Original author: 1912212.eth, Foresight News

As rock singer Cui Jian sang in his song "Fake Monk," "I want people to see me, but not know who I am." In the ever-changing crypto market, characters like these are common, attracting the curious gaze of countless people.

In 2017, a young man left Wall Street and used his savings to build a mining operation, read white papers, and work through the night to fine-tune algorithms. He then recruited two colleagues from Optiver, a world-renowned market maker and high-frequency trading firm: one specialized in trading structure, the other in risk management. The brutal bear market of 2018 slew many exchanges, project developers, and media outlets. During the most challenging times, with no external funding, they relied solely on their personal convictions and algorithmic models to persevere. It wasn't until the global financial markets experienced significant volatility due to the pandemic that their arbitrage algorithm earned them $120,000 overnight. A few months later, he began seamlessly arbitrage across multiple trading platforms.

A year later, the unknown team behind him had managed hundreds of millions of dollars, with countless large trades completed under the algorithms he designed. He became one of those people you can't see or know, but his presence can always be felt in the buying and selling prices.

This is Evgeny Gaevoy, the founder of Wintermute, one of the world's largest algorithmically driven crypto market makers. He lives in London and enjoys traveling to the United States. He enjoys memes and candid comments, even responding to accusations of market manipulation with a retort, "If you treat me like an imaginary enemy, don't blame me for trolling you."

So what exactly is the role of a crypto market maker?

Typically, if a project launches a token, it can list it on a decentralized exchange (DEX). The typical steps involve creating a trading pair on the DEX, such as X/ETH or X/USDT, and then injecting both assets into the initial liquidity pool—for example, 1 million X tokens and 100 ETH. However, when a project seeks to list on an exchange like Coinbase or Binance, it can't simply launch the token and expect people to trade it, as this often leads to insufficient buy and sell orders. These exchanges need to ensure liquidity. This means there must always be someone willing to buy and sell. This role is typically filled by market makers.

Compared to exchanges and crypto VCs that are often discussed in public, market makers are shrouded in mystery. They play an important role in the crypto industry, but are occasionally the driving force behind the decline in token prices, and are therefore controversial.

The old pattern collapses

A group of professional market makers have flocked into the crypto market since the last cycle.

At that time, the market was dominated by established institutions like Alameda Research, Jump Crypto, and Wintermute. These players, leveraging high-frequency algorithmic trading and vast capital, dominated the liquidity provision of CEXs. As a sister company to FTX, Alameda provided liquidity for mainstream assets like Bitcoin and Ethereum during the peak of the 2021 bull market, with its trading volume accounting for over 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, prompting CZ to sell all of its FTT. This depleted FTX's liquidity and triggered a wave of user runs. An investigation revealed that FTX had misappropriated up to $10 billion in customer funds and loaned them to Alameda for high-risk trading and to cover losses, creating a deadly cycle. FTX, Alameda, and over 130 affiliated entities filed for bankruptcy, and SBF resigned as CEO.

Looking back at its glorious past, Alameda was founded by SBF in 2017. Initially focused on crypto arbitrage and quantitative trading, it quickly rose to prominence thanks to its algorithmic advantages. After the launch of FTX in 2019, Alameda became its primary liquidity provider, helping FTX's valuation soar to $32 billion. Alameda manages tens of billions of dollars in assets, reaping lucrative profits through leveraged trading and market making during the bull market. SBF even became a crypto billionaire, promoting philanthropic and regulatory advocacy in the industry.

Caroline Ellison

The ultimate collapse stemmed from a breakdown in internal governance. Alameda partner Ellison's admission of embezzlement of client funds during a staff meeting shocked the industry. Her relationship with SBF added to the drama: in 2023, she became a key prosecutor's witness, accusing SBF of orchestrating an $8 billion fraud. She pleaded guilty to seven counts of fraud and was sentenced to two years in prison in 2024. In court, she tearfully apologized, saying, "I grieve every day for the people I've hurt."

Alameda's high leverage exposed it to market volatility, and FTX illegally borrowed client funds to fill the gap. In 2023, SBF was sentenced to 25 years in prison, and Alameda's assets were liquidated, marking its complete collapse.

The exit or contraction of established market makers is the direct cause of the vacuum period.

