How do you view the DWF controversy?

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Original author: @cmdefi

Recently I have seen many big names talking about DWF. Combining this round of cyclical narratives and the shift in market sentiment, I have discovered some interesting viewpoints. Is the entire Crypto being meme-ized and simplified from top to bottom, and is it in urgent need of a shot of stimulant?

1. De-complication and emotional release

Judging from the characteristics of this round of bull market, in addition to the institutional bull market brought about by the passage of ETFs, the gameplay in other fields is de-complexification and de-disguise. To put it simply and crudely, the sentiment of pursuing simple and high volatility in this round of bull market has reached its extreme. Specifically,

  • DeFi has been labeled as being too complicated, and the more complicated it is, the easier it is to lose money.

  • NFT used to be the highest target in the storytelling and pie-in-the-sky space, but so far there is not even a sign of a second outbreak in this round.

The performance of these two king tracks in the previous cycle is very average in this round. There are many reasons for this phenomenon, including the stagnation of innovation and the loss of user confidence. After all, many people have experienced the collapse of FTX LUNA and the frequent security issues of DeFi. They are left with a bunch of monkeys singing alone. Rebuilding market confidence requires fresh blood, time, and a shot of stimulant.

This is the background for the birth of this round of bull market, which is extremely special and very polarized.

Therefore, this round of meme coins is community-driven, simple enough, expressive enough, and volatile enough. These characteristics have the best timing, location, and people.

2. Market Makers and Polarization

On the other hand, speaking of market makers, after the events of FTX, LUNA, etc., the results of various elite market makers in the last cycle were also very tragic. The era when everyone saw San Arrows and Alameda and went all-in without thinking has passed. The market suddenly discovered that the altar of Crypto may be even more rudimentary than the rudimentary team. In such an environment, the controversial DWF came out in this round. DWF, which is known for only taking strong measures, seems to be playing the role of a stimulant in this special era.

From the perspective of market makers, Crypto is different from traditional fields:

  • Scale: Crypto market makers operate on a smaller scale compared to traditional financial markets.

  • Liquidity and Volatility: Crypto markets have low liquidity and high volatility.

  • Regulation: Crypto market regulation is not perfect, and the relationship between exchanges, project teams, and market makers is complex.

  • Technology: Some market makers may be involved in some on-chain or DeFi financial strategies, so they need to have sufficient technical support to support the security of their transaction execution.

3. What is the point of dispute?

Traditionally, the main functions of market makers are:

(1) Providing liquidity: By continuously providing buying and selling depth, we ensure that there is always liquidity in the market and investors can buy or sell at any time.

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

(3) Improve market efficiency: By matching transactions quickly, market makers can reduce transaction delays and improve market efficiency.

Therefore, we usually think that a good market maker has strong capital strength, can provide sufficient liquidity and make price fluctuations smoother. However, DWFs style has always been characterized by high volatility and drastic measures. It focuses on market making but also invests in many projects. Therefore, DWF often causes controversy due to its aggressive trading strategies and is accused of market manipulation.

4. Give you what you want

In fact, DWF has captured the main emotions and power of users in this cycle in a very controversial way – give you what you want, such as $NOT $FlOKI $LADYS, etc. In the current market environment, it has taken advantage of the right time, place and people. Although I am also a person who insists on long-termism and value investment, in fact, doing the right thing is not to sneer at anything like meme, ponzi or speculative attributes. Value investment is not an obsession, and long-termism is not condescending. I often see many people who have a very thorough analysis of market conditions and problems. It is great to be able to see the problem clearly, but the real hero is to be able to adapt to every era.

Judging from the current special bull market, DWF emerged in a very controversial way. No one knows how or where it will go in the future, but now it has been remembered by everyone in the market.

How do you view the DWF controversy?

This article is sourced from the internet: How do you view the DWF controversy?

Related: Pantera: Why is TON our top holding?

Original article by: Dan Morehead, founder of Pantera Capital, and Ryan Barney, partner Compiled by: Odaily Planet Daily Azuma Editors note: This article is from the 100th article of Pantera Capitals market commentary column Blockchain Letter, which mainly excerpts the analysis of TON. The statement about the number one heavy position comes from Pantera Capital founder Dan Morehead. Dan mentioned that he had recently had lunch with Telegram founder Pavel Durov, and Pantera recently made the largest investment in Telegrams TON blockchain project in the funds history. Apart from this, most of the rest of the article was written by Pantera Capital partner Ryan Barney. Why did Pantera choose TON? (Dan Morehead) Throughout my career, I have been on the lookout for great investments. I am passionate about Bitcoin and…

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