Unchained The Chopping Block: Can Crypto Clean Itself Up? Market Structure, Trust, and Regulation - Ep. 833
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May 10, 2025 Evgeny Gaevoy, Founder and CEO of Wintermute, dives into the complex world of crypto market making, exposing the dark side of a recent $38M token dump. He discusses the blurred lines between providing liquidity and manipulative profit-sharing, revealing why VCs turned a blind eye. With insights on the necessity for transparency and the challenges of navigating market integrity, Evgeny also highlights the urgent need for better disclosure standards in the crypto space, raising critical questions about investor trust and the future of regulation.
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Shady Market Making Incentives
- Movement Labs' deal with Web3Port was structured for shared profit from token dumps above a $5 billion valuation.
- This created a strong, unusual incentive for market makers and the foundation to push the token price up then dump for profit.
Uncommon but Exists in Chaos
- This shady and profit-sharing kind of market making agreements are very uncommon among reputable protocols.
- Many small or obscure tokens on lesser exchanges likely experience this type of manipulative setup.
Disclose Market Making Agreements
- Industry should mandate public disclosure of market-making agreements including loan sizes and strike prices.
- Transparency builds trust and prevents token price manipulation, helping protect retail investors.