Source: Wintermute Founder and CEO Evgeny Gaevoy
Translation: Azuma, Odaily Planet Daily
This article is a personal piece written by Evgeny Gaevoy, the founder and CEO of Wintermute, a few days ago.
In the article, Evgeny Gaevoy provides a detailed response to the community's recent doubts regarding Wintermute's operational pricing and accusations of harvesting retail investors. Unlike some other public figures who generally adopt a calmer tone in their responses, Evgeny Gaevoy delivers a strong rebuttal throughout, even using profanity, but clearly addresses the relevant doubts by deconstructing Wintermute's business logic.
Below is the full text by Evgeny Gaevoy, translated by Odaily Planet Daily (with some omissions).
Recently, X (Twitter) has been particularly "lively," with some people’s understanding of market mechanisms reaching new lows. Although I have explained Wintermute's business model and operational style multiple times in the past, it is necessary to clarify it once more.
This Is Not an Apology Statement
We do not need to appease those "keyboard warriors" who shout on social media all day. We do indeed trade with these people on exchanges (whether CeFi or DeFi), but essentially, everyone is just taking what they need in a public environment. This post may help a few understand the true work of Wintermute (and other low-profile proprietary trading firms), but to be honest, I don't hold out much hope — after all, most retail investors do not understand that "uninformed flow" (referring to trading behavior lacking market information or professional judgment) is our main source of profit.
This article is written for those real partners — project parties, OTC counterparts, exchanges, and occasionally passing regulators.
About My Social Media Style
I have been very active on X in recent years, and my speaking style is indeed a bit abstract (even our own employees sometimes don’t understand those memes).
I enjoy playing with memes and accept being the subject of them; for example, the recent various K-line chart crash memes are quite interesting. If you took it seriously, that’s your own problem; a sense of humor is a basic human quality, and if you lack it, then I’m sorry.
If you think it’s not very kind to joke about those "unlucky ones who got liquidated on xxx"… I can only say welcome to the craziest casino in history; adults should take responsibility for their choices.
We Are Not a Charity
Like all other proprietary trading firms, Wintermute's goal is to make money through trading; we are not a charity. More specifically, our core business is digital asset trading. Therefore, we are not only interested in profiting from as many opportunities in the market as possible but also very interested in the sustainability, development, and growth of this field. Since 2020, our venture capital department has been investing in cryptocurrencies and has never net shorted. Our cryptocurrency exposure has always accounted for 20% to 30% of net assets.
Saying we short the market is pure nonsense. During the Luna collapse, 3AC's downfall, and FTX's bankruptcy… we lost more than we gained during these black swan events, not to mention the long market winter that followed.
What Exactly Does Wintermute Do?
Our core business is DeFi, CeFi, and OTC — compared to most competitors, our business is more diversified. We switch battlefields based on market hotspots, welcoming BTC, ETH L2, Meme, AI, and more.
CeFi Market Making: We place orders for hundreds of assets on over 50 exchanges like Binance and Coinbase, profiting from the bid-ask spread. In a bull market, we profit from active trading volume, while in a bear market, we compete with other market makers to "harvest." We also run so-called "market-making" strategies, allowing us to arbitrage between different platforms and outsmart slower market makers.
DeFi Arbitrage: We provide liquidity on 1inch, Jupiter, Bebop, arbitrage on Uniswap, execute liquidations on Aave and Morpho, and market make on Hyperliquid. We are definitely experts in this area.
OTC Trading: Our coverage is extensive, whether in terms of the number of tokens or types of trades (spot/contract/options). We expand our business through better technology rather than a larger sales team.
All of the above operations maintain delta neutrality. This means that if we sell an asset on Binance, we will simultaneously look for the best price to buy it back from all available liquidity sources. OTC trading may take longer to balance, especially when trading long-tail assets, but our ultimate goal is also to achieve delta neutrality.
We occasionally take proactive bets on market direction, but the positions are small and not held for long. The vast majority of our proactive operations are long, such as buying on dips or purchasing locked tokens at a significant discount, although we do short occasionally, but this is rare — because some junk coins can suddenly surge 500%, making shorting too risky.
Why Do Tokens Drop?
Now let’s talk more specifically about why prices drop, especially why tokens may drop after being market made by Wintermute or listed on Binance.
Macro Environment Impact
The recent two crashes stem from traditional financial markets (DeepSeek breaking AI value logic, tariff impacts). The crypto market is now highly correlated with the US stock market (Nasdaq drops → BTC drops → SOL drops → meme crashes); to become a more successful trader, one should understand that our small cryptocurrency market now has a very direct connection to the outside world. Of course, you can ignore this information and choose to believe that Wintermute and Binance are up to some conspiracy. Good luck, and continue being poor.
Supply and Demand Imbalance
The higher the liquidity of a token, the easier it is to sell. When a token is listed on Binance or when Wintermute starts market making, the liquidity of the token increases, making it easier for early holders to sell and cash out. If the project itself lacks ongoing appeal, the price will naturally drop. If you still don’t understand this by now and prefer to blame your trading skill issues on exchanges and market makers, then I can only wish you good luck again.
Market Making Agreement Terms
Some token projects have embedded call options in their agreements with market makers, allowing market makers to sell when the token price exceeds the strike price (which is usually much higher than the price when the market maker participated). This can indeed affect market fairness. I believe the industry needs more transparency, but the disclosure rights lie with the project parties.
Quick Q&A
Finally, here are some answers to common community questions.
About "Hunting" Stop-Loss Orders
We do not "hunt" stop-loss orders. Maybe we should, but I have always thought this is a high-risk business, so it’s better not to touch it.
About Price Manipulation
Sigh, we do not manipulate prices. First, we don’t know how to manipulate; second, our core business is profitable enough, so we wouldn’t do illegal stupid things; third, I live in London and enjoy traveling to the US, so I don’t want to move to Dubai.
About On-Chain Transfers
This is just rebalancing across different platforms. Sometimes AMMs show some K-lines that look like Christmas trees; that’s evidence of our arbitrage between CeFi and DeFi.
About the So-Called Luna Manipulation Video
It’s just a cherry-picked edit (with statements weeks or months apart); you can keep posting, and I will continue to ignore it.
About Private Messages
Don’t DM me asking for trades; I will not respond (except for West Ham fans), and all related chat records are photoshopped.
About Joking About Crashes
I reserve the right to continue making jokes.
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