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crypto.news 2025-01-15 07:34:46

Wintermute exec raises concerns over CeFi price discovery, urges more DeFi usage

To address inefficiencies in price discovery in centralized finance and over-the-counter markets, Wintermute co-founder Yoann Turpin calls for more DeFi adoption. In a social media post, Yoann Turpin , the co-founder of Wintermute , an algorithmic trading platform that focuses on building liquidity in digital asset markets, called out the challenges that come with price discovery in the crypto industry. Turpin claims that centralized exchanges like Binance engage in private arrangements between big buyers and sellers, creating risk in how consumers interact with different projects across the crypto ecosystem, skewing market opportunities in favour or larger players. “The role of a market maker is to help price discovery by offering liquidity so that people with opinions can express those opinions by buying or selling,” Turpin said. You might also like: Wintermute: 40% of Solana’s trading volume centers around meme coins The former music prodigy turned crypto mogul posited that prices are unfair to common buyers due to the influence of huge institutions and merchants on the market, with large markets effectively controlling price discovery. Major centralized entities, he says, can effectively control price discovery by concentrating trading activity, liquidity, and order flow on their platforms: https://twitter.com/YoannTurpin1/status/1878655276129333634 On the decentralized Solana meme marketplace pump.fun , Turn wrote that price discovery for meme coins are bootstrapped, a process by which the early phase of token launches, where limited liquidity and small market size are used to stimulate initial trading activity behind the scenes, without retail activity. He adds that Wintermute does not engage in such marketplaces, underscoring the challenges of price discovery in environments defined by restricted liquidity and smaller market dynamics, which he says is poised to make Wintermute a greater participant in the DeFi ecosystem. Read more: TradFi, DeFi are like ‘two worlds’ converging: Zignaly co-founder

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