collapsed due to a liquidity crisis at its sister company, FTX. In November 2022, CoinDesk exposed Alameda's balance sheet, and CZ promptly announced the sale of all FTT, leading to FTX's liquidity depletion and a user run. Investigations revealed that FTX misappropriated up to $10 billion in customer funds to lend to Alameda for high-risk trading and to cover losses, creating a fatal cycle. FTX, Alameda, and more than 130 affiliated entities filed for bankruptcy, and SBF resigned as CEO.
Looking back at its glory, Alameda was founded by SBF in 2017 and initially focused on crypto arbitrage and quantitative trading, and quickly rose with algorithmic advantages. After launching FTX in 2019, Alameda became its main liquidity provider, helping FTX's valuation soar to $32 billion. Alameda manages tens of billions of dollars in assets and has made huge profits through leveraged trading and market making in the bull market. SBF has become a crypto billionaire, promoting industry charity and regulatory advocacy.
Caroline Ellison
The final collapse originated from internal governance失控. Alameda partner Ellison admitted misappropriating customer funds at an employee meeting, shocking the industry. Her relationship with SBF added to the drama: In 2023, she served as a key witness for the prosecution, accusing SBF of planning an $8 billion fraud, and pleaded guilty to seven counts of fraud herself. In 2024, she was sentenced to two years in prison. In court, she apologized tearfully: 'I feel heartbroken every day for the people I have hurt.'
Alameda's high leverage was exposed to market fluctuations, and FTX customer funds were illegally borrowed to fill the holes. In 2023, SBF was sentenced to 25 years in prison, and Alameda's assets were liquidated, marking its complete disintegration.
The departure or contraction of established market makers is the direct cause of the vacuum period.
According to Kaiko data, global crypto liquidity was cut in half a week after the FTX collapse, with Bitcoin's 2% depth dropping from hundreds of millions of dollars to less than 100 million dollars.
In the early liquidity battlefield of the crypto market, Jump Crypto and Wintermute were also the two most popular forces.
Jump started as a traditional high-frequency trading giant, Jump Trading. With its deep algorithmic accumulation and capital strength, it entered the crypto market in a big way in 2021, from the Solana ecosystem to the Terra stablecoin system. However, with the collapse of Terra, Jump Crypto shrank its business in 2023 due to investigations by the U.S. Securities and Exchange Commission (SEC), withdrew from some U.S. markets, and laid off more than 10%.
Wintermute quickly rose to prominence with its flexible algorithmic market making and OTC business, and once became the most influential liquidity provider in the CeFi and DeFi fields. The 2022 hacker incident caused it to lose nearly 160 million US dollars, which also exposed the risks behind the rapid expansion; since then, Wintermute has gradually shifted to refined operations and no longer blindly expands.
The trajectories of the two almost condense the entire process of crypto market makers from barbaric growth to prudent contraction in the past five years: from high-frequency arbitrage to ecological support, from aggressive adventure to steady survival, market makers once supported the prosperity of the market, but now they have learned to strike a balance between risk and liquidity.
However, at a time when the front line is constantly shrinking and tending to be cautious, macro and micro factors once again promote new players to enter the market. The Fed's interest rate cuts in 2023-2024 stimulated capital repatriation, and the market cycle started after Bitcoin halving in 2024. A new wave of token issuance has emerged: inscriptions, re-staking, meme coins, AI agents, stablecoin boom, RWA, and on-chain US stocks are being staged in turn. In addition, US spot ETFs have also attracted a lot of funds, and the data is also very bright.
According to SoSoValue data, as of August 28, Bitcoin spot ETFs have accumulated a total net inflow of 54.19 billion US dollars, and Ethereum spot ETFs have a total net inflow of 13.64 billion US dollars. The relaxation of the regulatory environment is also an important reason. Since Trump took office in January 2025, he has emphasized supporting the responsible growth of digital assets, blockchain technology and related technologies, and revoked the relevant policies of the Biden administration. The order also established a digital asset working group within the National Economic Council, aimed at proposing a federal regulatory framework, including market structure, supervision, consumer protection and risk management.
In addition, the technical threshold of the industry is constantly decreasing, and the needs of project parties are also changing, prompting the industry to reshuffle.
New nobles rise
The meaning of the vacuum period is that it leaves huge space for new players. Representative players include Flow Traders, GSR's new division, and DWF Labs. The core members have diverse backgrounds and their business scope covers CEX/DEX market making, OTC and structured products.
Flow Traders
Flow Traders, a global liquidity provider originating from the Netherlands, was initially known for exchange-traded products (ETPs), but decisively shifted to the crypto field in 2023, as if a seasoned navigator had captured the digital outlet. The team has a strong background, consisting of a group of quantitative trading experts and financial engineers who emphasize a 'strong team-driven culture'. The Amsterdam headquarters office is like a precision laboratory, gathering elites from Wall Street and Silicon Valley.
