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CryptoGoon: Finding Edges in Broken Markets
101 Plays8 days ago
CryptoGoon joins the Insilico Terminal Podcast to talk about leaving TradFi, discovering early DeFi, getting rugged, and finding real trading edges across crypto markets. We cover the difference between solo trading and working inside a trading firm, how simple arbs and broken on-chain mechanics turned into profitable trades, what market making actually looks like, and why new perp DEXs and prediction markets can still offer opportunities for traders willing to dig. He also shares his thoughts on Hyperliquid, HYPE, points farming, the current state of crypto, and why quant trading is often less about complex math and more about finding weird things before everyone else.
00:00 Intro + CryptoGoon’s background
04:31 Getting rugged and discovering early DeFi
07:08 Why TradFi-style edges worked in 2021 crypto
11:03 Solo trading vs trading inside a firm 15:25 The on-chain casino arb that became PvP
24:13 Finding edge early on new perp DEXs 31:10 Why quant trading is simpler than people think
38:39 Why points farming can reveal real edge
53:01 Crypto morale, HYPE, and where the market is now
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Transcript
Introduction to Crypto Goon's Journey
00:00:13
Speaker
Welcome to a new episode of the InSilico Terminal podcast. My guest today is Crypto Goon and my first question is are you a Gooner?
00:00:26
Speaker
Yes, of course. But do you mean the ah Arsenal Gooner or the Sextran Gooner? I mean both. both both yeah no obviously Are you an Arsenal fan? Any and all.
00:00:37
Speaker
ah Not a big one, no. like i When I was younger and I used to play a lot of FIFA. But I haven't really followed it in years. I know they did pretty well recently. though but Yeah, I'm a big i'm a big hater. i'm a big If Silph listens to this, he will know I'm i'm a big hater. So so where where does your name come from?
00:00:58
Speaker
uh good question i sort of just randomly came up with i may have even just put it in chat gpt at the time because it's like when it first came out but yeah ah i don't really know i sort of just memed a name that came up and picked it is that when you started being on ct and in i think 2021 when came out Yeah, around then. I mean, I sort of really got into crypto around then, like just before DeFi summer. um So yeah, I would have joined CT around then as well.
00:01:30
Speaker
So what's your journey
Transition from TradFi to Crypto
00:01:32
Speaker
been like? Or maybe we can start a bit with your background of what you did before Yeah, yeah. Yeah, so I started in TradFi. used to work at a big, guess, I don't know what you call it, like an asset manager maybe that would sort of do specialized trading for like global pension funds.
00:01:51
Speaker
Um, in there I sat on like a trading desk that did like, ah derivatives mainly in FX. Um, so I did that for three, three and bit years. Um,
00:02:09
Speaker
was interesting at the start, got boring quickly, sort of behind the scenes, uh, was, got into crypto mainly through my friend, uh, liquidity goblin who me and him are actually mates in real life and like some other mates who at the same time were also pretty deep, deep in at the time.
00:02:26
Speaker
Um, played around with it, early stage DeFi and got up hooked. And then after three years in TradFi, I was like, screw this, quit my job and took a year off, basically just yeah full-time solo, trading slash traveling.
00:02:44
Speaker
Then after year that, realized that's pretty boring and lonely. um So yeah, now do it as my day job and hobby. So that's where we are today.
00:02:57
Speaker
what made you get bored of threadfire like why was it interesting at the start and then go boring uh i mean it's not interesting it's just sort of like a solved problem there's not much new stuff coming out i mean there is some new stuff and there is some interesting stuff but like you're fighting over like 0.001 of a basis point a lot of the time um like the numbers are big but like the P&L percentage is small. I'd rather make 100% on $100 on like some crazy rogue DeFi arm than $1,000 on some boring trade.
00:03:34
Speaker
So yeah, that's sort of sort of why. And like going into an office five days a week is not as fun. And then I was making way more money from solo than I was at work.
00:03:47
Speaker
what What did your TradFi role look like, if you'd like mind to go into that?
TradFi Experience and Skills Transfer
00:03:51
Speaker
Yeah, so we like we basically had a lot of clients that were, like, a broad range of them, but primarily that would be pension funds.
00:04:01
Speaker
um In Australia, they're called super funds. They'd have, like, massive currency exposures. We could basically hedge their currencies cheaper and more effectively than they could internally. Uh, we would also do derivatives.
