IIP-83: Wintermute Market Making Proposal

IIP: 83
Title: Wintermute Market Making Proposal
Status: Proposed
Author(s): @fallow8, @wishful_cynic
Discussions-to: Updated Proposal discussion and Original Proposal discussion
Created: 9/5/2021

Simple Summary

Provide a loan of INDEX to be returned or repaid under the terms below within a year to Wintermute in exchange for commitment of Wintermute’s capital and resources towards market-making and tier 1 CEX listings for Index Coop products‌.


This proposal is published for presenting the terms of $INDEX market-making services to the Indexcoop community and approving it:

Authorize Wintermute Trading as an official $INDEX market-maker

Lend 1% of $INDEX supply (100,000 $INDEX) for market-making purposes as a loan to Wintermute Trading. Wintermute Trading will have to return in 1 year

  • The the full loan amount in INDEX; or
  • $5 million (USDC/DAI/ETH or mutually agreed upon currency) if any Index product or INDEX itself is listed on a Tier 1 CeFi exchange (defined below) with the aid of Wintermute’s efforts; or
  • $7.5 million (USDC/DAI/ETH or mutually agreed upon currency)

In return, Wintermute will commit to maintain inventory in Indices upon them being listed on any Tier 1 Cefi exchange. The amount invested will be 10% of AuM up to a total of $20 mln. In addition, Wintermute will and continue market-making on KuCoin and across DeFi aggregators.


Index Coop will experience exponential growth through Tier 1 CEX listings and a relationship with a market-maker of Wintermute’s caliber will ensure the Coop’s success in listing and supporting the token. See below for more from Wintermute on their motivation and background from prior discussion posts below:

Wintermute basic background

Wintermute was founded in July 2017 by three Optiver veterans. Evgeny Gaevoy, founder and CEO, was previously head of ETFs (screen and OTC) at Optiver Europe, one of the largest ETF market making desks.

Wintermute’s trading volume in 2H 2020 surpassed $70B and their average daily trading volumes in 2021 are over $2B

Wintermute is backed by Lightspeed Venture Partners, Pantera, Blockchain.com Ventures and others.

Wintermute Trading is registered with FCA for our OTC business.

Wintermute Index Coop specific background

Wintermute believes index products will be one of the key themes in 2021 and as a result is looking to back several teams in the space with an ultimate goal of:

Listing the index products on key cefi exchanges and facilitating liquid markets on these products and their derivatives (starting with perpetuals, following with options)

Combined total AuM of index products exceeding $25B by end of 2021

Wintermute believes the key issue with these products not being adopted outside of defi is lack of market making support as market makers and exchanges are not looking to support/list them because of low AuM, while the AuM stays low because there is not enough adoption/interest outside of defi. Wintermute wants to lead that adoption by committing a significant part of it’s resources and at the same time getting exposure to leading teams by becoming the official MM in protocol tokens and direct investment. Wintermute expects to be active in governance matters.

Wintermute is already a supporter of the Coop:

Makes markets for DPI on KuCoin and across DeFi aggregators

Go-to provider for OTC institutional flow in coordination with IC Institutional Business team

Invested directly in the Coop in the recent OTC sale

Specifically for Indexcoop community Wintermute commits to:

Provide liquid markets across all tier 1 cefi exchanges* (and a handful of 2nd tier as well). We already make markets across aggregators on defi (1inch, paraswap, matcha etc) and on KuCoin

Proactively support listing of $INDEX on key western exchanges in coordination with BD Index Coop members

Support new Index Coop product launches towards cefi and defi listings

In particular, once Indices are launched on tier 1 exchange*, Wintermute commits to hold 10% of the AuM for market making purposes with a minimum of $0.5 mln per INDEX, up to $20 mln in total for all listed Indices

Wintermute also commits to be the go-to Market Maker for any OTC institutional flow, providing competitive prices for tickets starting from 100K USD and beyond

*Tier 1 comprising of: Binance, Huobi, OKEX, Coinbase, Kraken and Gemini

Should it be determined that Wintermute is not expending efforts towards the above commitments, Index Coop may recall the loan.

Ask :

We would like to request the Index Coop community to pass a proposal to approve the transfer of up to 1% of the total token supply of $INDEX for Market Making services of $INDEX on key centralized exchanges.

