Market Maker DWF Labs’ More Than $200M in Deals Blur What ‘Investing’ Means

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.DwfLabs made headlines with flurry of deals in projects such as CryptoGPT__org or synthetix_io. A closer look reveals that many of their deals aren’t typical VC investments, but the firm says it’s all just a misunderstanding. Reports sndr_krisztian

But a closer examination reveals DWF, whose founders made their money as crypto high-frequency traders, isn't exactly a venture capital firm – not always, at least.

DWF Labs’ investments are more ad hoc in nature and the company primarily selects for projects that have already launched a token. It is quite common in the crypto industry for market making firms to have venture capital arms. Jump Crypto and Wintermute, two heavyweights in the crypto market-making sector, both began as trading firms. But both have since expanded into cutting venture checks for projects, and even building their own pieces of core infrastructure .

“All of their ‘investments’ are poorly disguised agency OTC trades,” a market making firm’s executive told CoinDesk, who asked not to be named due to company policy. “They make a big announcement about ‘partnerships, investments’ or some other nonsense, but in reality it is a way for token projects to sell their treasury without announcing that they are selling their treasury.

“As a market maker, of course we support our portfolio. If we invest, we will provide much more liquidity to the project compared to if we don’t invest,” Grachev said.

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