00:04:18
Speaker
Um, so they have like like liquidity ah requirements, um, and they don't want to hold all cash security, so we could put on futures for them and manage that, um, in like ah an efficient way and build sort of portfolios around that for them.
00:04:33
Speaker
It was basically like problem solving for like massive institutional money. But yeah. And what what was like the first thing that you did when you came to crypto?
00:04:46
Speaker
You discovered DeFi and then just started playing around or? Yeah, pretty much. The first thing I did was get rugged. um learning Learning in the fire. What happened? The like of first, like I played around with a few things, but the first major thing was ah back when Fantom chain was like a big thing.
00:05:07
Speaker
yeah, remember. that like There just used to be so much cool shit in DeFi back around then. like Every new chain would have such cool and unique DeFi protocols. If you just like looked at them, you could find so many trading things all time. Anyway, but on Fantom, there was this one called Tome.
Initial Skepticism and Learning in DeFi
00:05:24
Speaker
I got in early on that.
00:05:26
Speaker
and it was basically just the ponzi um there's one at like 10 fig apr kind of thing um farming there and then yeah eventually got rugged like it was on some auto compounding was called a grim or something was it like their version of an ohm fork or something different no i think this was before um it was like a stable coin i forget the like mechanism behind it but it was essentially like a stable coin and if you bought like t-shirts you'd earn more interest on your steak or whatever okay it just but it basically just minted like but the stable coin was like one to one with phantom i think not a dollar um interesting but yeah yeah and then the own forks and all all the other cool stuff that was going around that on around them like luna
00:06:20
Speaker
um some weird ftx stuff but yeah that was sort of my first four i into defile and then i got so it's like originally i was a really anti like crypto not anti but i was like coming from a trad five background i was like yeah and this is sounds like all a scam what the hell i don't know i'm like oh no this shit's fun is fun as what What made you change your mind?
00:06:43
Speaker
you You have a bad ah vision of it and then you come in, get rocked, and then you still turn around? i At first I was like, ah like this seems pretty Ponzi-like, just buying BTC and selling it to future willing buyers at higher prices. um But then I got like, I just thought that's all crypto was. Then I got introduced to DeFi.
00:07:04
Speaker
um And that that's when I was like, oh, OK, there's actually some like cool games here. It's like more like a video game than a like ah investment assets, I guess you could say. um And always sort of been into that side of things.
00:07:20
Speaker
What sort of things did you like? What what kind of trades did you make back then? Did your Treadfire background help you in like discovering anything? Yeah, definitely. Like, i mean, yes and no. I mean, Tradfly gave me the background.
00:07:31
Speaker
But, like, it was such a basic... like crypto is dumb tradfire so like anything that works in tradfire would work in crypto back then i mean it still sort of does now to a lesser extent but yeah like it would it was simple arbs like i remember as well there was ah some protocol i think it was like it's a curve or or a curve fork and permanent and permac but basically you like manually call a claim function you get a reward
00:08:03
Speaker
And then I found this, so I just manually claimed the function, I get paid $10 in rewards and like no one was doing it. So then you just like automate that and then you can... There was just like so much stuff lying around you could just go pick up and then you you move into... You find like one thing here and then you look at something similar and you find another thing there and you just start picking up all these different trades and strategies that at the time were more like games than they were trades.
00:08:26
Speaker
This was like 2020 2021? Yeah, around that yeah around that time Yeah, all way up until, I feel like FTX collapsing is like the end of the golden era of DeFi. Since then, there's been like not too much cool stuff
Strategic Trading and Market Dynamics
00:08:41
Speaker
going on. I remember CT back then was like so much more interesting. People post like crazy stuff.
00:08:47
Speaker
That was so cool, but there's still bits of like stuff coming out that are interesting, but yeah, it's a lot more. one more time these days. Did you still find like interesting stuff to trade in 2022?
00:09:00
Speaker
i think like the market was pretty much down only back then, but maybe there were still opportunities. Yeah, theres there's always been opportunities. It's just like sometimes they're harder to find. And I find it comes in waves. like You won't find anything for a couple months and then all of a sudden you find three at once. And like that's sort of still how I do it today. like A lot of the time I'll find one strategy that works either thought they'll say for example on chain i'll see who my competitors are doing a similar trade or the same trade and then like oh they're also doing another trade on their wallet on this other protocol like what are they doing here and then i just steal that trade from them as well copy that but that's a big alpha actually is being able to like just click on block explorers on like other wallets but uh yeah like there's always been trades and sometimes and more sometimes less
00:09:50
Speaker
were Were you affected by the FTX collapse? ah Not like severely. had a little bit capital on there, but yeah not really.
