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Shadow-Pool Puppeteers: The Rise and Fall of Crypto Market Makers
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From Virtual NPC to Intelligent Agent: How does the AI-driven game world subvert reality?
I. From Tic - Tac - Toe to El Dorado: The Evolutionary Path of AI in Games1952: "OXO Tic - Tac - Toe" Opens the Door to AI - based Games The earliest intersection of AI and video games can be traced back to 1952. "OXO Tic - Tac - Toe" developed by A.S. Douglas was the first game driven by AI rules. Although this AI could only respond to preset rules, it laid the foundation for the future development of AI in games. Its static nature revealed that early AI could only passively respond, lacking...
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RWA Sector Status and Potential The RWA (Real World Assets) sector, while highly anticipated, has yet to demonstrate its potential to connect trillions of dollars in traditional market assets. According to rwa.xyz, the total market capitalization of RWA assets in the crypto industry is only $24 billion, and this is after a sharp 56% increase in the first half of this year. This indicates that the RWA narrative is not over, but rather has not yet truly begun. As US stocks move on-chain and mor...
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Who Really Moves the Market?
Cui Jian once sang, “I want everyone to see me, but no one to know who I am.”
In crypto’s dark pools, that lyric describes an entire profession: market makers.
They are the unseen hands that keep order books alive, yet their names rarely appear on-chain.
This is their story.
The Job Description
Launching a token is easy; keeping it tradeable is not.
On a DEX, you seed a liquidity pool—say, 1 M tokens vs. 100 ETH—and pray.
On a CEX, exchanges demand continuous two-sided quotes.
That’s where market makers step in.
Their mandate: post bids and asks 24/7, absorb volatility, and make a microscopic spread on every flip.
Invisible, indispensable, and—when things go wrong—infamous.
Old Guard: From Titans to Collapse
Alameda Research
Founded 2017 by Sam Bankman-Fried.
Peaked at 20 % of global BTC/ETH volume via FTX.
November 2022: customer-fund black hole, $100 B hole, bankruptcy.
Caroline Ellison’s tearful testimony: “I hurt a lot of people.”
SBF: 25 years in prison; Alameda, liquidated.
Jump Crypto
Offshoot of high-frequency giant Jump Trading.
2021: everywhere—Solana, Terra, Wormhole.
2023: SEC probe, 10 % layoffs, retreat to non-U.S. desks.
Wintermute
Evgeny Gaevoy’s algorithmic powerhouse.
2022 hack: $160 M drained, balance-sheet scarred.
Shifted from “growth-at-all-costs” to surgical, chain-agnostic quoting.
The aftermath? Global BTC 2 % depth fell from hundreds of millions to < $100 M in a single week (Kaiko).
Vacuum & Renaissance
As old kings bled, four macro currents refilled the liquidity void:
Fed pivot & 2024 halving → risk-on capital.
Trump-era “Crypto Sprint” → lighter oversight.
ETF inflows: $54.2 B into BTC ETFs, $13.6 B into ETH ETFs (SoSoValue, Aug 28 2025).
Lower tech barriers: plug-and-play SDKs, 0x APIs, Jupiter routers.
New players seized the gap.
The New Aristocracy
1. Flow Traders
Dutch ETP veteran turned crypto-native.
Q2 2025 net trading revenue: €143.4 M, up 80 % YoY.
Specialties: cross-chain, institutional-sized blocks.
Quietly helped the German government liquidate seized BTC without moving the market.
Public tokens: AVAX, LINK, DYDX, STRK, WCT, ACX, EIGEN…
On-chain capital today: ~$17 M (down from peaks).
2. GSR Markets
Hong-Kong-headquartered, New-York-engineered.
Dual licenses: U.K. FCA + Singapore MAS.
Public float: $144 M across 30+ exchanges.
Mantra: “DeFi-CeFi convergence is next.”
Notable coins: WCT, RNDR, FET, UNI, SXT, ARKM, BIGTIME, MOVE…
On-chain balance: $144 M (medium level).
3. DWF Labs
Founded 2022, front-man Andrei Grachev (ex-Huobi Russia).
Tattooed in Chinese, proud of controversy.
Model: VC + MM + incubator + marketing + OTC + KOL—all in one.
Claims 400+ investments, > $200 M deployed since 2023.
Public tokens: SOPH, YGG, IOST, MOVE, CAT, LADYS…
On-chain wallet: <$9 M—tiny compared to bravado.
Drama & Dirty Deals
1. Twitter Wars
Token2049 2023: GSR publicly snubbed DWF—“they don’t belong on the same stage as us.”
Wintermute’s Gaevoy liked the tweet; later dredged up old rumors linking Grachev to OneCoin.
Grachev shrugged: “We do what works. Critics gonna critic.”
2. The Movement Labs Fiasco
April 2025:
L2 project Movement lends 66 M MOVE tokens to “market maker” Web3Port.
Tokens secretly routed to Rentech (a Web3Port proxy).
Smart-contract clause: once MOVE hits $5 B mkt-cap, Rentech can dump for profit-share.
Price pumped to $1.45 → Rentech unloads $38 M → MOVE crashes 86 % in 48 h.
Binance freezes Web3Port’s gains; Movement rebrands to Move Industries.
TVL collapses from $166 M to $50 M (-70 %).
Lesson: hidden clauses + opaque intermediaries = investor carnage.
Fixing the Game
The industry is drafting a new playbook:
Transparent contracts – no mkt-cap triggers, public unlock schedules.
On-chain proof-of-reserves – real-time wallet dashboards.
