Proposal: Market Making Proposal from Wintermute Trading

This proposal is published for presenting the terms of MKR and DAI market-making services to the
Maker community and approving it:

  • Authorize Wintermute Trading as official MKR and DAI market-maker
  • Transfer 10000 MKR from the treasury for market-making purposes as a loan to the Wintermute Trading. Wintermute Trading will have to return either the full loan amount or 100 million USDC (~400% premium to current price) in 1 year
  • Wintermute will commit to maintain inventory and liquidity in MKR and DAI across all major centralised and decentralised exchanges.

Wintermute basic background
Wintermute was founded in July 2017 by three Optiver veterans. Evgeny Gaevoy, founder
and CEO, was previously head of ETFs (screen and OTC) at Optiver Europe, one of the
largest ETF market making desks.
Wintermute’s trading volume in 2H 2020 surpassed $70B and their average daily trading
volumes in 2021 are over $3B
Wintermute is backed by Lightspeed Venture Partners, Pantera, Ventures
and others
Wintermute Trading is registered with FCA for our OTC business

Wintermute Defi and Maker specific background
Wintermute believes defi is the future of financial industry and Maker will be one of the pillars of new age. Wintermute wants to lead adoption by committing a significant part of it’s resources and at the same time getting exposure to leading teams by becoming the official MM in protocol tokens or direct investments, examples of recent work in that direction:

  • Designated MM for major defi projects like Polygon, Indexed, Skale, dydx exchange,
  • Working with Paxos on de-risking Maker PSM collateral by depositing 500mil USDP
  • actively supporting MKR and DAI trading on dex and cex for over two years
  • integrated our trading system with Maker and PSM in order to keep DAI peg

Specifically for Maker community Wintermute commits to:

  • Provide liquid markets for MKR and DAI across centralised exchanges*
  • Support MKR and DAI liquidity on ethereum and other L2s via trading against the pool or directly LP-ing where necessary
  • fund the other side of the pair with its own capital. If an exchange requires GBP, Euro, BTC, USDC, etc. to settle a trade, Wintermute will be able to provide it.
  • Provide OTC services for large MKR trades - this would give best execution for potential buyers and also protect the price of the token for sellers as well
  • Use MKR tokens received for a purpose of market making only. Wintermute would never lend, yield-farm or use those for voting.

*comprising of: Binance, Huobi, OKEX, Coinbase, Kraken, Gemini,, binanceus and a few smaller ones

EDIT 28th of October - Call option strike price have been raised to $10k per MKR which means much better terms for Maker community and to show our commitment.


Question that is a bit in the weeds:

Who would be the counterparty to Wintermute on this loan? Presumably we would need to create a new entity, provide it the MKR, and then have the agreement between Wintermute and that LendCo?

Does provisioning a MM have any legal implications about being the issuer of that asset in major jurisdictions? Or can anyone with a bucket of MKR do this?



Thanks for creating this forum post.

Would you say Wintermute has a leg-up on MMs like Jane Street when it comes to crypto MM? If so, how do you maintain that “leg-up” and what are the key benefits that your experience in both MM and the fact you have a head-start in crypto brings to market making MKR tokens?

With regards to MM in DEXes ( I personally wish you offered this to the community), any chances you can MM in both DAI and MKR on DEXes like Serum, or Osmosis(Cosmos) via a wrapped token in the near future?

Do you think there’s any downside to MM in CEXes exposed to China’s recent crackdown of crypto and CEXes like Huobi, OKEX, cutting back on such? Or, do you think the fact they are also domiciled in other countries like S. Korea and Singapore is sufficient for the exposure to these centralized exchanges?

EDIT: BTW, will you be providing Market DATA to Maker – perhaps to the Oracles Team? Similar to what Jane/Jump trading do for PYTH.

This proposal seems like a non-starter to me. A 10000 MKR unsecured loan? Is this a joke?

Maker can easily improve MKR liquidity itself,

I might even volunteer to code this up.


You’re going to run a Bot on Coinbase Pro? :wink:

Actually–kid you not–the founders of PsyOptions used to run a Bot on both CB Pro and Binance–said it was so hard to compete with other MM bots. They gave up and got FT jobs at some trading desk

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What problem is Wintermute trying to solve here? Do we really care about keeping MKR extremely liquid on centralized exchanges? Why hasn’t this been a priority for years? What changed?

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I would add that both MKR and Dai liquidity are actually quite improved compared to the past despite having no liquidity incentive. Wintermute does have a good reputation but I do wonder whether MM is really required. For better or worse, MKR and Dai demand and usage came mainly from DeFi and DEX, so liquidity on CEX was not a critical matter.


Wintermute is a crypto native trading firm. This means there is no traditional arm like the Jane Streets, Flows, Jumps, etc. of the world where we have to “answer to”. We are 100% focused on digital assets and set up to provide a fair, efficient, and liquid market place. Again, we have a designated Defi team whom have spent years building our backend infrastructure - not sure there is any other firm that can compare.

I want to touch base on some points that were brought up and somethings I missed during my talk.

