The Rise of DWF Labs: The Strategy Behind Investing in 470 Projects in 16 Months

Founded in September 2022, DWF Labs has become a focal point in the cryptocurrency industry in just 16 months. The company claims to have invested in 470 projects, including significant investments in well-known projects such as Synthetix, Conflux, Fetch.AI, EOS Network Foundation, and Algorand Foundation. However, the rapid rise of DWF Labs has also sparked numerous questions.

This article explores the operational model of DWF Labs by interviewing 16 customers, potential customers, and individuals familiar with the company's operations, as well as analyzing 10 proposals and contracts.

Coin Price Management Strategy

DWF Labs' early promotional materials extensively mentioned behaviors that influence cryptocurrency prices. In the "Price Management" section, the company stated it could collaborate with clients' marketing teams to help cryptocurrency prices respond to significant events. Specific practices include adjusting algorithms before scheduled news events to skew the order book to one side to drive up prices.

Multiple sources have confirmed that DWF Labs often showcases charts of price increases from previous collaborative projects when communicating with potential clients. Some written communications also indicate that DWF executives inquire about how high clients wish the coin price to rise and discuss the feasibility of achieving those targets.

However, in recent months, DWF seems to have stopped using such price management language in written materials.

Transaction Structure Revealed

DWF Labs primarily focuses on three types of trading: liquid token investment, locked token investment, and market-making services, which are often executed in packages.

For liquid token investments, DWF usually purchases tokens at a discount of 5-15% below the market price. The buying process lasts for a month or several months, with daily purchase amounts of about 100,000 to 150,000 USD. This allows the project parties to effectively cash out while also promoting the acquisition of substantial investments.

In terms of market-making services, DWF typically obtains project token loans and secures subscription options to purchase tokens at the price signed in the agreement. Compared to other market makers, DWF sets the option exercise price higher, which means that if the token price surges, DWF will receive a higher return.

For locked token investments, DWF typically seeks larger discounts, up to 50%, with a lock-up period of 1-2 years.

Partner Evaluation

Despite the controversies, some partners of DWF Labs expressed satisfaction with the collaboration results. Projects such as Algorand Foundation, EOS Network Foundation, and Floki gave positive feedback on DWF's services, stating that they provided valuable support.

Future Development

DWF Labs is advancing an incubation program for cryptocurrency companies and plans to create a compliant crypto over-the-counter trading market. The company is also applying for multiple licenses and undergoing audits by one of the Big Four accounting firms.

The rise of DWF Labs reflects the rapid changes in the cryptocurrency industry. Although its operational methods are controversial, it also highlights the industry's demand for new financial services. As the regulatory environment continues to improve, the development trajectory of emerging institutions like DWF Labs is worth ongoing attention.