00:10:01
Speaker
So what what what did you do afterwards? like What has your journey it been since the the ETF?
00:10:08
Speaker
Yeah, like since then, um... It's sort of transitioned from like the crazy DeFi stuff. mean, it's still doing a lot of DeFi stuff in like 2024 and stuff. had a big one on my casino, or crypto casinos that were like mispricing stuff. But now it's sort of, I feel like, maybe this is just me, but i feel like the crypto market has gotten...
00:10:32
Speaker
like weirdly competitive where a lot of things now are like quite accurately priced um even on chain most of the time i mean you can still find like random sex deck subs on chains if you go looking like you can literally click trade them um but like outside of that most like things are pretty fairly priced so now it's moved into more like uh
00:10:58
Speaker
like a stat arby kind of trading style where you trade like multiple things at once and like layer them all into a big cake.
00:11:11
Speaker
Or just, yeah, blatant sex deck subs.
00:11:15
Speaker
what What is like the difference for you as someone that has been on on both sides of like working with other people and being in the team and also being by themselves and just trading solo?
00:11:26
Speaker
what What are the differences would say? like For starters, like you definitely can't do some things. I mean, you can try, but you won't be very competitive doing certain types of trading solo as opposed to a team. For example, like market making, especially on centralized exchanges, is like extremely competitive.
00:11:45
Speaker
um and like the infrastructure required to be able to do it competitively, like one a massive capital outlay and two you just need like a lot of people sort of all working and collaborating together unless you're like a 100x dev and slash trader but even then like you'd be better off in a team i would say yeah um but then on the flip side like being a solo you can do a lot of things that you can't do in a team for one like there's a lot of small trades that make
00:12:20
Speaker
one, five, 10K a month that like it was just left behind by big traditional trading teams. One, either because it's not worth their time, two, they don't have, they like haven't been able to implement it yet because they're waiting for risk approval or compliance or legal or whatever the hell um is going on. So there's like pros and cons to both sides o of ah that up the table, I guess.
00:12:49
Speaker
So as a solo trader, have you mostly been doing like arbitrage stuff? Do you have like any sort of like ah infrastructure for like automating those sorts of things, so you just do it all? Yeah, yeah I have like a really basic infrastructure um that i can like it does, like dex trading, sext trading.
00:13:07
Speaker
um but I have like a think this is in... Is it Lippmann's? but Expected Returns. He like has this good graph of... like a a it's either a pyramid of a cube of like uh you should structure a portfolio of like your base like risk premia like don't investing in stocks it always goes up but you can lose money then you have like uh factors on top of that i don't really care about factors in crypto but then like you have your alpha so i have like a base portfolio which will be like in crypto anyway like uh
00:13:41
Speaker
momentum trend, like basic factors all overlay to each other. I don't really do discretionary bets because every time I do, I lose money. um ah So that's like a base. And then if I see like a cool lab, I'll just pull capital from there and chuck it into ah whatever like the alpha trade it is at at the moment. um And yeah, i just have like a generalized system that like I use for both. And then I just quickly adapt to whatever I need it to do.
00:14:08
Speaker
I think Boris Contrarian has posted that before, like this pyramid of like how you yeah like posted an article about how you should like structure your portfolio. I think that pyramid is from that book. I could be wrong. Maybe not. Maybe you made it.
00:14:21
Speaker
But yeah, I'm pretty sure an expected return. So I like have a whole chapter on that aspect of things. Good book.
00:14:29
Speaker
Have you like learned a lot of... ah do Do you think trading books are a good source of knowledge for for crypto? I like you few people read books about trading, to be honest. I mean, yeah.
00:14:41
Speaker
Yeah, like book posting on CT just to farm engagement. I think, like o i would say yes, like books are good. But the problem is with it is that people just like read the book and then don't do anything or like just like try and read 50 books to like fully understand everything. Whereas like the best way to actually learn is just like do it like build something really shitty that like you can get up and running in an hour and then just iterate because like you can read all the books in the world but you don't know like
00:15:16
Speaker
the problems until you get to the problems. So there's like no real point reading every possible solution to problems that you don't know are going to exist. So yeah, I like, i always say like, just build something. And then when you, if you come into a problem, then like, go looking for the answer in a book or like whatever, rather than the other way around.
