DWF Labs as MM for TRU

Introduction
Trufi as Defi’s first and largest credit protocol has done ground-breaking work in Defi space. Its native token TRU is listed on various Tier1/2 CEXs with both spot and perp market. Despite doubts hovering over certain CEXs, we still believe maintaining a healthy orderbook and strong liquidity is critical for the TRU token over the long run.

In light of this, DWF Labs proposes a strategic partnership that leverages DWF Labs’ expertise in market making, liquidity provision, and ecosystem support to enhance TRU token liquidity and Truefi’s market presence.

DWF Labs’ Background
DWF Labs boasts a portfolio of over 700 companies, serving as the market maker for more than 25% of the top 100 companies ranked by CMC and 44% of those within the top 1000. We want to partner with the most visionary entrepreneurs with our goal in assisting all trading related matters while providing a high-touch, dedicated partnership-centric relationship.

Originating In 2018 as a proprietary high-frequency trading (HFT) firm in Switzerland, DWF was founded by a team of ETH graduates from Zurich and experienced quantitative traders from IMC; leveraging AI, machine learning, and advanced mathematical techniques in the design and implementation of its HFT strategies.

In 2022, following comprehensive market analysis and opportunity assessment, the company initiated the establishment of DWF Labs. DWF Labs engages in venture investments, secondary market transactions, Over-the-Counter (OTC) activities, and market-making services. DWF Labs’ rapid expansion has positioned the company as a leading entity in trading across spot, perpetuals, and options markets, spanning over 60 reputable centralised and decentralised trading venues.

Beyond these, the firm actively supports the crypto industry by contributing TVL, operating validators across numerous protocols, KOL marketing network, technical testing, smart-contract audit services and fostering the overall growth of its portfolio companies.

Today, DWF Labs’ portfolio is incorporated and tracked by leading crypto sources CoinMarketCap and CoinGecko, in response to the public interest in activities undertaken by DWF Labs and its partners – a testament to the firm’s success and influence.

Value proposition and differentiating factors
DWF Labs excels in dynamic prop trading, employing varied strategies in both CeFi and DeFi, including liquidity provisioning in DEXs and CEXs, cross-venue arbitrage, and HFT. We can enhance liquidity for TRU in both spot and perp markets.

Both DWF Labs and our venture arm oversee a broad portfolio that includes DeFi, gaming/NFTs, infrastructure, consumer applications, and RWAs, which Truefi can tap into to enhance its market presence.

DWF Labs is also a multi-stage investment firm which can potentially provide funding when Truefi team needs in the future.

Instead of asking for both TRU and stable coins, we only ask to borrow TRU tokens and provide stable coins with our own capital, which is more capital efficient for Truefi.

With a loan and call option model, it ensures that both DWF Labs and Truefi team interests are aligned. Also, it offers Truefi team opportunities to sell TRU tokens to DWF Labs at significantly higher than current spot price in the future with no market impact.

Proposal
Utilising DWF Labs’ market-making expertise, DWF Labs aims to increase the liquidity of TRU across multiple exchanges on different CEXs it is listed on (excluding those serving American users).

  • Token loan amount: 7,500,000 TRU tokens

  • Tenure: 24 months

  • Yield: DWF Labs will be providing a 3% annualised interest payable every 4 weeks with stable coins (USDC/USDT)

  • MM Objectives:

  • Bid ask spread: 35 bps
  • Depth +/- 2%: Binance 50k USD, Gate/Kucoin 30k USD
  • Trading volume market share: 7.5%
  • SLA: 24/365 95%
  • European Call options: there are five call options and each gives DWF Labs the right (not obligation) to purchase 20% of loaned tokens (total 7,500,000 TRU) at the end of 24 months at following strike prices:
  • Call Option 1: DWF Labs has the right to purchase 20% of loaned tokens (1,500,000 TRU) at strike price 1, which has 20% premium to the spot price of the time when DWF Labs receives token loan

  • Call Option 2:DWF Labs has the right to purchase 20% of loaned tokens (1,500,000 TRU) at strike price 2, which has 35% premium to the spot price of the time when DWF Labs receives token loan

  • Call Option 3:DWF Labs has the right to purchase 20% of loaned tokens (1,500,000 TRU) at strike price 3, which has 50% premium to the spot price of the time when DWF Labs receives token loan

  • Call Option 4:DWF Labs has the right to purchase 20% of loaned tokens (1,500,000 TRU) at strike price 4 - which has 150% premium to the spot price of the time when DWF Labs receives token loan

  • Call Option 5:DWF Labs has the right to purchase 20% of loaned tokens (1,500,000 TRU) at strike price 5 - which has 200% premium to the spot price of the time when DWF Labs receives token loan

2 Likes

With healthy volumes and a reasonable depth on bid offer spreads across exchanges: why even need a market maker?

Further, what KPIs as far as access to this broad portfolio protocols etc would you propose?

There is a lot of economic value that is given up for Truefi to be underwriting options for zero cost for a service with vague results.

3 Likes

I could be way off the mark here… but for me, having trust in the truefi protocol team and 3rd party relationships would be my reason to decline hiring a market maker, particularly in the context of “decentralised finance”.

Truefi Protocol, in my opinion, should continue to focus on “organic growth” to create a strong and self-sustaining ecosystem for liquidity providers.

Regulatory standards, reputation and trustworthines are essential elements of the Truefi Protocol, and for me, as a long term holder, upholding these values can be crucial for the long-term success and integrity of the protocols steady “organic growth” based on its own merits.

Furthermore, i feel, the potential reliance on external market makers can pose potential regulatory, reputation and trustworthy risk for Truefi.

2 Likes

It is very good to have a professional market maker to provide liquidity and funding for TRU, which helps the development of the project, and if you are a token owner, you must support it, which can bring you better returns

1 Like