To address inefficiencies in price discovery in centralized and over-the-counter financial markets, Wintermute co-founder Yoann Turpin calls for more DeFi adoption.
In a social media post, Yoann Turpinthe co-founder of Wintermutean 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 agreements between large buyers and sellers, creating risk as consumers interact with different projects in the crypto ecosystem, shifting market opportunities in favor or larger actors.
“The role of a market maker is to assist in price discovery by providing liquidity so that people with opinions can express those opinions to buy or sell,” Turpin said.
The former music prodigy turned crypto mogul has argued that prices are unfair to common buyers due to the influence of huge institutions and traders on the market, with large markets effectively controlling price discovery. .
Large 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 meme market Solana pump.funTurn wrote that the price discovery for meme coins are bootstrapped, a process by which the first phase of the token launches, where the limited liquidity and the small size of the market are used to stimulate the initial business activity behind the scenes, no sales activities.
He adds that Wintermute is not engaged in such markets, submitting to the challenges of price discovery in environments defined by restricted liquidity and smaller market dynamics, which he says is ready to make Wintermute a major participant in the DeFi ecosystem.
