Proposal: Market Making Proposal from Wintermute Trading


This proposal is published for presenting the terms of $DOUGH market-making services to the PieDAO community and approving it:

  • Authorize Wintermute Trading as official $DOUGH market-maker
  • Transfer 1.5% of DOUGH supply (1.5 million $DOUGH) to the Community treasury for market-making purposes as a loan to the Wintermute Trading. Wintermute Trading will have to return either the full loan amount or 3 million USDC (~50% premium to current price) in 1 year
  • Wintermute will commit to maintain inventory in PIEs upon them being listed on any Tier 1 exchange. The amount invested will be 10% of AuM up to a total of $20 mln

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 $2B

Wintermute is backed by Lightspeed Venture Partners, Pantera, Ventures and others

Wintermute Trading is registered with FCA for our OTC business

Wintermute PieDAO specific background

Wintermute believes index products will be one of the key themes in 2021 and as a result is looking to back several teams in the space with an ultimate goal of:

  • Listing the index products on key cefi exchanges and facilitating liquid markets on these products and their derivatives (starting with perpetuals, following with options)
  • Combined total AuM of index products exceeding $25B by end of 2021

Wintermute believes the key issue with these products not being adopted outside of defi is lack of market making support as market makers and exchanges are not looking to support/list them because of low AuM, while the AuM stays low because there is not enough adoption/interest outside of defi. Wintermute wants to lead that 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 and direct investment. Wintermute expects to be active in governance matters.

Specifically for PieDAO community Wintermute commits to:

  • Provide liquid markets across all tier 1 cefi exchanges (and a handful of 2nd tier as well)
  • Proactively support listing of $DOUGH on key western exchanges
  • Support a number of flagship PIEs towards cefi and defi listings
  • In particular, once PIEs are launched on tier 1 exchange, Wintermute commits to hold 10% of the AuM for market making purposes with a minimum of $0.5 mln per PIE, up to $20 mln in total for all listed PIEs

Ask :

We would like to request the PieDAO community to pass a proposal to approve the transfer of up to 1.5% of the total token supply of $DOUGH for Market Making services of $DOUGH on key centralized exchanges.

We propose to PieDAO Community appointing a third party agent (Wintermute Trading) to act as the PieDAO Community Agent to market-make $DOUGH across cefi, defi and OTC

To facilitate the work of the Community Agent on the community’s behalf, we propose to authorize operational actions required to effectuate the market making, including release of up to 1.5M $DOUGH to the Community Agent from the PieDAO Token Supply for liquidity provisioning.

A Yes vote for this proposal would accomplish the following :

  • Approval of the above terms to enable the Community Agent to proceed with creating and transferring 1.5% of the total $DOUGH token supply from the community token allocation, where the proceeds will be directed towards market making.
  • The loan will be returned in 1 year, in Apr 2022 in tokens or in DAI/USDT/USDC equivalent at a price of $2 per token

A No vote would result in rejection of these terms


Hey @wishful_cynic, thanks for the proposal which I fully support.

My only point would concern the contractual obligation implied by such agreement between Wintermute Trading and PieDAO, being the latter a true DAO not currently represented by any legal entity. But I’m confident that, if accepted, the PieDAO community would easily agree on a solution to better frame such obligation from a legal standpoint (e.g. spin a LLC that could sign on PieDAO’s behalf).

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Has anyone performed any due diligence on the Wintermute organisation?
Has anyone had any experience, or anecdotal information on the reputation of Wintermute?
Does the DAO consider wintermute trustworthy borrower of an uncollateralised loan of 1.5M $DOUGH?
The DAO will be transferring 1.5M DOUGH, will this DOUGH be used to fund purchase of PIEs for market making?
Under what circumstances will Wintermute not honour the loan return?
Is there any fine print?
Has anyone from the DAO, such as core team, had additional interactions/ discussions with Wintermute leading up to this proposal? If so, what is the result?

Hey @margin - thanks for the great questions and the deep dive!

I’m currently heading growth at PieDAO and I had the discussions with Wintermute leading up to this proposal.

To address your points:
Yes, I have been familiar with the organisation for a few years now since my time in VC at Fabric Ventures. Wintermute have always been considered one of the leading market makers in the industry with a very strong reputation and positive references from a bunch of crypto projects I’d met back then.
I also now talked to reputable funds who invested in Wintermute, and who also very much vouch for both their quality as a market maker, and their trustworthiness.

Regarding the use of funds: the DOUGH borrowed will be held and used to market make on the “DOUGH” side of the markets, where Wintermute will use their own funds to a) provide ETH or USDT where necessary for the other side of the pair, and b) to purchase Pies to market make for them. So the borrowed DOUGH will not be sold to purchase any other asset.

In my view there aren’t really circumstances under which Wintermute wouldn’t honour the agreement to either return the DOUGH or the 3m USD equivalent. Not doing so would threaten their reputation massively, and they are dealing with much larger amounts on a daily basis so this wouldn’t really make sense for them.

There isn’t really much more to it. It’s a rather financially lucrative engagement for Wintermute as they have the opportunity to both make money on the spread and also the DOUGH option, but it also makes a lot of sense for PieDAO as it aligns incentives well and ensures they put their own resources to significantly increasing liquidity for PieDAO products & governance token. Which in turn would of course lead to deeper decentralisation, more adoption, and all the great things we are looking for. :slight_smile:

Hope this clarifies your questions!


Any updates on this?

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