We propose to Index Coop Community appointing a third party agent (Wintermute Trading) to act as the Index Coop Community Agent to market-make $INDEX across cefi, defi and OTC

To facilitate the work of the Community Agent on the community’s behalf, we propose to authorize operational actions required to effectuate the market making, including release of up to 100K $INDEX to the Community Agent from the Indexcoop Token Supply for liquidity provisioning.

This proposal has been discussed in the forums and on a community call and will move to IIP absent significant feedback.


Send 100,000 INDEX to a designated Wintermute address to secure the terms above and held/returned per this proposal.


This proposal incentivizes one of the largest market-makers in our industry to work on behalf of our protocol. All other market-making proposals the BD and IB teams have reviewed have requested a significant inventory loan of DPI/MVI or whatever products we’re market-making PLUS either a fee structure or option incentive. Wintermute will not require product inventory loans and has committed to using its balance sheet on behalf of the Coop. This step will have an exponential impact on the Coop and we look forward to working with Wintermute to make our products widely available off-chain.‌


Copyright and related rights waived via CC0.


Tagging @Pepperoni_Joe and @mel.eth for an IIP # here. Thanks!


I am strongly in favor of this proposal and will be voting FOR.

Great work @fallow8 and @wishful_cynic for the thoughtful discussion and work put into making this proposal over the past month and a half.

Let’s get some Tier 1 CEX listings!


Thank you @fallow8 with all the work done here. Looking forward to seeing this one move forward.


Fully in support of this, but I would personally like to see some examples of any other successful Tier 1 listings that Wintermute has managed to achieve since it was founded. Apologies, if this was touched on in any previous discussions.


Requesting for Snapshot on Wednesday (9/8) of this week. @sixtykeys


Hey @fallow8 @wishful_cynic , this IIP has been scheduled to go live on Wednesday, 8th September.
Snapshot here.

cc: @mel.eth


Just to clarify :

  • Is everyone seriously happy selling a circa $1.5m option for zero value when you are not even being listed on a Tier1 exchange ?

  • Also the size of the option is totally disproportionate to what is required for a market maker $index token on it’s current listings.

  • Why not focus on getting the Project in a state where it could handle being listed on a Tier 1 exchange ?

  • You need a market maker maybe once you get listed NOT before. That is the whole point of a DEX

1 Like

Personally believe that DPI is more than ready to be listed on a tier 1, and we have gotten feedback that Market Makers are needed/helpful for that listing process.

  • Yes $DPI is an on chain index tier 1 Defi names so clearly it is ready to be listed on Tier 1 exchanges subject to the due diligence on rebalance and code review of token sets contracts.

  • However this proposal is about giving huge value away in the $index token to a market maker.

There are a number of key criteria that the index project needs to fulfill to get $Index listed and a specific market maker is NOT one of them. It occurs ex post the listing decision. You can have a competitor process and select one of a number of eligible firms.

@fallow8 and @Metfanmike can add more but IIRC others were spoken to.

Here is a view from a competitor market maker on this structure for $Index “in our opinion that amount of liquidity is not needed for market making and is most likely a play on speculating on the price movement. We’ve seen these models in the past and believe that they can be dangerous as they could be the base for a price manipulation setup, due to the amount of token liquidity compared to the market cap that is being used on each market.”


I am also strongly FOR this and will be voting with my tokens accordingly.

There’s been a solid feedback process, we need to move fast and test things, and this seems like an experiment with an aligned partner who has skin in the game with the Coop.

I’m really excited to see what value this gets us in time and hope to see a T1 CEX listing in 2020.

Thanks for the proposal and grind pushing this forwards @fallow8 @wishful_cynic.


What terms would this competing market maker offer? What different alignment of incentives would they propose?

Sounds like they’re kinda saying they’d simply do it for cheaper, but there’s little clarity about who they are.

The comment was purely based on the data related to $index : DEX volume, DEX liquidity, Circulating supply, Tokens locked with VCs and Strategics, what liquidity can be generated from a token loan e.t.c.

Clearly a $5m option is totally disproportionate to what is currently needed to provide liquidity for the Token. You could support >$50 of daily volume with that size of loan. There is no need to sell an option of that size to 1 counter party at the expense of other token holders who bought into the project from the DEX or farmed. Relative to the free float of Index 100k is a huge block of tokens.