Third-party audits – smart-contract clauses reviewed by independent code shops.
Founder firewalls – legal separation between token treasury and founders’ personal wallets.
Epilogue: 63 Known Coordinates, Countless Shadows
RootData now tracks 63 active market makers.
Their offices have no victory arches—only humming servers.
When you see a 200 BTC bid appear, vanish, reappear two ticks lower, you’re watching an algorithm breathe.
How many more hands remain unmarked in the dark forest?
For every visible coordinate, an unknown trader may still be scripting the next flash-crash—or the next stealth accumulation.
Who Really Moves the Market?
Cui Jian once sang, “I want everyone to see me, but no one to know who I am.”
In crypto’s dark pools, that lyric describes an entire profession: market makers.
They are the unseen hands that keep order books alive, yet their names rarely appear on-chain.
This is their story.
The Job Description
Launching a token is easy; keeping it tradeable is not.
On a DEX, you seed a liquidity pool—say, 1 M tokens vs. 100 ETH—and pray.
On a CEX, exchanges demand continuous two-sided quotes.
That’s where market makers step in.
Their mandate: post bids and asks 24/7, absorb volatility, and make a microscopic spread on every flip.
Invisible, indispensable, and—when things go wrong—infamous.
Old Guard: From Titans to Collapse
Alameda Research
Founded 2017 by Sam Bankman-Fried.
Peaked at 20 % of global BTC/ETH volume via FTX.
November 2022: customer-fund black hole, $100 B hole, bankruptcy.
Caroline Ellison’s tearful testimony: “I hurt a lot of people.”
SBF: 25 years in prison; Alameda, liquidated.
Jump Crypto
Offshoot of high-frequency giant Jump Trading.
2021: everywhere—Solana, Terra, Wormhole.
2023: SEC probe, 10 % layoffs, retreat to non-U.S. desks.
Wintermute
Evgeny Gaevoy’s algorithmic powerhouse.
2022 hack: $160 M drained, balance-sheet scarred.
Shifted from “growth-at-all-costs” to surgical, chain-agnostic quoting.
The aftermath? Global BTC 2 % depth fell from hundreds of millions to < $100 M in a single week (Kaiko).
Vacuum & Renaissance
As old kings bled, four macro currents refilled the liquidity void:
Fed pivot & 2024 halving → risk-on capital.
Trump-era “Crypto Sprint” → lighter oversight.
ETF inflows: $54.2 B into BTC ETFs, $13.6 B into ETH ETFs (SoSoValue, Aug 28 2025).
Lower tech barriers: plug-and-play SDKs, 0x APIs, Jupiter routers.
New players seized the gap.
The New Aristocracy
1. Flow Traders
Dutch ETP veteran turned crypto-native.
Q2 2025 net trading revenue: €143.4 M, up 80 % YoY.
Specialties: cross-chain, institutional-sized blocks.
Quietly helped the German government liquidate seized BTC without moving the market.
Public tokens: AVAX, LINK, DYDX, STRK, WCT, ACX, EIGEN…
On-chain capital today: ~$17 M (down from peaks).
2. GSR Markets
Hong-Kong-headquartered, New-York-engineered.
Dual licenses: U.K. FCA + Singapore MAS.
Public float: $144 M across 30+ exchanges.
Mantra: “DeFi-CeFi convergence is next.”
Notable coins: WCT, RNDR, FET, UNI, SXT, ARKM, BIGTIME, MOVE…
On-chain balance: $144 M (medium level).
3. DWF Labs
Founded 2022, front-man Andrei Grachev (ex-Huobi Russia).
Tattooed in Chinese, proud of controversy.
Model: VC + MM + incubator + marketing + OTC + KOL—all in one.
Claims 400+ investments, > $200 M deployed since 2023.
Public tokens: SOPH, YGG, IOST, MOVE, CAT, LADYS…
On-chain wallet: <$9 M—tiny compared to bravado.
Drama & Dirty Deals
1. Twitter Wars
Token2049 2023: GSR publicly snubbed DWF—“they don’t belong on the same stage as us.”
Wintermute’s Gaevoy liked the tweet; later dredged up old rumors linking Grachev to OneCoin.
Grachev shrugged: “We do what works. Critics gonna critic.”
2. The Movement Labs Fiasco
April 2025:
L2 project Movement lends 66 M MOVE tokens to “market maker” Web3Port.
Tokens secretly routed to Rentech (a Web3Port proxy).
Smart-contract clause: once MOVE hits $5 B mkt-cap, Rentech can dump for profit-share.
Price pumped to $1.45 → Rentech unloads $38 M → MOVE crashes 86 % in 48 h.
Binance freezes Web3Port’s gains; Movement rebrands to Move Industries.
TVL collapses from $166 M to $50 M (-70 %).
Lesson: hidden clauses + opaque intermediaries = investor carnage.
Fixing the Game
The industry is drafting a new playbook:
Transparent contracts – no mkt-cap triggers, public unlock schedules.
On-chain proof-of-reserves – real-time wallet dashboards.
Third-party audits – smart-contract clauses reviewed by independent code shops.
Founder firewalls – legal separation between token treasury and founders’ personal wallets.
Epilogue: 63 Known Coordinates, Countless Shadows
RootData now tracks 63 active market makers.
Their offices have no victory arches—only humming servers.
When you see a 200 BTC bid appear, vanish, reappear two ticks lower, you’re watching an algorithm breathe.
How many more hands remain unmarked in the dark forest?
For every visible coordinate, an unknown trader may still be scripting the next flash-crash—or the next stealth accumulation.
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