Why Market Makers Like DWF Labs Are Crypto’s True King Makers
That market makers play an indispensable role in maintaining the health of the crypto market is inarguable. But like an invisible hand guiding affairs, they tend to surrender credit to the exchange platforms that soak up traders’ action.
At their core, market makers like Blue Sky Capital, Wintermute and DWF Labs supply liquidity to exchanges and protocols, consistently providing both bid and ask prices for assets to ensure there’s always a counterparty available for transactions. The best of the bunch do even more though, from bootstrapping promising web3 startups and mining cryptocurrency to validating transitions and supporting token listing efforts.
A Sea of Liquidity
By constantly updating bid and ask prices, market makers help to establish fair and accurate asset valuations, improving price discovery and reducing spreads to make investors’ lives easier. Their provision of deep liquidity also helps to limit savage price swings, which nonetheless still occur in crypto more often than in TradFi.
While deep-pocketed web3 VCs are often heralded as the kingmakers of crypto, the companies that can make or break projects, market makers are more deserving of the title. After all, they are the ones responsible for establishing the initial liquidity and trading volume of new token ventures, ensuring assets can be traded smoothly. Without their support, many projects would be dead in the water.
Being a successful crypto market maker requires a unique blend of capabilities, beyond the ability to deploy capital across multiple assets and exchanges. They must also navigate the crypto landscape while staying profitable. As mentioned, some go the extra mile , whether by providing hands-on guidance to certain projects or helping create sustainable ecosystems that generate long-term value for the whole industry.
A Closer Look at a Leading Market Maker
Singapore-based DWF Labs exemplifies what it means to be a leading web3 market maker. One of the world’s biggest high-frequency cryptocurrency trading entities, it has established itself as a bellwether of liquidity provision since launching in 2022, trading on over 60 top exchanges in both spot and derivatives markets and supporting close to a third of CoinMarketCap’s Top 1000 projects. The company also boasts an extensive network of over 700 trusted partners, including CEXs, DEXs, blockchains, liquidity infrastructures, and protocols.
DWF Labs’ commitment to the broader crypto ecosystem is illustrated through the various initiatives it supports. For example, it is a partner of the Dubai Multi Commodities Centre (DMCC), through which it helps finance crypto startups based in the MENA region. Following the implosion of the FTX exchange, it also stepped up to the plate to provide $15 million for a Web3 Industry Recovery Initiative led by Binance Labs.
The market maker’s bonafides were given a touch of gloss earlier this year, when it scooped the Best Liquidity Provider award at the 2024 Blockchain Life Awards in Dubai. Among recent endeavors, it played a critical role in supporting Orderly Network’s omnichain liquidity infrastructure with – what else? – liquidity.
With the industry’s continued evolution, and its legitimation in the eyes of TradFi after the arrival of spot Bitcoin ETFs earlier this year, the role of market makers like DWF Labs will become even more critical as time goes on. Particularly as more complex DeFi protocols (DePINs, for example) and L2 solutions come online. While the cost of engaging a market maker isn’t cheap, the upsides are obvious for projects looking to establish a foothold in the market.
Needless to say, the contribution of these crypto king makers to market stability will be a driving force propelling us towards the next phase of web3 adoption and innovation.
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