00:15:37
Speaker
Do you maybe have like ah some some examples of trades that have worked well for you in like the post FTX era?
Team vs Solo Trading Approaches
00:15:43
Speaker
Maybe from like a couple of years ago or something, so it's like not leaking anything. Yeah, I mean, ah I'll go into like a main one I had couple years ago.
00:15:58
Speaker
think I've mentioned this before, so it's not really leaking anything. But there was a on an alt L2 chain um It was like this new casino. It was like a new chain that was launching, then we launched a token, so everyone was bridging there and like playing around the ecosystem.
00:16:16
Speaker
And there was like a new protocol that sort of, it was basically a casino, but one of the games was like a PVP game. ah You didn't have to like control anything. It was just based on, it was sort of like these polymarket up-down markets.
00:16:29
Speaker
Okay. Except instead of it being an order book to buy and sell, it was all on chain. So they just had a toque pool. So you could, so people could bet on price going up or price going down. If someone put one ETH up and one ETH down, the payout would be 50-50 minus like a protocol fee.
00:16:48
Speaker
um But if someone bet two ETH going up and there the other side were betting one ETH going down, the down bet would basically get like a two to one payout on top of, sorry, you'd win the two ETH and either sacrifice one ETH.
00:17:04
Speaker
if you won or if you lose you lose your ace. um But like that, and this was like every minute it would it would go ahead and this type pool. So basically you can just like look at the state of the pool and I would just like build a super basic bot that jumps onto the,
00:17:22
Speaker
like underweighted side of the pool, basically getting more than a 50, 50 payout or two to one payout every time. Um, and that worked really well. There's a few other people doing it. And then it turned into a PVP metagame where like people would, for example, chuck a massive bid on up couple blocks before the last block would, would shut off. So then my bot would see that and think, oh, there's a good opportunity bet down here.
00:17:50
Speaker
You'd go bet down and then they'd come in on the same block as you and hedge them themselves out. So then I'd be pushing it back into their original bet favor. Um, so then like they exploited me for a bit. I had to go exploit them they worked out a way to stop me exploiting them and came out. So then it just turned into a metagame. That's sort of how a lot of these things progress is like.
00:18:09
Speaker
Is that like the usual occurrence where it's just like trying to one-up each other over and over again until you're like priced out or something at some point? Yeah. it's Yeah. the you Like sometimes people even just burn cash to like make you stop and go away and say, oh, fuck it, it's gone, whatever. And then they just take it all back. But yeah, it's like a lot of times, especially these defy ones, turn into like massive metagames.
00:18:34
Speaker
How do you know when to walk away and find something else?
00:18:40
Speaker
whenever you're about to run out of money. I mean, like, a yeah, it depends. Like, a lot of the time, you can see if the EV is still there or not.
00:18:51
Speaker
Especially on, like, DeFi ARBs, not so much on, like, ah I don't know, longer horizon stuff, like medium frequency trading. If that's what you mean by like when your edge is decaying, it's bit harder to recognize. But like for ARBs, like if you have like a a reference price that you're using, you know if there's like an ARB there or not, or if you're winning or losing it. So if the ARB is closed, then yeah, you can leave it and find something better. Yeah. and But yeah, sometimes like I see things and it's just like not even worth my capital because I have a better ARB.
00:19:25
Speaker
So like, sometimes yeah you walk away without even even starting you just add it to a list and when your main one runs out you can go find that one again so um in in ah right now you do like also market making right yes correct like uh
00:19:48
Speaker
Currently I'm in like a crypto native trading firm in my day job. So yeah, they were doing like market making as well as some DeFi stuff.
00:19:58
Speaker
Did you do market making in TreadFi before? Like was it also your role or No, not really. Usually it was a like taking rather than applying liquidity. But yeah, no.
00:20:12
Speaker
but So what what what exactly is your role if you can talk about it maybe? Yeah, so my day-to-day, originally I started as like a DeFi trader specifically, but then they've sort of merged our teams and now I am across sex and ex stuff. um It's pretty dynamic. We sort of move around between different opportunities. But yeah, at the moment I'm doing a lot of centralized exchange market making. I can make in there, but yeah.
