Recently, many big V have been discussing DWF. Combined with the narrative and market sentiment changes in this cycle, some interesting viewpoints have emerged. The entire Crypto market, from top to bottom, seems to be meme-ified and simplified. Is there an urgent need for a stimulant?
1. Simplification and Emotional Release
Looking at the current characteristics of this bull market, apart from the institutional bull brought by ETF approval, other areas of play are all about “simplification” and “unmasking.” In simpler terms, this bull market is pursuing the extreme of “simple and highly volatile” emotions. 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 target for storytelling and speculation, yet so far there is no sign of a second outbreak in this cycle.
Both of these reigning tracks from the previous cycle are performing poorly in this round, with many reasons contributing to this phenomenon, including innovation stagnation, loss of user confidence, and the aftermath of FTX LUNA’s collapse. To rebuild market confidence, fresh blood and time are needed, as well as a stimulant.
This is the background of this bull market, extremely unique and highly polarized.
Therefore, the dominance of meme coins in this cycle’s community is characterized by simplicity, emotional release, and high volatility, which have taken advantage of the favorable conditions.
2. Market Makers and Polarization
On the other hand, speaking of market makers, after various “elite” market makers experienced the FTX, LUNA events in the last cycle, the results were quite tragic. The era when everyone saw Three Arrows, Alameda going all-in blindly is over, and the market suddenly realized that the altar of Crypto may be even more precarious than a grassroots team. In such an environment, the controversial DWF has emerged in this cycle, known for its aggressive tactics and seems to be playing the role of a stimulant in this special era.
From the perspective of market makers, Crypto differs from traditional fields in several aspects:
– Scale: The operational scale of cryptocurrency market makers is smaller compared to traditional financial markets.
– Liquidity and volatility: Cryptocurrency markets have lower liquidity and higher volatility.
– Regulation: Regulation in the cryptocurrency market is not perfect, and the relationships between exchanges, project teams, and market makers are complex.
– Technology: Some market makers may involve blockchain or DeFi financial strategies, requiring sufficient technical support to ensure the security of their trading execution.
3. Where is the Controversy?
Traditionally, the main functions of market makers are:
(1) Providing liquidity: By continuously providing depth to buy and sell, ensuring there is always liquidity in the market, investors can buy or sell at any time.
(2) Price fluctuation and discovery: Market makers adjust bids and offers to smooth market price fluctuations and guide price discovery.
(3) Improving market efficiency: By quickly matching trades, market makers can reduce trade latency and improve market efficiency.
Therefore, we usually consider a good market maker to have strong capital strength, able to provide sufficient liquidity while smoothing price fluctuations. The style of DWF has always been to focus on high volatility and aggressive trading strategies. It is focused on market making but also invests in many projects. Therefore, DWF often sparks controversy due to its aggressive trading strategies, leading to accusations of market manipulation.
4. Giving You What You Want
In fact, DWF has emerged in an extremely controversial way – “giving you what you want,” such as $NOT, $FLOKI, $LADYS, etc., capturing the main emotions and forces of users in this cycle. In the current market environment, it seems to have taken advantage of the situation, although I myself adhere to long-termism and value investing. Doing the right thing is not about scoffing at things like memes, Ponzi schemes, or speculative assets. Value investing is not an obsession, and long-termism is not being aloof. I often see many people analyze market trends and issues very insightfully, being able to see the problems clearly is impressive, but being able to adapt to each era is what truly makes a hero.
Looking at this special bull market, DWF has emerged controversially and the future path remains unknown, but for now, it has made an impression on the market.
