Evgeny Gaevoy is one of the original cowboys, building a shop that enables digital assets trading in the midst of the 2017 crypto winter. Wintermute is now among the largest crypto market makers, providing liquidity on 65 exchanges.
Driving the news: Gaevoy, in an interview with Axios at an Ethereum conference in Paris, is stoic in the face of the current bear market and the mess left behind by the firms that loaned billions of dollars to the now-defunct Three Arrows Capital (3AC).
Why it matters: Thousands of investors, including major institutional firms, were burned badly after crypto lenders who, unbeknownst to their customers, loaned billions of dollars to 3AC — some of which were made on good faith alone. And now a pair of the biggest lenders among them — Voyager Digital and Celsius Network — have started bankruptcy proceedings.
What they're saying: Gaevoy says the leverage buildup was obvious on the DeFi side of things. That's a feature of DeFi — transactions are visible to everyone. But not so much with respect to the centralized lenders.
Between the lines: "There is a balance sheet equation. On the one side you've got assets that are not obviously verifiable because some of it might be on chain, some in GBTC, but a lot was in DeFi tokens. But it was not clear to how to estimate how much."
Between the lines: "What happened was 3AC was borrowing from everyone," Gaevoy says. "That's like mortgaging your house with five different banks."
Catch up quick: "We at Wintermute pretty much borrowed from the same set of lenders, albeit on a smaller scale. We deleveraged after the whole thing."
Flashback: Gaevoy built Wintermute in July 2017 and in two years started turning a profit. He emphasized that Wintermute did things the "right way" from the beginning.
The big picture: "If you look at the cycle of 2017, it basically only brought ICOs. This cycle brought us the concept of automated market makers, decentralized lending and resilient stablecoins. Protocols are emerging and becoming more important."
The future: Gaevoy is "cautiously optimistic." Cautious because global recession is looming and the crypto winter could last anywhere between 6 months to 5 years, he said.
Yes, but: Big money is holding out. "Institutions are backing out of everything. Everyone is waiting on the sidelines trying to figure out how to live in this new market environment. Like growth vs value."
What's next: Gaevoy plans to launch Bebop, a decentralized exchange or DEX aggregator, focused on user experience.
Fun fact: The name of Gaevoy's latest project is in part inspired by Cowboy Bebop, a Japanese neo-noir anime set in 2071 that tells the story of Spike and Vicious, who represent good and evil, respectively.
The bottom line: Gaevoy intends to outlast his peers this crypto winter.


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