The Big Brain Podcast

Breaking down crypto's biggest ever liquidation event with Wintermute founder Evgeny Gaevoy

Oct 14, 2025
Evgeny Gaevoy, Founder and CEO of Wintermute, dives into the recent crypto market turmoil, explaining how extreme leverage and forced liquidations caused chaos on October 10th. He details the mechanics of ADL and how it impacted traders, while discussing the potential of circuit breakers to mitigate future risks. Evgeny also analyzes why major cryptocurrencies like BTC and ETH showed resilience, and shares insights on how market makers adapt to constant volatility. His reflections on Wintermute's role in this landscape highlight both challenges and opportunities.
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INSIGHT

Macro News Triggered A Historic Cascade

  • The October 10 crash started from macro news that triggered the largest-ever liquidation cascade across crypto.
  • Extreme leverage plus unusual market conditions amplified a rare, disorderly meltdown.
INSIGHT

More Perpetuals Raised Systemic Fragility

  • Markets now have many more perpetuals and tokens, increasing systemic leverage and fragility.
  • During crashes exchanges and market makers couldn't move inventory, removing normal liquidity provision.
INSIGHT

ADL Can Create Sudden, Unhedgeable Exposure

  • ADL can flip a market maker from delta-neutral to suddenly long spot, forcing urgent, costly hedges.
  • ADL executed at nonsensical prices caused immediate, unavoidable losses for liquidity providers.
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