According to Kaiko data, a week after the FTX collapse, global crypto liquidity was halved, and Bitcoin's 2% depth fell from hundreds of millions of US dollars to less than 100 million US dollars.

In the early liquidity battlefield of the crypto market, Jump Crypto and Wintermute were once the two hottest forces.

Jump, originating from traditional high-frequency trading giant Jump Trading, leveraged its deep algorithmic expertise and capital strength to aggressively enter the crypto market in 2021, becoming ubiquitous in everything from the Solana ecosystem to the Terra stablecoin system. However, following the collapse of Terra and the subsequent 2023 investigation by the U.S. Securities and Exchange Commission (SEC), Jump Crypto scaled back its operations, exited some U.S. markets, and laid off over 10% of its staff.

Wintermute rapidly rose to prominence with its flexible algorithmic market making and OTC services, becoming one of the most influential liquidity providers in CeFi and DeFi. However, a 2022 hacking incident resulted in losses of nearly $160 million, exposing the risks of rapid expansion. Since then, Wintermute has gradually shifted to more refined operations, avoiding reckless expansion.

The trajectories of the two almost condense the entire process of crypto market makers from wild growth to prudent contraction in the past five years: from high-frequency arbitrage to ecological support, from radical risk-taking 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, amidst a period of shrinking markets and increasing caution, both macro and micro factors are driving new entrants into the market. Federal Reserve interest rate cuts in 2023-2024 will stimulate capital inflows, and after the 2024 Bitcoin halving, a market cycle will begin. A new wave of token issuance is emerging: inscriptions, restaking, meme coins, AI proxies, the stablecoin craze, RWAs, and on-chain US stocks are all hot topics. Furthermore, US spot ETFs are attracting significant capital, with impressive performance.

According to SoSoValue data, as of August 28th, Bitcoin spot ETFs had accumulated a total net inflow of $54.19 billion, while Ethereum spot ETFs had a total net inflow of $13.64 billion. A relaxed regulatory environment is also a major factor. Since taking office in January 2025, Trump has emphasized support for the responsible growth of digital assets, blockchain technology, and related technologies, and has rescinded relevant policies of the Biden administration. The order also established a Digital Assets Working Group within the National Economic Council to propose a federal regulatory framework covering market structure, oversight, consumer protection, and risk management.

In addition, the industry's technical threshold is constantly decreasing, and the needs of project parties are also changing, prompting a reshuffle in the industry.

The rise of the new elite

The significance of this vacuum is that it leaves ample room for new players. Representative players include Flow Traders, GSR's new division, and DWF Labs. Their core members come from diverse backgrounds, and their business scope covers CEX/DEX market making, OTC, and structured products.

Flow Traders

Flow Traders, a global liquidity provider originating in the Netherlands, initially gained recognition for its exchange-traded products (ETPs), but in 2023, it decisively pivoted to the crypto space, like a seasoned navigator catching the digital wave. Its team, comprised of a diverse group of quantitative trading experts and financial engineers, emphasizes a strong team-driven culture. Their headquarters in Amsterdam resembles a sophisticated laboratory, bringing together elite talent from Wall Street and Silicon Valley.

Thomas Spitz

In July 2025, Flow Traders appointed its new CEO, Thomas Spitz. This former executive boasts a distinguished career spanning over 20 years at Crédit Agricole CIB, where he held various senior roles and possesses extensive experience managing international teams and leading cross-cultural initiatives. He spearheaded the development of AllUnity, the MiCAR-compliant stablecoin, and collaborated with DWS and Galaxy Digital to reshape the tokenized asset landscape.

In the second quarter of 2025, its net trading revenue reached €143.4 million, an 80% year-over-year increase. Flow Traders excels in cross-chain and institutional-grade market making, providing continuous liquidity. Currently, third-party data monitoring shows tokens including AVAX, LINK, DYDX, GRT, STRK, PROVE, WCT, PARTI, ACX, and EIGEN. Notably, in mid-2024, Flow Traders helped the German government smoothly dispose of confiscated BTC, preventing significant declines in the secondary market.

Flow Traders uses its own funds and algorithmic profits to expand, while GSR obtains part of its funds through investments from VCs such as Pantera Capital.

Monitoring data shows that its current market-making funds are US$16.94 million, and its fund balance has fallen back to the bottom of the historical range.