00:20:44
Speaker
what what What does like the work as a market maker look like? Do you just sit there and do you have all these bots created already and you just like monitor them until they break? Pretty much. It's very boring. People like always say they want to get into quant trading and become a market maker. big I feel like it's mostly just like trying to get a prestige farming rather than they actually interested in the work. like I'm like generally genuinen genuinely interested in this stuff like i grew up Like I got hooked when I like FIFA 14, think came out on ultimate team and just trade coins and then I was selling them and stuff and then runescape back in the day. So like I've been doing this since I was like 10 years old without even doing it. Yeah. Um, so like,
00:21:31
Speaker
If you don't enjoy it it, is quite boring a lot of the time. But yeah, it's essentially you have lots of bots running. you have a strategy. You tweak the strategy. Maybe you see something or do some data analysis that suggests something might work better than what you're currently doing. Try it out.
00:21:49
Speaker
yeah
00:21:52
Speaker
Has it become like more difficult over the years since more TradFi participants have entered? Yeah, definitely. I mean, it's very, very hard to, ah at least on major exchanges, to make money um market making because a lot of the exchanges, like if you're a retail guy, it's, it's,
00:22:11
Speaker
is almost impossible on major exchanges just because like big teams have massive infrastructure advantages that isn't available to everyday Joes.
00:22:23
Speaker
Also, they have more capital and also, um, like they get sometimes market making deals with the exchange where they'll get paid so they can price it like negative They can just like get picked off happily yeah under like a BIP and they'll make it all back so in the market making deal. So yeah, it's it's very tricky.
00:22:49
Speaker
What's the difference between like market making on a centralized exchange versus a decentralized one? ah Not too much. It's just decentralized, I guess, is a bit slower.
00:23:01
Speaker
um
00:23:05
Speaker
Yeah. the The strategy is basically the same, I guess. um There's some tweaks that you can do around the decentralized ones. I mean, also on centralized ones, there's like exchange differences,
00:23:18
Speaker
um like some very slight exchange differences that you shouldn't have to take into consideration in your strategy, but yeah. It's the same with decentralized exchanges, just like different quirks you have to consider.
00:23:35
Speaker
Is market making more profitable? i don't know if this is like a stupid question, but I don't know too much about it. But like you know sometimes people say that there are venues that are more like retail heavy, like Bybit, for example, or Hyperliquid or whatever. So they have like more uninformed flow. Would it be more profitable to do market making on an exchange like that and on another?
00:23:54
Speaker
Yeah, definitely. I mean, yes and no. I mean, it depends on how many other market makers are there also doing the same thing. Like, I guess it'd be like a metric of like retail flow to informed market makers.
00:24:10
Speaker
Yeah. um Yeah. If you can just capture as much retail flow as you can, and yeah, it'd be perfect. But then everyone's trying to capture that retail flow, so it's competitive to capture and then... Yeah, it's tricky.
00:24:25
Speaker
How do you um like go about integrating new new venues like when all these taxes
Navigating New Trading Venues
00:24:31
Speaker
popped up? i guess Obviously, Hyperrequiry is like the biggest one, but all the others also need need more market making and there's like another perp tax popping up every every single day. How do you like weigh the the risk and pros and cons of and engaging with that?
00:24:44
Speaker
yeah i mean uh like in personal trading like it's usually i can do it very very quickly i try and get on like api whitelists or whatever as soon as possible because that's where the most edge is like if you get in early can even pick off their uh like hlp equivalents remember when lighter first started don't even know what it was but i'm pretty sure that like what's the lighter one llp i think it was called i think so it's like the hlp equivalent but I'm pretty sure they had like for a week or two, some really weird implementation and stuff. I needed to get like IP whitelisting. So I was just like spamming whoever was working there on Twitter to give give it to me. But eventually I got
00:25:24
Speaker
But their lighter liquidity pool would like just market trade when they picked up too much deltas, especially on altcoins. So it just blasts like 2% through the book. So like the first week before I even had API, I was just like looking at its LLP positions. It could could have just been other market maker, I don't know.