Thomas Spitz
In July 2025, Thomas Spitz took over as the new CEO of Flow Traders. This former executive has had a brilliant career of more than 20 years at Crédit Agricole CIB, holding multiple senior roles and possessing deep experience in international team management and cross-cultural leadership. He led MiCAR compliant stablecoin AllUnity and partnered with DWS and Galaxy Digital to reshape the tokenized asset landscape.
In the second quarter of 2025, its net trading income reached 143.4 million euros, an increase of 80% year-on-year. In terms of market making characteristics, Flow Traders is good at cross-chain and institutional-level support, providing continuous liquidity. Currently, third-party data monitoring shows that it includes tokens such as AVAX, LINK, DYDX, GRT, STRK, PROVE, WCT, PARTI, ACX, and EIGEN. It is worth mentioning that in mid-2024, Flow Traders also helped the German government smoothly handle the confiscated BTC without causing a major decline risk in the secondary market.
Flow Traders uses its own funds and algorithms to expand its profits, while GSR obtains some funds through VC investments such as Pantera Capital.
Monitoring data shows that its current market making capital is 16.94 million US dollars, and its fund balance has fallen back to the bottom of the historical range.
GSR Markets
GSR Markets is an algorithmic digital trading company based in Hong Kong. It uses its own software to provide liquidity for order execution solutions for several digital asset classes. The team has a diverse background, with members mostly former hedge fund traders and blockchain engineers. The New York and London offices gather global talent to provide institutional-grade market making, OTC trading and risk management. GSR's market making is characterized by sophisticated risk hedging and global connectivity. They connect dozens of exchanges to provide two-way liquidity for buyers and sellers, and are good at using high-frequency algorithms to deal with volatility.
In 2023, GSR reduced US trading to avoid regulatory storms, and executives such as the CFO left. In 2024, GSR transformed from pure trading to ecological partner. At the Consensus Summit in 2025, its partner Josh Riezman said bluntly: 'DeFi and CeFi integration is the future, and we are preparing for the next stage.'
Riezman used his own server to mine Ethereum and accumulated his first pot of gold. His past experience can be called bright. He has worked for several years in traditional and crypto companies such as Deutsche Bank, Societe Generale, and Circle. GSR under his leadership has also become the first crypto liquidity provider in the industry to obtain licenses from the UK FCA (Financial Conduct Authority) and the Singapore MAS (Monetary Authority of Singapore).
Josh Riezman
According to its public information, the altcoins made by GSR include: WCT, RNDR, FET, UNI, SXT, SPK, RSC, GALA, HFT, PRIME, ARKM, BIGTIME, USUAL, MOVE, BAN, TAI, PUFFER, ZRO, IINCH, ENA, WLD, etc. If you observe carefully, it is not difficult to find that among some altcoins listed on Binance spot, the currencies made by GSR often have a period of rise after being listed, rather than a sharp drop as soon as they are listed.
According to Arkham data, its current public address market making capital volume is 143.76 million US dollars. Its main market making exchange is Binance. The fund balance remains at a medium level.
DWF Labs
DWF Labs was born in 2022. Managing partner Andrei Grachev comes from a traditional trading background. He used to be the head of Huobi Russia. At the age of 18, he entered the logistics industry, then started trading in the traditional market in 2014, and later transformed into e-commerce, earning a sum of money when ETH rose from $7 to $350, thus starting his crypto journey.
He has 5 Chinese tattoos, and DWF under his leadership is highly controversial in the market, but he is proud of it. Not only that, DWF also plays multiple roles, encompassing VC, OTC, incubator, ecosystem, fundraiser, event brand, TVL provider, DeFi Taker, consultant, listing agent, HR, PR/marketing company, KOL, RFQ quotation request platform, and more.
Invested in over 400 projects between 2023-2025, totaling over $200 million.
DWF mainly targets East Asian projects and various new and old sentiment-themed targets. According to publicly available information, the altcoins made by DWF include SOPH, MANTA, YGG, IOST, JST, MOVE, CAT, MONKEY, ID, XAI, LADYS, etc. Interestingly, as of now, the DWF Labs official market maker address only has less than 9 million US dollars left.
Many emerging players are supported by Web3 venture capital or expand through trading profits. DWF Labs snowballed with its own funds, becoming the most active investment institution in 2023-2024. By 2025, its 'venture capital + market making + incubation' model has covered multiple narrative areas. These sources of funds allow emerging players to quickly deploy in a vacuum, for example, DWF Labs invested in AI and RWA projects through its own capital in 2024, with a significant snowball effect.