GSR Markets

GSR Markets is a Hong Kong-based algorithmic digital trading firm. It leverages its proprietary software to provide order execution solutions across several digital asset classes, thereby providing liquidity. Its diverse team, comprised primarily of former hedge fund traders and blockchain engineers, leverages global talent across offices in New York and London to provide institutional-grade market making, over-the-counter (OTC) trading, and risk management. GSR's market making capabilities are characterized by sophisticated risk hedging and global connectivity. They connect with dozens of exchanges, providing two-way liquidity for both buyers and sellers, and excel at high-frequency algorithms to manage volatility.

In 2023, GSR scaled back US trading to avoid regulatory scrutiny, and the CFO and other senior executives resigned. In 2024, GSR transitioned from a purely trading company to an ecosystem partner. At the Consensus Summit in 2025, partner Josh Riezman stated, "DeFi and CeFi integration is the future, and we are preparing for the next phase."

Riezman once used his own server to mine Ethereum to accumulate his first pot of gold. His past resume is impressive. He has worked for several years in traditional and Crypto companies such as Deutsche Bank, Societe Generale, and Circle. Under his leadership, GSR also became the first crypto liquidity provider in the industry to obtain licenses from both the UK FCA (Financial Conduct Authority) and Singapore MAS (Monetary Authority of Singapore).

Josh Riezman

According to public information, GSR markets for altcoins including WCT, RNDR, FET, UNI, SXT, SPK, RSC, GALA, HFT, PRIME, ARKM, BIGTIME, USUAL, MOVE, BAN, TAI, PUFFER, ZRO, IINCH, ENA, and WLD. A careful observation reveals that among some of the altcoins listed on Binance, GSR markets for these currencies often experience a period of price appreciation after listing, rather than a sudden drop.

According to Arkham data, the current market-making funds in its public address are $143.76 million. Its primary market-making exchange is Binance. Fund balances remain at a moderate level.

DWF Labs

DWF Labs was founded in 2022. Managing Partner Andrei Grachev comes from a traditional trading background and was previously the head of Huobi Russia. He entered the logistics industry at 18, then began trading in traditional markets in 2014. He later transitioned to e-commerce, and his crypto journey began when he profited from the rise of ETH from $7 to $350.

He has five Chinese tattoos, and he's proud of the controversy surrounding DWF under his leadership. Furthermore, DWF wears multiple hats, encompassing VC, OTC, incubator, ecosystem, fundraiser, event brand, TVL provider, DeFi taker, advisor, coin listing agent, HR, PR/marketing firm, KOL, RFQ (Request for Quote) platform, and more.

From 2023 to 2025, more than 400 projects will be invested with a total amount of more than US$200 million.

DWF primarily targets East Asian projects and various new and existing sentiment-themed assets for market making. Publicly available information reveals that DWF markets for altcoins including SOPH, MANTA, YGG, IOST, JST, MOVE, CAT, MONKEY, ID, XAI, and LADYS. Interestingly, DWF Labs' official market maker address currently has less than $9 million in funds.

Many emerging players have secured backing from Web 3 venture capital or expanded through trading profits. DWF Labs' own capital snowballed, becoming the most active investor in 2023-2024. By 2025, its "venture capital + market making + incubation" model had covered multiple narrative sectors. These funding sources allowed emerging players to rapidly deploy capital during this period of underdevelopment. For example, DWF Labs invested its own capital in AI and RWA projects in 2024, creating a significant snowball effect.

More flexible token-incentivized protocol partnership models are common, some directly combining investment and market making. For example, DWF Labs provided stablecoin support for Falcon Finance in 2025, achieving annual returns of 12-19%, but sparked controversy surrounding bad debt. GSR aggregates liquidity through the 0x API, helping projects achieve efficient trading on the Ethereum mainnet. Jupiter Aggregator routes optimal paths on Solana, and emerging companies like Flow Traders are leveraging it to lower technical barriers to entry. These innovations allow emerging players to stand out in a fragmented market, contrasting with established centralized models.

dispute

The rise of market makers is always accompanied by controversy. The fastest and most controversial rise in this cycle has to be DWF Labs.

