Wintermute OTC Trading Volume Records 400% Growth in 2023: Report

Wintermute – the popular market maker and liquidity provider – witnessed continued growth in all business verticals in 2023 despite the market downturn.

In a new report, the platform said that its over-the-counter (OTC) volume surged by over 400% throughout the year as volumes moved off-exchanges.

During the first half of 2023, Wintermute’s OTC trading volume hit a slump, even as the number of individual trades remained stable. However, this flipped in its favor in the second half of the year of the platform as the number of unique trades increased sixfold to 29 million. Simultaneously, Wintermute’s weekly OTC volume hit $2 billion over the same period.

Wintermute’s OTC Volumes Grew 4x

According to the report, Wintermute experienced a substantial surge in trading activity in the H2 of 2023 as the markets gained momentum. The platform witnessed a more than sixfold increase in the number of trades, totaling over 29 million. Concurrently, it recorded its highest OTC volume week, exceeding $2 billion during this period.

This signifies a notable rise of over 20% in the trading of distinct assets compared to the H1 of 2023.

The OTC trading volumes for Layer 1 assets mirrored the general trend of Wintermute’s overall OTC volumes, declining by approximately half between H2 2022 and H1 2023 before experiencing a remarkable 350% surge in H2 2023. Notably, within the Layer 1 ecosystem, the Ethereum Ecosystem dominated, accounting for a 68% market share of volumes traded through its OTC desk.

Solana, Avalanche, Cardano, and Polkadot Ecosystems comprise the top 5 Layer 1 platforms in terms of volumes during H2 2023. Unlike Ethereum, the majority of these other Layer 1s demonstrated resilience and an increase in trading volume in H1 2023, with Polkadot being the notable exception as it experienced a slight decline in the first half of 2023.

Layer 2 platforms exhibited approximately 30 times less trading activity compared to Layer 1s, with Polygon, Arbitrum, and Optimism Ecosystems leading in proportion. Wintermute noted consistent activity and growth in Layer 2s, registering a substantial 160% growth from H2 2022 to H2 2023.

DeFi Stays Strong

Wintermute reported sevenfold growth in nominal volumes from H2 2022 to H2 2023 in the DeFi
category. However, the market share plunged from 16% to 11%.

Yield Farming assets were the most traded within the DeFi category, followed by Oracles, Lending, and DEX tokens.

The UK-based crypto market maker found that the dominance of Yield Farming assets stayed strong throughout the year, maintaining around 35% of DeFi volumes.  Over the same period, notional volumes traded increased over ninefold. Meanwhile, Oracle assets rebounded strongly after experiencing a slight drop in both volumes, representing 26% of all traded DeFi category volumes in H2 2023.

Additionally, DEX assets also experienced a substantial decrease in DeFi market share during the same period but saw more than a 3.4x increase in notional volumes traded. Lending-related assets, on the other hand, gained an additional 10 percentage points in market share from H1 to H2 of 2023, growing from 13% to 23%.

Last year, Wintermute was hacked for $160 million. Experts later alleged that the exploit could have been an insider job, a claim that was dismissed by the platform.