Market-making projects take turns on a roller coaster ride’, ‘Notorious scam exchange’ DWF Labs faces collective condemnation from the crypto community.
Market-making projects experience volatile fluctuations, while the crypto community collectively condemns the notorious scam exchange, DWF Labs.
Author: Climber, LianGuai
In the past few days, three cryptocurrencies, YGG, DODO, and C98, have experienced similar skyrocketing and plummeting market trends after the release of DWF Labs-related funding actions. This has further confirmed the speculation that DWF Labs has engaged in market-making activities multiple times, leading to the creation of investment reference charts for projects related to DWF Labs in order to improve the accuracy of identifying the next rising cryptocurrency.
However, due to differences in investors’ levels of expertise, some have profited from the market fluctuations while others have suffered heavy losses in this short-term market trend. Some believe that DWF Labs’ blatant manipulation of the cryptocurrency market will significantly damage the reputation of the industry and potentially face stricter regulations.
So, how exactly has DWF Labs influenced the price trends of cryptocurrencies recently? Is it beneficial for institutions and qualified investors, or is it driven by long-term benefits for market-making projects? Apart from the cryptocurrencies that have already experienced significant volatility due to DWF Labs’ involvement, which other projects has it focused on?
DWF Labs’ Market-Making Strategy
Starting from August 6th, DWF Labs has released consecutive funding decision news related to YGG, DODO, and C98, causing these three cryptocurrencies to continue rising despite already experiencing some gains. Among them, YGG had the largest increase during the second phase, approaching 50%. However, all three cryptocurrencies experienced a rapid decline after a day of trading. For YGG, the maximum drop was about 70%.
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During this period of volatile price fluctuations, data shows that institutional sell-offs were the most prominent. Wintermute Trading made the most transfers to exchanges among all institutions after the short squeeze occurred. Other institutions included BITKRAFT Ventures, Sfermion, Youbi Capital, and others.
In addition to institutions, two large individual investors also profited from the rapid rise. They collectively deposited 3.57 million YGG (approximately $2.06 million) into Binance, with a whale with an address starting with 0x639B depositing 2 million YGG (approximately $1.16 million).
The most controversial DWF Labs transferred 3,649,995 YGG tokens (valued at $0.61 each, totaling approximately $2.23 million) to Binance at around 10 pm on August 6th. Earlier this year, the organization had obtained 8 million YGG tokens from the YGG treasury and had previously transferred them to Binance in two separate transactions: 700,000 tokens on February 14th (valued at approximately $0.28 each) and 3.65 million tokens on June 19th (valued at approximately $0.14 each).
Previously, DWF Labs has been criticized by the public for its “VC+ market maker” business model. With the exposure of more and more evidence, DWF Labs no longer conceals it and directly displays the sign of providing such services on its official website.
DWF Labs explicitly states that it is a global digital asset market maker and a web3 investment company involved in multi-stage project development. It is also engaged in high-frequency cryptocurrency trading and currently trades in spot and derivative markets on more than 40 top exchanges.
In order to attract more commercial clients and project parties, DWF Labs mentions in its “Market Making” business that it “will provide efficient and sustainable liquidity for our partners”. Therefore, the performance of the three currencies YGG, DODO, and C98, and even other market-making currencies, has proven the business level and service quality of DWF Labs.
The organization also mentions that DWF provides cutting-edge market-making execution capabilities to create trading volumes for projects as a service and provide healthy liquidity. Currently, they have integrated with the top 40 exchanges and trade over 800 currency pairs, including spot and derivative markets.
For the collaborating project parties, DWF states that it does not charge any entrance fees, monthly fees, trading fees, market-making cross fees, or any additional fees. In addition to providing high accessibility and 24/7/365 coverage,
through market-making, DWF claims to allow other market participants to trade project tokens with minimal price impact, thereby increasing market depth and giving investors more confidence in the market liquidity of the project.
However, such blatant market manipulation has sparked public condemnation. Some community KOLs believe that DWF Labs is a cancer in the cryptocurrency industry, and this move will undoubtedly harm the balance of the crypto market.
User @yinge133 expressed that although profit and loss are market behaviors and investors need to be responsible for themselves, malicious market manipulation like this would definitely be caught in the stock market. It is recommended that investors who have suffered losses sue DWF Labs at its headquarters in Singapore. He also posted the analysis of another netizen exposing the market manipulation of YGG.
Key Investment Projects on the Investment Map
Due to the extremely similar trends of YGG, DODO, and C98 in the short term, as well as previous projects of the same type such as CFX, LADYS, APRA, MASK, etc., many institutions and investors have started to regard them as the market-making patterns of DWF Labs and have created their investment maps, including some currencies that have not yet surged.
After sorting out its investment map, LianGuai found that the projects with investment amounts of over $5 million are as follows:
From the above figure, it can be seen that among the many projects invested by DWF Labs, there are still many currencies that have not experienced violent fluctuations under the bear market, and their liquidity needs to be increased.
Previously, the official website of DWF Labs stated, “Regardless of the market conditions, DWF Labs invests in an average of 5 projects every month.” As of today, Andrei Grachev, the founding executive of DWF Labs, said that DWF has invested in over 250 projects.
From its investment distribution, it can be seen that DWF Labs has a diversified layout in various fields, with a focus on investing in areas such as crypto enterprise infrastructure, DeFi, and GameFi.
In addition, DWF Labs lists some recently invested project names. These include Yield Guild Games, TON – The Open Network, Synthetix, Flare Network, Fetch-Ai, Conflux, and Coin98.
It can be seen that DWF Labs has already provided liquidity for two of them, YGG and C98, but it is unknown whether the next currency to experience violent fluctuations will be among its recently invested projects.
Perhaps knowing that intervening in the cryptocurrency market can have a significant impact on investors’ decision-making behavior, DWF Labs specifically states at the bottom of its official website:
DWF OPTIONS LTD is a venture capital and proprietary trading company engaged in liquidity provision, investment, and holding of derivative positions. However, it does not represent third parties or investors or clients engaged in the management or custody of crypto assets or sovereign currencies and derivatives.
In addition, DWF OPTIONS LTD is not authorized, exempted, or regulated by any regulatory authority. It is undergoing regulatory review but currently has no licenses or regulatory authorizations. Any counterparty engaging in transactions with DWF OPTIONS LTD will not benefit from the protection of various regulated entity plans.
Therefore, what DWF Labs wants to express is that there are risks in entering the market, and investment should be cautious. Investors are responsible for their own profits and losses, and we are not responsible.
As a part of the capital market, market makers have positive functions, such as adding project liquidity, increasing market depth, managing spreads, and activating the market.
However, if market makers, as both investors and manipulators, directly manipulate the token price, ignoring the development rules of the project, and rely on manipulating prices to profit from both long and short positions, this behavior will undoubtedly damage market confidence.