More flexible token incentive protocol cooperation models are common, and some are directly tied with investment + market making. For example, DWF Labs provided stablecoin support for Falcon Finance in 2025 with an annual return of 12-19%, but it triggered bad debt disputes. GSR aggregates liquidity through 0x API to help projects achieve efficient transactions on the Ethereum mainnet. Jupiter Aggregator routes the best path on Solana, and emerging players such as Flow Traders use it to reduce the technical threshold. These innovations allow emerging players to stand out in the fragmented market, contrasting with the centralized models of established players.
Controversy
The rise of market makers is always accompanied by controversy. The most rapid and controversial rise in this cycle is DWF Labs.
During the Token 2049 forum held in September 2023, its co-founder Andrei Grachev posted a tweet after the 'Web3 Connect' event to thank the invitation. Unexpectedly, market maker GSR angrily criticized on the Twitter platform, saying that DWF Labs is not qualified to sit with the speakers of this forum: market makers GSR, Wintermute, and OKX, which is an insult to them.
GSR said that it is very sad that at the end of 2023, bad actors like DWF Labs can still get so much attention. Another market maker, Wintermute CEO Evgeny Gaevoy, liked the tweet. More interestingly, in the activity photo shared by market maker GSR, Andrei Grachev's part was hard cut out. Evgeny posted a tweet revealing Andrei Grachev, which deeply investigated Andrei Grachev's past experiences and was believed to be involved in OneCoin, the most notorious fraud project in crypto history. However, Evgeny mainly commented on the poor investment performance of DWF Labs summarized in the article and called it the 'wrong market maker'.
Andrei once said in an interview with Foresight News that he does not take these criticisms and complaints seriously. 'As long as we are operating within the correct and legal scope, if a method proves to be effective, we will adopt it without worrying about what others say or being afraid of criticism or complaints from competitors.'
This is just one of the small episodes of conflict between market makers. The collusion between market makers and project parties has caused an uproar among investors.
In late April 2025, the layer-2 project Movement hired Web3Port as its official market maker and loaned them 66 million MOVE tokens to provide liquidity. However, it was revealed that these tokens were transferred to an entity called Rentech, which was confirmed to be an agent or shadow company of Web3Port. This transfer may involve internal fraud or informed execution: the contract shows that once MOVE's market value reaches $5 billion, Rentech can sell the tokens for profit sharing. This incentivized price manipulation.
After the official launch of the MOVE token, Rentech quickly manipulated the price to push it to the $5 billion market value threshold, and then sold $38 million worth of tokens the next day (approximately 5% of the total supply). The sale directly led to a plunge in MOVE's price: collapsing 86% from a high of $1.45 at the beginning of the listing, with a single-day drop of 20-30%, and a market value evaporating by billions of dollars. After this behavior was exposed, it triggered a chain reaction. Internal sources indicate that Movement co-founder Rushi Manche may have been involved in the signing of the agreement, and the project party claimed to have been 'deceived,' but the contract details show the involvement of hidden intermediaries and consultants.
Finally, Movement Labs terminated Manche's co-founder position and rebranded as Move Industries. Binance also froze the market maker's related income and prohibited it from market making on Binance.
However, the huge negative impact it caused cannot be recovered. The price of MOVE currency has fallen more than 10 times from the highest point, and most investors have suffered heavy losses.
According to defiLlama data, its TVL also plummeted from the highest 166 million US dollars to 50 million US dollars, a drop of more than 300%.
This typical negative event exposed the ugly cover-up of collusion between project parties and market makers.
At the same time, the entire industry began to reflect on the problems. In terms of contracts and incentive mechanisms, market maker agreements should avoid manipulation incentives such as market value thresholds, and clearly define repurchase obligations and transparent audits. Movement's case shows that hidden intermediaries are prone to fraud. In terms of transparency, project parties should disclose market maker details, token transfer records, and promise execution (such as repurchase). Delayed airdrops and unfulfilled promises will amplify the crisis of confidence and lead to community loss.
Emerging projects also need to strengthen internal supervision to avoid founders being involved in suspicious transactions. Leadership integrity is the key to the survival of the project. If it is just to issue coins and let retail investors become exit liquidity, the final outcome will be a lose-lose situation.
Summary
When the spotlight sweeps across the trading floor of the crypto world, those giant hands that truly control the flow rate are often hidden in the data torrent. Market makers, the 'dark pool operators' in the digital finance world, would rather let the code run silently on the chain than show their names in public. Among the 63 active coordinates recently captured by RootData, the trading volume of only the top players is enough to stir up the market, while more such as Web3Port, Kronos Research, and B2C2 are weaving a liquidity web worth trillions of dollars with algorithms.
Their offices have no Arc de Triomphe, only a never-ending stream of orders; their names rarely make headlines, but they can freeze or boil the order book of some tokens in an instant. When you track the footprints of a mysterious large order on the chain, you may be stepping on a 'liquidity trap' carefully designed by a secret market maker - and all this is just the most superficial ripple in their vast strategy matrix.
Now, 63 known coordinates have been lit up, but how many unmarked eyes are still in the dark forest?