How Coinwatch Is Exposing Market Maker Manipulation | Co-Founders Matt Jobbe & Brian Tubergen
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Market makers are hedge funds in crypto. You know, there there is, of course, a concept of a franchise business and they have sales team, but ultimately, they're profit driven. They're here to make money. I'm not saying that they don't care about clients. I'm not saying that they don't care about their responsibility as of providing markets, but they are not regulated like a market maker, like a Citadel is in TradFi. Right? Technically, when you look at the paperwork, they are pure hedge fund.
Bankless Nation. I'm here with Brian and Matt from CoinWatch. Brian, Matt, welcome to the show. Thanks
for having us, David. Thanks
so much for having us. CoinWatch
is probably not a name that the average listener is familiar with, but by the end of the episode, we're gonna illuminate exactly what you guys are doing because what you guys are doing are illuminating a part of the market that is very important for informed investors to be aware of. This has been a a topic market making has been a topic with a potentially or or a particularly large limelight in the 2025 downstream from a bunch of just controversies, debacles, drama as it relates to toxic market making deals with liquid tokens that have generated a bunch of hype. And so this is definitely a pa
questions and and important to to lay out the the the ground foundation for this conversation. So market makers, I think there is a lot of, let's say, caricature going around in crypto Twitter about the bad market maker who's responsible for, price going down and all of the ills of any token, really price direction. It's always the fault of the market maker, that shadowy entity that operates in the shadows. And, it's a hedge fund. It's an investment firm. It's what exactly do they do? So at the core of the definition of a market maker is really the job of providing bids and offers in an order
they only trade on weekends, sometimes they only trade when the
token is interesting, when the token is being talked about. But really, if when the token is interesting, when the token is being talked about. But really, if you want to be able to trade whenever, in Asian and European and American time zone, you need to have market makers in the book to provide that constant twenty four seven liquidity. That's at the heart of the of the job of the market maker. So
going on to an exchange and I'm buying and selling a token, typically, the base case is my counterparties, probably a market maker somewhere. And usually, that works out for both parties because me as the buyer or seller, I'm usually getting a better deal. And then the market maker is able to equilibrate, is able to arbitrage across different venues so that they can also gain a profit by matching an order that's on one side, like on Coinbase with matching an order that is somewhere else, Binance or Hyper Liquid or or on chain somewhere. So, usually, both parties are pretty happy, and that's ki
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