Author: Climber, Golden Finance

In recent days, YGG, DODO and C98 have experienced a sharp rise and fall after the news of DWF Labs' related fund movements was released in the market. This has further confirmed the previous speculation of some institutions and investors that DWF Labs has repeatedly engaged in market making. For this reason, the projects planned by DWF Labs have been made into investment reference charts to increase the chances of betting on the next rising coin.

However, due to the differences in the level of investors, some people win both in the ups and downs, while others suffer heavy losses in this short-term market. In this regard, some people believe that DWF Labs's manipulation of the crypto market is too blatant, which will seriously affect the reputation of the cryptocurrency circle and may be subject to stricter supervision.

So how did DWF Labs influence the price trend recently? Is it to benefit institutions and qualified investors, or to promote the long-term inclusive benefits of market-making projects? In addition to the currencies that have caused drastic fluctuations after its intervention, which projects that have not yet risen have it focused on?

DWF Labs Market Making

Starting from August 6, DWF Labs released news about funding decisions of YGG, DODO, and C98, which prompted the three currencies to continue to rise after they had already risen. Among them, YGG had the largest increase in the second stage, close to 50%. However, all three currencies fell back quickly after one day of trading, and YGG also had the largest drop of about 70%.

In this round of sharp rise and fall, data shows that institutional selling behavior is the most obvious. After the short squeeze, Wintermute Trading transferred the most to the exchange among all institutions, followed by BITKRAFT Ventures, Sfermion, Youbi Capital, etc.

In addition to institutions, two large investors also profited from the surge, depositing a total of 3.57 million YGG (about 2.06 million US dollars) in Binance. Among them, a whale with an address starting with 0x639B deposited 2 million YGG (about 1.16 million US dollars) in Binance.

The most controversial DWF Labs transferred 3,649,995 YGG (current price: $0.61, a total of approximately $2.23 million) to Binance at around 10 p.m. on August 6. In early February this year, the agency received 8 million YGG from the YGG Treasury, which had been transferred to Binance twice before, 700,000 YGG on February 14 (current price: approximately $0.28) and 3.65 million YGG on June 19 (current price: approximately $0.14).

Previously, DWF Labs has been criticized by the outside world for its "VC + market maker" business model. As more and more evidence came to light, DWF Labs no longer concealed the fact and directly posted a sign on its official website that it provided such services.

DWF Labs clearly states that it is a global digital asset market maker and a multi-stage web3 investment company for project development, and is engaged in high-frequency cryptocurrency trading. It currently trades in the spot and derivatives markets on more than 40 top exchanges.

In order to attract more commercial clients and project parties, DWF Labs mentioned in its “Market Making” business that it “will provide efficient and sustainable liquidity for our partners.” Therefore, the similar trends of YGG, DODO, and C98, as well as other previously market-making currencies, just prove the business level and service quality of DWF Labs.

The agency also mentioned that DWF provides cutting-edge market-making execution capabilities, creates trading volume and provides healthy liquidity for projects as a service. Currently, they have integrated with the top 40 exchanges and trade more than 800 currency pairs, including spot and derivatives.

For the cooperating project parties, DWF stated that it does not charge any onboarding fees, monthly fees, transaction fees, market making cross fees or any additional fees. In addition to providing high-touch and 24/7/365 coverage services,

Through market making, DWF said it can allow other market participants to trade the project's tokens with less price impact, which can increase market depth and make investors more confident in the market liquidity of the project.

However, such blatant market manipulation has attracted criticism from the outside world. Some community KOLs believe that DWF Labs is simply a cancer in the cryptocurrency circle, and this move will undoubtedly damage the balance of the crypto market.

Netizen @yinge133 said that although profit and loss are market behaviors and investors need to be responsible for themselves, such malicious market manipulation will definitely be caught in the stock market, and suggested that investors who suffered losses sue DWF in Singapore, the headquarters of DWF Labs. In addition, he also posted an analysis by another netizen that exposed YGG's manipulation behavior.

Key projects in investment portfolio

Since the short-term trends of YGG, DODO, and C98 are extremely similar, and there have been similar market-making projects such as CFX, LADYS, APRA, and MASK before, many institutions and investors have begun to regard it as the DWF Labs-style market-making rule, and have made investment maps of their existing layouts, as well as some currencies that have not yet risen.

After sorting out its investment portfolio, Golden Finance found that its investment amount of more than 5 million US dollars is as follows:

From the above picture, we can see that among the many projects invested by DWF Labs, there are still many currencies that have not experienced sharp rises and falls in the bear market, and liquidity needs to be improved.

The DWF Labs official website previously stated that "regardless of market conditions, DWF Labs invests in an average of 5 projects per month." Today, Andrei Grachev, executive founder of DWF Labs, said that DWF has invested in more than 250 projects.

From its investment distribution, it can be seen that DWF Labs has a diversified layout in various tracks, with key investment areas such as crypto enterprise infrastructure, DeFi, GameFi, etc.

In addition, DWF Labs also listed some of the projects it has recently invested in. These include Yield Guild Games, TON - The Open Network, Synthetix, Flare Network, Fetch-Ai, Conflux, and Coin98.

It can be seen that DWF Labs has already made markets for two of them, YGG and C98. It is just unknown whether the next currency to soar or plummet will be one of its recently invested projects.

Perhaps they are fully aware that their involvement in crypto market transactions is very likely to have a significant impact on investors’ decision-making. DWF Labs specifically states at the bottom of its official website:

DWF OPTIONS LTD is a venture capital and proprietary trading firm that provides liquidity, invests and holds derivatives positions. However, it does not manage or custody cryptocurrency assets or sovereign currencies and derivatives on behalf of third parties, investors or clients.

In addition, DWF OPTIONS LTD is not authorized, exempted or regulated by any regulatory authority. It is under regulatory review but currently does not have any license or regulatory authorization. Any counterparty who trades with DWF OPTIONS LTD will not benefit from the protection of various regulated entity programs.

Therefore, what DWF Labs wants to express is that entering the market is risky, investment should be cautious, and investors are responsible for their own profits and losses, which have nothing to do with us.

Conclusion

As an integral part of the capital market, market makers have positive functions, such as adding project liquidity, increasing market depth, handling price differences, and activating the market.

However, if an investor and market maker directly manipulates the price of a currency, ignores the laws of project development, and relies on price manipulation to reap profits from both long and short positions, then this behavior will undoubtedly undermine market confidence.