DWF Labs Clarifies DEX Sale and Hedge Liquidation

DWF Labs has announced that it sold a portion of its DEXE holdings. This was explained as a transaction to liquidate a hedge short position after the funding rate turned negative and to increase cash reserves. Co-founder Andrey Grachev stated that all buy and sell transactions were conducted on centralized exchanges, which hold the relevant account information. He criticized some KOLs for spreading potentially misleading information. Grachev reported that DWF Labs made a large purchase of DEXE in 2024 and realized profits by selling some of it in 2025. Subsequently, around October 10, they made another large purchase of DEXE and hedged their profits in the first half of 2026. The change in trading strategy was due to the funding rate transition, and Grachev mentioned that they forced the liquidation of the short position and sold part of their DEXE holdings to increase cash reserves. The funding rate is a cost that is periodically exchanged between long and short positions to maintain price equilibrium in the perpetual futures market. A negative funding rate indicates a concentration of short positions and reflects the market's leverage structure. The key issue in this clarification is not whether the spot sale occurred, but rather the timing and nature of the hedge liquidation and sale. Grachev claimed that the transactions could be verified through centralized exchange records, but the execution history and position sizes for each exchange were not disclosed.

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