00:25:42
Speaker
um whichever ones were like heavily... like had a lot of delta exposure in one direction i would just start posting like man like on the ui manuals limit orders like a couple percent above or below the opposite direction they'd need to close out and then i' just get hit and i was just doing this overnight and another guy i appeared and i did it for a bit in the night patched it um so like solar if you can integrate as cru possible possible it's pretty like there's edge but like ah
00:26:13
Speaker
In a big institution, it's usually like, i mean, we had devs that do integrations in like super latency sensitive ways, but also like it is more of like a commercial high level, ah strategy decision to move into a certain exchange or not. yeah I think some of them can be like quite risky. I've definitely seen, i'm I'm not going to name many names, but I've seen couple Twitter articles or whatever of people doing similar stuff like picking off the vault or Intel Lab M or whatever and then like the decentralized account becomes frozen all of a sudden and you can't withdraw your decentralized money anymore. so
00:26:50
Speaker
But that happens on centralized exchanges, too. Yeah, true. yeah Is it BitMEX or something that's like notorious? Was it? i don't even i don't even know. I mean, I guess it can happen pretty much every everywhere if you'd like to. There was this whole drama about the the when, what was it called?
00:27:06
Speaker
Jelly Jelly happened? Oh, yeah. yeah On Hippolyquid. Because ah people were going on about, oh, if this happened on Binance, then they would just freeze your account and you just you're just not getting your money back.
00:27:18
Speaker
And I think Hippolyquid did the same, actually. So it's like. Yeah, yeah. They just like undid everything, right? So counterparty risk is probably something you always need to be like aware of too.
00:27:30
Speaker
Yeah, had this thought recently. I had the worst trade of my life recently. I had shitload of hype and I dumped it all at 40 because I got super panicked of North Korea after they did all those hacks successfully. I'm like, oh my God, they're definitely like... Because after the, was it the Drift one where they were talking the team for a year as a massive new pot, I was like, oh my God, they're for sure honeypotted hyperliction somehow as well. It is pretty scary, yeah.
00:27:56
Speaker
But then, like, ah what's the big hack on Arbitrum? No, the hackers move funds to Arbitrum and the Arbitrum Foundation, like, reverse the transactions. Then i was like, oh, yeah if, like, this happened on Hyperliquid, then, like, maybe the Arbitrum Foundation should just be like, how about you just leave the money here?
00:28:16
Speaker
So don't know. But, yeah, I sold all my hype. and then It's actually a good good good way to think about it. Like, sometimes I also think about what what if hype gets hacked, but... the the the arbitrum foundation and then also circle will probably protect uh yeah all the user are funds from from everything solar and i think hyperlip could also like roll back the chain and shit like that so That's assuming mean the Circle execs aren't at Cannes Festival just raving like last time. I don't know if you remember the photos. They're like, guys, the drift has been hacked 200 mil.
00:28:47
Speaker
so Really? we Did it happen? Yeah, yeah. Because it didn't happen on like April Fool's and during like ECC and Cannes. I don't know it's real, but people like the Circle guys at the conference just doof them.
00:29:05
Speaker
Yes. So how much like what what do you personally think
Passion and Persistence in Trading
00:29:10
Speaker
is better? Like or why do you still do both? why Why do you like trade for yourself and and work in a company? Because I'm like ridiculously dumb and I love this stuff.
00:29:21
Speaker
Like ideally I wouldn't do both. It's not like there's much better things I could be doing with my time and just like trading all the time. But yeah, it's basically just because i like it. I'm like actually interested in this stuff.
00:29:34
Speaker
you like yeah You love your job so much you can't get enough of it and do it in your free time. exactly. I do it in my free time. But like it's the idea like at my day job, it's like the boring trades like market making and stuff you can only do in a big team really.
00:29:48
Speaker
Not boring but like just different. Whereas in my day job, oh sorry, outside of my day job, I do like really rogue trades that like make sometimes not even that much money. They're just fun to do. Do do you have any any bigger blow ups with your personal balance?
00:30:08
Speaker
uh oh not like haven't blown up like because a bot went wrong or anything but i like the one time i took a directional trade was back in when was it i like solana meme coin round was that 20 25 whenever that was the 24 25 yeah the movie i like
00:30:28
Speaker
like got somewhat deep into that thinking oh yeah I'll just I just got to hit one right let's just lottery tickets surely like I'm not chronically online I should be able to pick one but uh I had peanut and then I like fumbled that the day before the uh coinbase listing I was like oh my god this sucks and then I got like early on foreign I was like oh my god this is like gonna go to the moon i just kept buying up and then Trump did his coin I was like, oh, this is it. It's going to get listed on like exchanges. It'll be like Dogecoin.
00:31:01
Speaker
And then it never got listed. And then it just ran down. and I just lost so much money. It's disgusting. The Trump coin. No, on Fartcoin. But like Trump coin, i blame for running a run.
