Wintermute, a renowned market maker and liquidity provider, achieved significant growth across its business divisions in 2023, despite challenging market conditions. This growth was particularly notable in its over-the-counter (OTC) trading volume, which saw an impressive increase of over 400% throughout the year, with a notable shift of volumes away from exchanges.

During the early months of 2023, Wintermute’s OTC trading volume faced a downturn, while the number of individual trades maintained stability. However, the latter half of the year marked a remarkable turnaround, with the number of unique trades escalating sixfold to 29 million. Concurrently, the platform’s weekly OTC trading volume soared to a peak of $2 billion.

The second half of 2023 witnessed a substantial rise in trading activity on Wintermute’s platform, with the total number of trades exceeding 29 million. This period also recorded the platform’s highest weekly OTC volume, surpassing $2 billion, indicating an over 20% increase in the trading of distinct assets compared to the first half of the year.

In terms of specific asset categories, Layer 1 assets closely followed the general upward trend of Wintermute’s overall OTC volumes. After a decline in the first half of 2023, Layer 1 assets experienced a 350% surge in trading volume in the latter half of the year. The Ethereum Ecosystem dominated this category, accounting for 68% of the volumes traded through Wintermute’s OTC desk. Other notable Layer 1 platforms like Solana, Avalanche, Cardano, and Polkadot also showed significant trading volumes, with varied performance across the first and second halves of the year.

Layer 2 platforms, including Polygon, Arbitrum, and Optimism Ecosystems, exhibited considerably lower trading activity compared to Layer 1 platforms, but still demonstrated robust growth. Wintermute recorded a significant 160% growth in Layer 2 trading volumes from the second half of 2022 to the same period in 2023.

In the DeFi sector, Wintermute reported a sevenfold increase in nominal volumes from the latter half of 2022 to the same period in 2023. However, the market share of DeFi assets decreased from 16% to 11% in this timeframe. Yield Farming assets emerged as the most traded within the DeFi category, followed by Oracles, Lending, and DEX tokens. Yield Farming assets maintained a consistent dominance, comprising around 35% of DeFi volumes, with a more than ninefold increase in notional volumes traded over the year.

Oracle assets in the DeFi sector showed a strong recovery after a slight drop, accounting for 26% of all traded DeFi volumes in the second half of 2023. DEX assets, despite a decrease in market share, witnessed a more than 3.4x increase in notional volumes traded. Lending-related assets gained 10 percentage points in market share from the first to the second half of 2023, growing from 13% to 23%.

This report comes after Wintermute experienced a significant hack in 2022, resulting in a $160 million loss. While there were speculations about the hack being an insider job, Wintermute dismissed these claims. Despite this setback, Wintermute’s impressive performance in 2023 highlights its resilience and growth in the crypto market-making and liquidity provision sectors.

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