We can look for patterns from the performance of OP and ARB tokens, which are also on the Layer2 track and in which Wintermute participates in market making.
Written by Karen, Foresight News
God rewards hard work, and the Starknet airdrop is finally settled.
Should you sell STRK after receiving the airdrop? Today we will seek inspiration from the market making style of STRK market maker Wintermute. As a very active market maker in the cryptocurrency field, Wintermute creates liquid and efficient markets on CEX, DEX and OTC trading platforms, providing liquidity for more than 50 exchanges and trading platforms such as Binance, Bybit, Coinbase, Kraken, Bitfinex, Bitstamp, Uniswap, dYdX, etc.
According to Wintermute's official website, as of the end of 2023, Wintermute's cumulative trading volume reached nearly 3.7 trillion US dollars. Wintermute is present among the market makers of blue-chip tokens in various fields, such as OP, ARB, WLD, BLUR, DYDX, APE, etc. The community believes that Wintermute's market-making style is also characterized by high-priced opening, selling, washing, absorbing funds and re-pulling. At the same time, in the market-making process, in addition to direct transactions in the secondary market, it is also accompanied by news, market trends and other fronts.
After cross-checking the weekly and monthly charts of OP, ARB, WLD, BLUR, DYDX, APE and other non-Wintermute market-making tokens in the same sector, the author found that Wintermute's market-making style is affected by many factors and cannot be judged based on the performance of only a few tokens, such as the field in which the token is located, the token's market value, the bull-bear cycle when the token is issued, the share of Wintermute's market making, trading strategies and other factors.
This article will look for patterns in the performance of OP and ARB tokens, which are also on the Layer2 track and in which Wintermute participates in market making, to provide some reference for users when making STRK decisions.
ON
Wintermute encountered some challenges and controversies in the process of market making on OP. A few days after the OP token was issued, Wintermute disclosed a FUD news that when Wintermute initially received a loan of 20 million OP (the total initial supply of OP was 2^32 (4,294,967,296)), due to an internal error of the Wintermute team, it provided Optimism with a Gnosis Safe multi-signature wallet address deployed on the Ethereum mainnet instead of the pre-prepared Optimism address. Subsequently, Wintermute agreed to receive an additional 20 million OP, while providing 50 million USDC as collateral and exploring fund recovery solutions. Although Wintermute recovered most of the OP afterwards, some observers questioned Wintermute's true motivation and purpose for market making on OP.
Due to the scientists' rush to buy the Optimism token when it was first launched, the serious delays in the mainnet and RPC after the airdrop application began, and the mistakes made by Wintermute in market making, the price of OP fell from around $2 after the opening to around $0.5 20 days later, a drop of 70%. After several rounds of pull-ups and shocks, the current price is around $3.8. The three washes lasted from 1 month, 4 months to 6 months.
OP price trend, source: CoinGecko
ARB
Before ARB was opened for airdrop claims, on March 23, 2023, the address starting with 0xcce30 marked as "Wintermute" by Arkham received 40 million ARBs (the total number of ARBs is 10 billion) from the Arbitrum Foundation.
A few days after the airdrop, the Arbitrum Foundation launched the AIP-1 proposal, proposing the introduction of a decentralized autonomous organization structure, ArbitrumDAO, and applying for a funding allocation of 750 million ARB tokens. However, the Arbitrum Foundation transferred 750 million ARB tokens as early as the early morning of March 17, and the transfer address was the administrative budget wallet of Arbitrum in the AIP-1 proposal at the end of March.
The opening price of ARB was around $1.5, but due to the chaotic governance, lack of trust and transparency, untimely response, and the continued fermentation of FUD sentiment caused by token selling, the price of ARB has been fluctuating at $1.2 in the next two weeks. Then, after the market rose to above $160 million, it continued to fall again. It has been fluctuating between $1.3 and $0.75 for the next seven or eight months, and then began to rise steadily since December last year. The current price is around $1.8.
ARB price trend, source: CoinGecko
STRONG
Wintermute received 2 million market-making tokens before the STRK airdrop (the total amount of STRK is 10 billion), and Flow Traders and Amber Group are also STRK market makers. After the token was launched, the highest price of STRK on Binance was $7.71 at the beginning of its listing, and $3.5 on OKX, and then gradually fell, fluctuating between $1.6 and $2.
Today, StarkWare announced an update to the lockup schedule for early contributors and investors. Specifically, the 134 million tokens originally scheduled to be unlocked on April 15 will be adjusted to only 64 million tokens. After that, 64 million tokens will be unlocked each month until March 15, 2025, and 127 million tokens will be unlocked each month for the next 24 months until March 15, 2027. 580 million tokens held by early contributors and investors will be unlocked by the end of 2024, which was originally planned to be 2 billion. An additional 1.4 billion tokens will be gradually unlocked by the end of 2025, another 1.5 billion will be unlocked by the end of 2026, and 380 million will be unlocked by March 15, 2027. Affected by this, STRK broke through $2.1.
Considering that nearly 74% of the STRK airdrop has been claimed, it can be understood that the selling pressure should have been alleviated to a large extent. In addition, since Wintermute's market-making tokens in STRK account for a smaller proportion than those in OP and ARB, the impact on the market may also be smaller.
It is worth noting that the Three Arrows Capital liquidator address "Teneo: 3AC Liquidation" also received 134 million STRK this month, making it the 9th largest holder of STRK. This is also an event worthy of attention, which may mean that during the liquidation process of Three Arrows Capital, its assets were redistributed or processed. As early as March and November 2021, Three Arrows Capital participated in StarkWare's $75 million Series B financing and $50 million Series C financing, respectively. In 2022, Three Arrows Capital liquidator Teneo controlled assets such as $35.6 million worth of fiat currency and StarkWare tokens.
In general, in terms of price performance, OP and ARB fell within 10 to 20 days after opening, then fluctuated up and down, and rose sharply after experiencing multiple small peaks. Two other points to note are that both OP and ARB experienced FUD crises after issuing coins; and the cycle they were in was the period when the market turned from bearish to bullish, and this market condition had a certain positive impact on their overall price performance.
For STRK tokens, if we refer to the performance of the two Layer2 tokens that Wintermute participated in market making, there may be some short-term opportunities. If you have not sold the airdropped tokens before, now may not be an ideal time to sell.
Of course, when making decisions, you also need to pay attention to market trends, understand the current market hot spots and capital flows, and formulate appropriate investment strategies based on your risk tolerance, investment period and goals. At the same time, considering the volatility of the cryptocurrency market, it is recommended to adopt a long-term investment strategy to avoid being disturbed by short-term fluctuations.
If you missed the Starknet airdrop or want to explore other opportunities in the Starknet ecosystem, you can learn about the "Starknet DeFi Spring" program launched by the Starknet Foundation. The program will last for six to eight months and will issue 40 million STRKs to DeFi protocols participating on Starknet. Participating users have the opportunity to get the platform's own token airdrops and STRK incentives, which can be said to kill two birds with one stone. If you are interested, you can click on the article "Missed the Starknet airdrop, 40 million STRK open incentive plan to learn about" to learn about the Starknet ecological projects participating in the program.