How to view the DWF controversy?

Author: @cmdefi

Recently, I've seen many influencers discussing DWF. Coupled with the narrative of this market cycle and the shift in market sentiment, I’ve discovered some interesting viewpoints. Is the entire Crypto space becoming meme-driven and simplified from top to bottom, urgently needing a shot of adrenaline?

1. Simplification and Emotional Release

From the characteristics of the current bull market, aside from the institutional bull brought by ETFs, other areas of play are undergoing "simplification" and "de-masking." To put it bluntly, the market in this bull cycle is pursuing "simplicity and high volatility" to an extreme. Specifically:

• DeFi has been labeled as overly complex, with the notion that the more complex it is, the easier it is to lose money.
• NFTs were once the highest space for storytelling and speculation, but so far in this cycle, there are no signs of a secondary explosion.

These two previous champion sectors are performing quite mediocrely this time around. There are many reasons for this phenomenon, including stagnation in innovation and loss of user confidence. After all, many people have experienced the FTX and LUNA collapses, with frequent security issues in DeFi, leaving them with a bunch of monkeys singing lonely songs. Rebuilding market confidence requires fresh blood, time, and a shot of adrenaline.

This is the backdrop for the birth of this bull market, which is extremely unique and polarized.

Thus, the community-driven characteristics of meme coins in this cycle are simple enough, emotionally expressive enough, and volatile enough, making the most of the timing, location, and people.

2. Market Makers and Polarization

On the other hand, speaking of market makers, after the various "elite" market makers faced tragic outcomes during the last cycle with events like FTX and LUNA, the era of blindly betting on Three Arrows and Alameda is over. The market suddenly realized that the Crypto pantheon might be even more makeshift than it seemed. In such an environment, the highly controversial DWF has emerged, known for its aggressive strategies, seemingly playing the role of an adrenaline shot in this special era.

From the perspective of market makers, Crypto still differs from traditional fields:

• Scale: Compared to traditional financial markets, the operational scale of cryptocurrency market makers is smaller.
• Liquidity and Volatility: The liquidity in the crypto market is lower, while volatility is higher.
• Regulation: The regulation of the crypto market is not well-established, and the relationships between exchanges, project teams, and market makers are complex.
• Technology: Some market makers may involve on-chain or DeFi financial strategies, so sufficient technical support is needed to ensure the security of their trading execution.

3. Where Are the Controversies?

Traditionally, the main functions of market makers are:

(1) Providing Liquidity: By continuously providing buy and sell depth, they ensure that there is always liquidity in the market, allowing investors to buy or sell at any time.

(2) Price Volatility and Discovery: Market makers help smooth market price fluctuations by adjusting bids and offers, while also guiding price discovery.

(3) Improving Market Efficiency: By quickly matching trades, market makers can reduce trading delays and enhance market efficiency.

Therefore, we usually consider a good market maker to have strong capital strength, capable of providing sufficient liquidity while making price fluctuations smoother. DWF's style has always been characterized by high volatility and aggressive strategies. It focuses on market making but also invests in many projects, which often leads to controversies due to its aggressive trading strategies and subsequent accusations of market manipulation.

4. Giving You What You Want

In fact, DWF has captured the main emotions and power of users in this cycle in a highly controversial way - "giving you what you want," such as $NOT, $FlOKI, $LADYS, etc. In the current market environment, it has managed to seize the timing, location, and people. Although I personally adhere to long-termism and value investing, doing the right thing does not mean dismissing anything with meme, ponzi, or speculative attributes. Value investing is not an obsession, and long-termism is not a lofty ideal. I often see many people analyzing market conditions and issues very thoroughly, which is impressive, but being able to adapt to each era is what makes a true hero.

From the perspective of the current unique bull market, DWF has emerged in a highly controversial manner. How it will proceed and where it will go remains uncertain, but it has made sure that everyone in the market remembers it.