Evgeny Gaevoy began his career in traditional funding specializing in market -making and prophas. But in 2016, seeing the inefficiency of older financial systems and the potential for disintering, Gaevoy realized that there was an opportunity to create something completely new and better.

With experience in building currency company OPTIVER’s European ETF business – one of the largest in the EU – he decided to launch an algorithmic trading company designed for the digital active era. Since 2017, Wintermute has since grown to one of the largest algorithmic trading and liquidity providers in crypto, processing over $ 5 billion in daily trading volume and providing deep liquidity to 50+ trading sites across centralized and decentralized exchanges.

This series is brought to you by consensus Hong Kong. Come and experience the most influential event in web3 and digital assets, February 18. Sign up today and save 15% with Code Coindesk15.

Here, Gaevoy, who will speak at consensus Hong Kong, discusses how Asian crypto markets differ from them in the West, how he predicts AI will be used for trade and marketing, and how Wintermute responds to the growing fragmentation of liquidity across multiple blockchains.

This interview has been condensed and easily edited for clarity.

What made you start Wintermute?

I started researching blockchain around 2016, which is relatively late compared to some early adopters. At that time, I was in traditional funding, and what really interested me was disinterested – to cut the inefficiency of the depot master and prime brokers who were painfully slow in how they worked. Blockchain seemed like a good way to disturb it.

But back then it all felt theoretical. It wasn’t until 2017 that I really got into crypto. I finish my job, started looking around and bought a small amount of Bitcoin at Coinbase – just to test it out. Then it doubled in the price of a week or two, and I was hardly aware because the volatility was just so crazy compared to what I was used to in Tradfi.

At Tradfi market production, there are maybe 10 days a year when things get really exciting-when the markets move 3-4%and it is considered a big deal. But in crypto, that kind of movement happens all the time. So I was expecting, I know Prop trading, I know market production, and I like to build things from scratch-so why not build a market-making business in crypto? This is how Wintermute became to be.

You have been actively engaged in both Western and Asian markets – what are the biggest differences you have observed between the two?

In terms of regulatory, everything is still primarily driven by the United States, even in Asia, most companies see what the US is doing instead of putting their own independent course.

When it comes to OTC and institutional trade, China is the biggest missing piece. Chinese institutions and businesses are still not allowed to touch crypto, and until the Chinese Communist Party changes its attitude, we do not see proper institutional currents from there.

What important options do you see coming out of Asia right now?

The most interesting development right now is how certain countries open up crypto in meaningful ways. Japan is becoming increasingly attractive because of its improved tax policies for crypto. By reducing the tax burdens on crypto holdings, the country makes it easier for both businesses and individuals to participate in the market without excessive financial sanctions. This is a significant step that can drive liquidity and institutional involvement.

South Korea is another exciting case, mainly because of its massive retail market. However, a major limitation is that foreign market manufacturers are still limited to integrating with local exchanges. If regulators were to allow external liquidity providers to participate, it could unlock a huge amount of liquidity. Right now, Korean exchanges remain rather isolated, which is why we still see phenomena like the Kimchi premium – a direct result of structural barriers that prevent global liquidity from flowing freely in the market.

On the other hand, Hong Kong plays a unique role as a pilot program for China. While China is still officially banning crypto, Hong Kong establishes regulated markets and institutional frameworks that can serve as a testing place for how China can engage in crypto in the future. This makes Hong Kong an important region to see, especially with regard to institutional adoption.

The most important thing to look at is how these markets develop experiment that could have wider consequences for China.

What have been some of the lesser -known or unexpected catalysts that drive crypto uptake and liquidity in Asia?

The biggest surprise to me is that many of the tales we see on Crypto Twitter and from VCS do not reflect what is actually happening on Earth.

A good example is Tron and Tether. In Asia and Latin America, USDT on Tron is the most widely used crypto -active for payments, especially for those unkind and those who want to escape currency evaluation. But in the West no one talks about it. There are also many projects and defi protocols that are ignored in the western echo chamber, but are doing really well in Asia. Therefore, I think it is important to keep a heart rate on what is happening in Asia, rather than just trusting Western tales.

Do you think AI will ever autonomously run an entire market creation operation?

AI is already widely used for trading and it has been for quite a long time. Machine training is not something new – companies have used it for prop dealings for years. What is different now is just how much more advanced AI models get and how much raw computing power is thrown into the problem.

Take, for example, XTX (another algorithmic trading company) – they have a crazy amount of GPUs dedicated to machine learning. They even build huge data centers in Finland just to run their AI models. It is not something new in trade, but the scale by which it is inserted increases rapidly.

Will AI replace human dealers completely? I don’t think it — in the least not in the next 5-10 years. The biggest limiting factor is how much you can actually automate.

Right now you have different styles for market company-some strong are dependent on AI, while others still have a lot of human input. Wintermute falls somewhere in the middle. We use AI where it makes sense, but there is still a lot of human decision making involved, especially when it comes to market dynamics that AI does not fully understand.

The real challenge is to adapt AI to a market like crypto that is still very unpredictable and lacks the structured data sets that traditional financial companies have access to. AI is big for pattern recognition, but it is still struggling with black swan events and very unstable markets. Until AI reaches a level where it can fully adapt to unexpected market shifts, people will still play an important role.

How is Wintermute approaching the challenge that liquidity becomes more and more fragmented across different blockchains?

At Wintermute, our core strategy is to facilitate and promote as much diversity as possible when it comes to blockchains, centralized exchanges and decentralized exchanges. We don’t see fragmentation as a bad thing – it actually creates more opportunities for us.

Right now we are connected to all major centralized exchanges, a large selection of OTC models and dozens of defi -ecosystems. This diversity is our competitive advantage. Instead of waiting for the market to converge, we embrace the fragmentation and place us to be everywhere, there is liquidity.

Could things become more centralized over time? Maybe, but I don’t think so, at least not in the way Tradfi works. In traditional financing you have CME for derivatives, a few dominant exchanges and a relatively small number of key players.

Crypto is different. It is inherently decentralized and I think it will remain that way. There will always be new blockchains, new trading sites and new liquidity pools. Instead of all that consolidates a couple of big players, I think we will see a continued expansion of ecosystems – and businesses like Wintermute should be agile enough to operate in all of them.

What are you most excited to discuss on stage at the hong kong consensus?

One of the things I would like to talk about is the market structure and the role of market producers in crypto. There are so many misconceptions about what we do. For example, if you go on Crypto Twitter, you will see that people who accuse market producers of causing pricing accidents, which is just not how it works. There is this huge misconception about what market manufacturers actually do, how we work and how we deliver liquidity. I want to remove some of these myths, explain how the market really works, and maybe even challenge some of the fake stories that are out there.