4 of the Leading Market-Makers Boosting Crypto Liquidity on CEX and DEX

Every established crypto trader knows about market makers. Companies like DWF Labs, Wintermute, and Cumberland are household names – at least in crypto households. But it’s one thing to be aware of their existence. It’s another to understand exactly what they do besides it having something to do with liquidity.

Who hires market makers? What exactly do they do? And is their role a neutral one? We’ll attempt to address all these questions and more as we examine four of the leading market makers that are currently active across the crypto landscape. As a close examination of each one shows, they all do the same task, but each does so in their distinct way.

DWF Labs

DWF Labs has been market-making for what feels like forever, and over the years, has worked with just about anyone who’s anyone in crypto. Large caps; mid caps; low caps, you name it, DWF has been enlisted to turn on the liquidity tap. This is a task that DWF Labs undertakes with gusto across the 60+ CEXs and DEXs where it has a presence. Which is of course one of the reasons why it’s desirable to partner with a market maker with a finger in many pies: their liquidity’s already there and they can activate it in minutes to keep your new token ticking over.

While some market makers limit their services to major cryptos, DWF is happy to support the long tail of crypto assets. It’s picked up a lot of business catering to Solana and BNB Chain memecoin projects, for example, that rapidly gain traction and with it, trading volume. While DWF Labs works with these emerging projects – and in some cases invests in them through its venture arm – it also turns on the liquidity for mature projects, its proprietary algos meeting bids and asks to keep volume ticking over.

Wintermute

“Harnessing chaos in digital asset markets” is Wintermute’s slogan, and by that, it means providing the liquidity to dampen the inherent volatility as far as possible. It’s a major player that, despite occasionally courting controversy, is relied on by a sizable tranche of token projects, both on CEX and DEX. Indeed, the numbers speak for themselves: Wintermute is responsible for daily trading volume of an impressive $15B, which covers the 65 trading venues where it has liquidity.

Wintermute enables clients to track their liquidity and token performance via a single dashboard. This makes it easy to gauge performance and identify areas that require additional attention. In addition to operating across the DeFi landscape, Wintermute provides market-making for institutions, supporting OTC trades. Its specialities include helping to mitigate market impact during major token launches and unlocks. With its broad range of complementary services and many years in the space, Wintermute is a seasoned head that knows the market making game inside out.

Cumberland

Cumberland is part of DRW Trading, and it’s a well-rated market maker, particularly in institutional circles. Its services are typically brought to bear in providing market-making for established crypto assets, including stablecoins. This it does for spot and futures markets alike. Having been established since 2014, Cumberland has the experience and connections to take the strain out of market-making on behalf of its clients. It’s often relied on by exchanges, particularly trading venues that are just getting started or looking to expand into new trading verticals such as futures. 

It has long been recognized that deeper liquidity is the key to bringing more institutional players into the digital asset space. Cumberland is leading the charge here, providing the liquidity that well-funded players require to thrive. While not generally catering to smaller projects, such as memecoins and DeFi startups, Cumberland is a good market maker to partner with if you’re requiring serious amounts of liquidity from a firm that has the ability to deliver it rapidly and reliably.

GSR

GSR is a capable market maker that boasts more than 60 exchange integrations. It provides clear spread and order book KPIs, ensuring that clients know exactly what they’re getting and can measure performance benchmarks. It also provides daily market reports for the benefit of its clients. GSR’s market-making services help to reduce slippage while reducing order book depth. This, in turn, results in fairer price discovery, ensuring that whales don’t unduly move markets.

With a presence on both centralized and decentralized exchanges, GSR is as comfortable working on small DEXs as it is on Tier-1 CEXs. Its proprietary algorithms oversee its market-making, ensuring that bid-ask spreads are tight and that traders can be matched. Having been providing market-making services for more than a decade, GSR knows the industry inside out, with its core business complemented by OTC trading and derivatives.

Choose Your Market Maker

With the crypto space now larger and more liquid than ever, it nevertheless remains dependent upon market makers, particularly when it comes to token launches, new networks, and new exchanges. At this critical stage in their life cycle, market makers play a vital role in keeping volatility reined in and pricing as tightly as possible. While it can be hard to visualize the work that market makers do, in cases where their liquidity is withdrawn, it becomes quickly evident why they’re so important.

Every time you make a trade, be it on a leading CEX or tiny DEX, there’s a good chance there’s a market maker behind the scenes matching your order. The four market makers profiled here aren’t the only companies offering this essential service, but they’re among the largest and most highly rated for good reason. Thanks to their liquidity, the crypto markets are, if not entirely calm, much smoother waters to navigate.

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