We are in the process of integrating with Solana. What this means is that we can start market making and providing liquidity on protocols on top of Solana once this is completed. Like so many other projects (Polygon, dydx exchange, etc.), we are/were immensely important to scaling up adoption as liquidity will always be important and necessary.

Wintermute will fund the other side of the MKR token leg with its own capital. This is Wintermute’s cost. All the pairs, ETH, DAI, USDT, GBP, EURO, etc. that trade across cefi/defi will be Wintermute’s responsibility.

As easy as aiding in price discover across different venues sounds, I welcome anyone and everyone to try - banking partnerships, exchange partnerships, algorithmic bots, capital expenditure on each venue, etc., etc., etc.

One last thing about liquidity. Seems like not all are sold on having “too much” liquidity. If your perception is this will suppress the price, obviously this would be mirrored on the way down. Also, there’s no way any market maker or any asset in this space can have too much liquidity - we’re talking about cryptos right now…


Thank you for the questions, will try to address everything mentioned so far:

PaperImperium - we had prior experience of signing MM agreement between Wintermute and DAO directly and DAO treasury releasing token loan to Wintermute multisig. Not sure if that means any complications on Maker DAO side, but we have had it working with no issues before. Alternatively can always go via separate legal entity funded by Maker DAO.
On the second question regarding legal implications of provisioning MM, we did not hear about such cases before, hard to answer really, but I think those decisions are taken based on a token, not based on whome you send a token to.

ElProgreso - our advantage is that we focus on crypto trading exclusively, including defining-native integrations. More traditional market makers don’t really go that deep into this new financial industry, definitely not deep enough to trade or LP on dex as we do.
MMing on Chinese CEXes definitely has an increased risk, but we handle it internally in multiple ways.
We are open to providing Market DATA to Maker, but this would be a separate discussion I think.

Joshua Pritikin - the problem Wintermute is trying to solve is providing liquidity on DEX and CEX for MKR and DAI. Before this was taken care by Maker Foundation having MM agreements with market makers, but now, that Maker Foundation has been dissolved, this is no longer the case and would have to be handled by Maker DAO. Existing liquidity did not appear out of nowhere, it was provided by previous market makers. There is obviously a natural growth and there are independent traders LPing on dexes as well as trading on cefi, but they rarely can provide guaranteed liquidity if market makers stop providing services.

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Adding to this, there is an increasing demand from CEX for coins to keep a “healthy volume”, if not they are going to be delisted, exactly the same as we are doing for Vaults.
Although we are all in into DEFI, keeping high profile CEXs with DAI and MKR is something that we must work on.


Can you elaborate upon this? Did the Foundation have an agreement with Wintermute? Or any other MMs you are specifically aware of?

If so, does that mean MKR is currently without any MMs being loaned MKR?


Could you (or anyone) help me understand why this is important (specifically for MKR, I understand the reasons for DAI.)


Being on multiple venues is advantageous as there is more adoption. The outreach to other users/investors etc. that normally wouldn’t be on a specifically venue (whether its cefi or defi) is extremely important. Think about only being able to have exposure to only certain parts of the world, crypto community, institutions, etc.

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For average investors, usually, liquidity is a proxy for reputation

Some counterpoints:

We aren’t really looking for average users to ‘adopt’ MKR. This is true for DAI, but not MKR. We primarily want people to use it to govern the protocol. Investors in MKR that do not help to govern the protocol are free-riding on those who do. From a governance PoV, any MM efforts should target the subset of users that may be interested in and capable of governing the protocol.

I’d suggest that these people are primarily found on / have access to decentralized exchanges versus centralized exchanges.

Our goal with MKR is to get it into the hands of as many people who are interested in governing the Maker Protocol as possible. A working knowledge of crypto is required for this (even just to setup delegation.) We’re perhaps having trouble with terminology here, but I’m not sure that we should be targeting ‘average investors’ with MKR.


I understand this. Just my opinion, but I still don’t want to close the doors to exposing “average” people to MKR. Being able to trade/invest MKR would lead to education and awareness. New peeps have to start somewhere, and that might cascade to participation, etc. Again, just my opinion.

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It’s a fair point, and the best argument in favour of proceeding from my PoV.

why you narrow the holding of MKR to only governance participation?
I believe that participating in governance is the last step of kinda long Starway, and it begins with easy and liquid access to the token.

Hello all, John from Maker Foundation Legal here. Wintermute would have no basis for knowledge of and have inaccurately stated that the Maker Foundation had agreements with MM to provide liquidity on exchanges. That is not correct. The Foundation takes no position on this discussion, as it continues its dissolution process, but we do want to clarify factual errors. Thanks.


Because that is its fundamental purpose at this point in the project - the minting and burning aspects exist to incentivise the effective governance of the Maker Protocol, though the mint functionality does have a nice side-effect in that it acts as lender of last resort.

Initially MKR was also required for raising funds to support the development of the protocol, given the protocol is now more or less self-sustaining, that purpose is mostly gone.

As I said above, the point that owning MKR might lead to holders becoming active in governance is an argument in favour. Easy and liquid access to the token is useful in that it potentially results in more governance participants.

My point is more that we should understand that the goal is increasing the number and spread of token holders that are willing to govern the protocol, rather than liquidity being an end of itself.