A tidal wave of crypto supply is about to hit the market. More than $1.83 billion worth of tokens are scheduled for release between June and July, raising fresh questions about how projects can protect valuations while meeting distribution commitments.
Diego Martin, CEO of Yellow Capital, a leading venture capital and crypto market maker firm, believes the answer lies in abandoning outdated token-unlock strategies and embracing a system that responds directly to market demand, liquidity and trading depth.
In this interview with Business a.m.’s Onome Amuge, Martin explains why traditional market making often fails during major unlock events, why automated distribution could reshape token economics, and why treasury management may ultimately determine which crypto projects survive the next market cycle. Excerpts:
What structural weaknesses in today’s token distribution systems prompted you to build an alternative approach at Yellow Capital?
The existing options for token distribution are fundamentally broken. Projects have to choose between crashing their own market or handing over custody to opaque intermediaries. Everyone is focusing on how to buy, but the real structural weakness is that nobody is managing how tokens exit the market. We stepped in to build a programmatic alternative because founders must plan where to exit and how to settle their end in cash without triggering a fatal supply shock. Yellow Capital, unlike most market makers, focuses on selling as a priority. Our approach centres on treasury operations and strategic supply management, helping to create organic buy pressure and deep liquidity that builds trust in the ecosystem.
How does Yellow Capital’s algorithmic token supply management system fundamentally differ from traditional OTC desks or market makers?
Market making has become overtly commoditised, with established big players winning big on their relationships rather than technology. Traditional OTC desks and legacy market makers rely on rigid, manual selling schedules that ignore market depth in real time. This inevitably leads to wider spreads which damages market confidence over the long run. An algorithmic supply approach hones in on execution models that respond dynamically to live order books. Automating liquidations provides full execution visibility for founders navigating live market conditions. This active infrastructure replaces the traditional black box with a system that stabilizes liquidity natively during large-scale distribution events.
How does the platform determine when to sell tokens without artificially influencing price discovery?
Attempting to artificially inflate price discovery only creates a false sense of security for institutional and retail participants alike. An algorithmic distribution works natively with market conditions, continuously assessing organic liquidity rather than forcing volume onto illiquid books. The system only executes when the order book holds the structural depth to absorb the supply naturally. The token is another product, a vessel for value, as opposed to the sole revenue maker. Managing its distribution requires teams to pore over verifiable real-time data to limit price impact. Institutions need infrastructure that prioritizes capital protection over rapid deployment.
How do you ensure execution transparency while still maintaining trading efficiency in volatile market conditions?
In this industry, visibility can often be mistaken as transparency. If the market can see what you intend to do, you have not been transparent, you have given away an edge. Whoever sits on the other side of that trade reads the signal and prices against it, and the project absorbs the cost. The transparency that matters is what you owe the people whose assets you manage and service. They need to understand how their position is being handled and that their interests are protected.
What safeguards exist to prevent algorithmic liquidation from unintentionally amplifying downside volatility during weak market periods?
The most important safeguard is how the algorithms are designed in the first place. Responsible market makers build dynamic risk limits that automatically widen spreads, reduce quote sizes, or pull liquidity entirely when volatility crosses predefined thresholds. The goal is to keep providing liquidity during normal drawdowns but avoid becoming a forced seller into a thin book during a cascade.Â
Beyond that, there are structural safeguards at the exchange level. Most major venues now use mark price rather than last traded price to trigger liquidations, which prevents a single thin wick from setting off a chain reaction. Circuit breakers, tiered liquidation engines that close positions incrementally rather than all at once, and auto-deleveraging systems all exist to slow the feedback loop between liquidations and price impact.Â
On the market-making side specifically, inventory management is the key discipline. If your algorithms are properly hedged and position limits are enforced in real time, a liquidation event in the broader market does not force your system to dump inventory into the move. You can absorb flow rather than add to it. No system eliminates the risk entirely. But the combination of exchange-level protections and disciplined algorithmic design means the gap between a sharp drawdown and an uncontrolled liquidation spiral is much wider today than it was even two years ago.
How should founders rethink their approach to post-TGE liquidity planning in light of increasingly large unlock schedules?
A token launch is not a finish line, it is the day a project becomes a serious corporate treasury. Relying on retail hype to absorb massive token unlocks simply does not work anymore – unlocks should happen as demand grows. Serious founders must shift from reactive price defense to long-term supply management, prioritizing structural treasury health over trading volume. This means building deep, verified liquidity pools across multiple venues months in advance to absorb future token distributions.
With over $1.83 billion in token unlocks approaching, what systemic risks do you see emerging across the crypto market in 2026?
When a billion in locked tokens hits the market at once, it creates three major systemic risks. First is the risk of sudden flash crashes. Since trading liquidity is trapped inside isolated blockchains, most projects lack the depth to handle massive selling pressure. Second is the risk of price corrections. These supply spikes instantly expose projects built on hype, causing values to drop as the market dislikes tokens that lack real network utility. Finally, there is the risk of a domino effect. A dramatic price crash for a few major tokens quickly ripples outward, putting heavy financial strain on partner platforms and market-making firms across the entire ecosystem.
Do you believe algorithmic liquidity management will eventually become standard infrastructure for all serious token projects, and what would accelerate that adoption?
Yes, programmatic algorithmic liquidity is rapidly becoming mandatory infrastructure for any serious project. Strict global regulations now draw a clear line against artificial price manipulation, and to stay compliant and protect their funds, serious projects need automated treasury tools to keep their markets stable, healthy, and trusted. The real catalyst for adoption is the realization that treasury management is a survival function, not a finance function. A project needs a money-making unit that supports operations during downtime, independent of what the token is doing.
