Lightspeed The Truth Behind Crypto Market Makers | Matt Jobbé-Duval
9 snips
Jul 22, 2025 Matt Jobbé-Duval, Co-founder and CEO of CoinWatch, dives into the intricate world of crypto market making. He clarifies the differences between traditional finance and crypto structures. The discussion reveals how market maker deals are crafted and the challenges of pricing during token launches. Matt also highlights the need for transparency in market making and shares insights from Solana's ICO experience. Tune in for valuable perspectives on managing volatility, risk, and the ethical dilemmas in the rapidly evolving crypto landscape.
AI Snips
Chapters
Transcript
Episode notes
Crypto and TradFi Market Making Compared
- Market making in crypto mirrors TradFi, involving providing simultaneous bid and ask to facilitate liquidity.
- It centers on placing bids and offers close to the mid price, helping buyers and sellers transact efficiently.
Crypto Volatility Challenges Market Makers
- Crypto tokens exhibit far higher volatility than equities, complicating profitable market making.
- Their trending nature (non-mean reverting) means market makers face sustained directional risk, unlike in traditional markets.
Embedded Call Options in Deals
- Market maker deals often include embedded call options protecting market makers from adverse price moves.
- This structure allows market makers to sell tokens as prices rise and buy back at a fixed strike, aligning incentives with protocol success.