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Title: Disturbing Truth About Crypto Market Makers Exposed by Synthetix Founder
In a recent statement, the founder of Synthetix, Kain Warwick, revealed some disturbing truths about crypto market makers. He attributed the popularization of market making to Sam Bankman-Fried (SBF) and highlighted how some market makers exploit discounted tokens for “exit liquidity.” This practice involves buying large blocks of tokens at a discount, holding them until prices surge, and then selling them off, profiting from the increase in value.
Warwick also pointed out that the reduced token supply makes it easier to engineer price surges. This means that those who hold large blocks can manipulate the market by shorting the top during initial exchange offerings (IEOs) and covering their losses at the bottom of the decline. They then pump the token into low-liquidity situations, allowing them to profit from the increased demand.
Furthermore, Warwick shared his own experiences with DWF Labs, revealing that Synthetix was the first project to be “grifted” by this company. While such deals may benefit a project’s treasury in the short term, they often harm the token and community over the long run.
In conclusion, Warwick urged market participants to closely examine token transfers. He warned that if you see a large block of tokens being sent to a market maker, it is likely that they are preparing for exit liquidity. This highlights the importance of transparency and heightened skepticism in the face of sudden liquidity spikes and behind-the-scenes deals.
Warwick’s statements serve as a reminder of ongoing concerns regarding questionable market maker practices.
Source: https://bitcoinist.com/disturbing-truth-about-crypto-market-makers/