My suggestion was focus on building liquidity staked in $Index via the DEX. If the project hits the metrics required for a Tier1 listing then employ a market maker based on the liquidity required. You have circa 10 to choose from.

The following details what Binance requires. Note there is no mention of market makers.


  1. Binance expects to see good coins. What determines good is based upon: a proven team; a useful product that solves a fundamental need; and a large user base.
  2. There are no hard requirements.
  3. User adoption is heavily considered in the listing process.
  4. User value is heavily considered in the listing process.
  5. Technical expertise is heavily considered in the listing process.
  6. The communication process is part of the evaluation. If a project team is lazy, unprofessional, pushy, or does not seem technically competent, this can lead to a rejection of an application.
  7. Do not pressure Binance into listing your coins by ‘spreading FUD’ or encouraging your community to tag Binance.
  8. Do not encourage your community to shill your coin. It can lead to a rejected application.

@jackiepoo helpfully produced a breakdown of $index Tokenomics.

Of the 2MM circulating INDEX:

  • ~400k (~20%) are held in VC/OTC wallets & vesting contracts
  • ~50k (~2.5%) are held in liquidity pools, which can still be used for voting
  • ~40k (~2%) are held by contributor accounts. A total of 74k INDEX has been handed out to contributors as compensation, so if we assume that contributors didn’t sell any INDEX and are holding all that 74k INDEX in privacy accounts, that would mean contributors have 3.7% of circulating INDEX.
  • ~1.5MM (~75%) are held by other wallets we don’t recognize, including but not limited to:
    • Whales farming INDEX using DPI
    • OTC trades of INDEX by DefiPulse and Set
    • True believers in the mission who just bought INDEX at market
    • Privacy wallets
    • Literally everyone else
1 Like

Voicing my support for @Metfanmike @fallow8 and Wintermute.

I won’t pretend I have the expertise to comprehensively evaluate this proposal - but I trust that our IB team is making a decision that will only help Index Coop.


I dropped a few comments in the IIP-83 thread on Discord, so this is repetitive of that. From what I understand, if there is no CeFi listing after 1 year, Wintermute gets the option to return USD$7.5 million equivalent in USDC/DAI/Eth or 100,000 Index. Obviously, it would act in its best interest and return whichever is of lesser value.

Example: Wintermute gets 100,000 Index. 1 year passes and no CeFi listing. Despite this, the Index token trades at the USD equivalent of $250 per token at the 1 year mark. Wintermute then elects to return the USD equivalent of $7.5 million in USDC/DAI/ETH, electing to keep the USD$25 million of Index.

Just my two cents, but this proposal doesn’t align incentives well for Index holders. If I’m misunderstanding how this would work in that scenario, please let me know.

Then we’re aligned. The proposal makes clear that while the loan is in INDEX, Wintermute will be making markets in all our various products…

…and helping with a Tier I listing for any/all of them:

Our current push (whether it’s custodial token listings or centralized listings) has been and will continue to be DPI as our flagship product.

If the price of INDEX is very high in the future, it’s true that the 1% of the token supply will make the payoff to Wintermute quite lucrative, but:

  • What is the likelihood that their making markets in our products and helping with listings doesn’t contribute to the price going higher? If DPI gets listed and if we have a more liquid INDEX token than the relatively thinly-traded market we find ourselves in today, wouldn’t we expect the price to be up quite a bit?
  • In the scenario you posed, where INDEX has a market cap of $2.5bn, I’d imagine the rest of the token holders (ie, the community) would be ecstatic. We’re aligned because if they win, the community members win, too.

Sure they would be ecstatic, but that would have nothing to do with Wintermute. In the scenario I posed, Wintermute does nothing but gets an $17.5 million benefit which comes at the expense of other Index holders through dilution. I am not saying that Wintermute will sit on its hands. I am saying that Wintermute should not get a ‘heads I win, tails Index loses’ option.

1 Like

@fallow8 @Metfanmike I was aware that Wintermute said they were working “across the index space” (not a verbatim quote, just my interpretation) but I guess I didn’t realize they were actively pursuing a similar deal with Indexed and PieDAO - curious how y’all think about that?

I mean, it does kind of reinforce how great of a deal this is for Wintermute. They win no matter who loses and if they help someone else win it hurts us… just a quick interpretation by me, which I may not be thinking about it right…