During the Token 2049 Forum held in September 2023, its co-founder Andrei Grachev tweeted after the "Web 3 Connect" meeting to express his gratitude for the invitation. Unexpectedly, market maker GSR angrily responded on Twitter that DWF Labs was not qualified to sit with the participants of this forum: market maker GSR, Wintermute, and OKX, which was an insult to them.

GSR stated that it was deeply saddened that, at the end of 2023, bad actors like DWF Labs could still garner so much attention. Evgeny Gaevoy, CEO of another market maker, Wintermute, liked the tweet. Even more interesting, the event photos shared by market maker GSR abruptly removed Andrei Grachev. Evgeny posted a tweet exposing Andrei Grachev, delving into his extensive past and alleged involvement with OneCoin, the infamous and largest scam in crypto history. However, Evgeny primarily commented on the article's summary of DWF Labs' poor investment performance, calling it "the wrong market maker."

Andrei, in an interview with Foresight News, said he was unconcerned with the criticism and complaints. "As long as we operate within the correct and legal scope, if a method is proven to be effective, we will adopt it. We don't worry about what others say, nor are we afraid of criticism or complaints from competitors."

This was just one of the minor incidents of conflict between market makers. The collusion between market makers and project owners caused an uproar among investors.

At the end of April 2025, the second-layer project Movement hired Web 3 Port as its official market maker and loaned them 66 million MOVE tokens to provide liquidity. However, in practice, these tokens were reportedly transferred to an entity called Rentech, which was confirmed to be an agent or shadow company for Web 3 Port. This transfer may have involved internal fraud or knowing execution: the contract stated that once MOVE's market capitalization reached $5 billion, Rentech would be entitled to a share of the profits from the sale of tokens. This incentivized price manipulation.

After the MOVE token officially launched, Rentech quickly manipulated its price to reach the $5 billion market cap threshold, then dumped $38 million worth of tokens the following day (approximately 5% of the total supply). This sell-off directly caused MOVE's price to plummet: from its initial high of $1.45, it plummeted 86%, a single-day drop of 20-30%, wiping out billions of dollars in market capitalization. Once this behavior became public, 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 claims to have been "deceived," but contract details reveal the involvement of undisclosed intermediaries and consultants.

Finally, Movement Labs terminated Manche’s co-founder position and rebranded as Move Industries. Binance also froze the market maker’s earnings and banned it from making markets on Binance.

However, the negative impact it caused is irreversible. The price of MOVE has plummeted more than 10 times from its peak, and most investors have suffered heavy losses.

According to defiLlama data, its TVL has also plummeted from a high of US$166 million to US$50 million, a drop of more than 300%.

This typical negative incident exposed the collusion between the project party and the market maker.

This has also prompted the entire industry to reflect on the underlying issues. Regarding contracts and incentive mechanisms, market maker agreements should avoid manipulative incentives such as market capitalization thresholds, and should clearly define buyback obligations and transparent audits. The Movement case demonstrates that secretive intermediaries can easily lead to fraud. Regarding transparency, projects should disclose market maker details, token transfer records, and commitment execution (such as buybacks). Delayed airdrops and unfulfilled promises can exacerbate trust issues and lead to community erosion.

Emerging projects also need to strengthen internal oversight to prevent founders from being involved in questionable transactions. Leadership integrity is crucial to a project's survival. If token issuance is solely for the purpose of allowing retail investors to exit liquidity, the end result will be mutually detrimental.

summary

As the spotlight shines on the crypto world's trading floors, the giants who truly control the flow of liquidity often remain hidden amidst the deluge of data. Market makers, the "dark pool operators" of the digital financial world, would rather let their code flow silently on-chain than reveal their names publicly. Among the 63 active coordinates recently captured by RootData, the trading volume of the top players alone is enough to sway the market, while many more, such as Web 3 Port, Kronos Research, and B2C2, are using algorithms to weave a web of liquidity worth trillions of dollars.

Their offices offer no triumphal arches, only a relentless flow of orders. Their names rarely make headlines, yet they can instantly freeze or simmer the market for certain tokens. When you trace the traces of a mysterious large order on-chain, you might be stepping on a "liquidity trap" meticulously designed by a shadowy market maker—and all of this is merely the surface ripples of their vast strategic matrix.

Now, 63 known coordinates have been illuminated, but how many pairs of unmarked eyes are there in the dark forest?"