00:31:13
Speaker
Wait, Fartcoin was before? Yeah, Fartcoin was before Trump, right? here Yeah. True. So even even the smart quant people can get rocked on meme coins? Yeah, exactly. like I'm actually really dumb.
00:31:29
Speaker
So you can be dumb as a market maker. Yeah, exactly. People think it's like a really hard, complex job, but it's just like ah you do like basic stuff somewhat well and rather than super complex maths and stats. like Why does everyone have a physics PhD in it then?
00:31:48
Speaker
I don't know. The best people I work with are like uneducated people that like did six years in like the mountains or something.
00:31:59
Speaker
it Really? What do you mean the mountains? all of that Just like some crazy background. Being a monk for six years, coming back to some market making crypto.
00:32:09
Speaker
They got the word from God. Yeah, yeah. yeah enough but yeah, like I've, I think like the correlation between like PhDs, I mean, even in my TradFi role this held is like,
00:32:23
Speaker
I don't think it's, it's definitely a so maybe slightly positive correlation between PhD and performance, but like. Yeah. It's not, I wouldn't say it's the best predictor of success, especially in quant trading.
00:32:35
Speaker
I think it the the best predictor of success is someone who was like, i think I saw her Augustin say this once, but like ah someone I think his indirect quote was like the best at like, or top five in the world at like a weird variant of chess. Like someone that is really good at something really obscure that's like somewhat strategic.
00:32:58
Speaker
or like game some weird game like top 500 in a video game but generally that would be ah that's like the best that's ah predictor for quant quant success yeah because i think it like is a good proxy for people who are able to like deep dive on like a really boring topic and yeah that actually makes sense just like neurotically figure it out So just need to be really specific, really authentic about something specific. Exactly. Exactly. mean, and I guess a PhD sort of has that, but like also people, there's a good portion of people who do PhDs who are just like academics who just like good in high school, good at university, and they just don't know what do. So they just do a PhD.
00:33:40
Speaker
So it's like somewhat of like a false signal, I would say. Not a false signal. It still works. but but what What is your autistic specific obsession apart from markets? Oh man, mine changes every three months. Like recently I got really into drones.
00:33:54
Speaker
So I've been like building and flying like FPV drones. Um, yeah, it changes all the time. Have you ever been good in any video game? Yeah, I'm like, well, I was really good at FIFA back in the day, but that's because I was like also mainly trading there. But FIFA is a terrible game. I don't want to go too much off-talking, but it's like, on for me, like I enjoy playing career mode and shit, but like as a as a competitive game, big because there's so much RNG involved, I don't understand how people can play that competitively. yeah. But there's a lot of RNG in trading.
00:34:29
Speaker
Yeah, but it's worst it's it's like the most kind of RNG. It's just so like it makes you want to smash the controller into the screen. Yeah, I mean I should be better at video games considering how much I play them. But like I but i used to play a lot of League and like I was never really good. I don't even think I got to Diamond. I think i peaked.
00:34:48
Speaker
What was it? Platinum? One Below Diamond? Whatever it is. I mean SPF was like Heartstock Bronze and Scam Billion so I guess it's also a decent quality player. That was crazy. If I was on as much Adderall as he was on I would have been Challenger for sure.
00:35:03
Speaker
Holy... So you've never ah you've never like really blown up about it. What happened on on October 10th? What did the day look like for you? What did your your strategies look like?
00:35:16
Speaker
ah Well, like... We hit circuit breakers, so like it was pretty chill, but like personally, uh, I got pretty lucky, like my thing completely broke and then I got ADL on all my shorts at the peak at bottom.
00:35:33
Speaker
So then they closed me out and then just had my lungs recover. So I woke up and I had shit loads. Um, So everyone was raging on the timeline like, oh my god, Hyperliquid ADL, like what the hell? i was like, what are you talking about? This is a great system. Were you running like any any specific arbitrage stuff or just like trend following what code moves?
00:35:56
Speaker
Yeah, trend following called mode. But I use it as like a hedging venue if I was doing ARBs at the time. Because i was like, oh, maybe they're going to another airdrop in the future. So I mean, I'm there now a lot in my personal stuff as well. Like I think, I mean, there's so much edge up on the XYZ markets at the moment. Or like the hip three markets um
00:36:20
Speaker
that I've been playing around with. But yeah, like...
00:36:25
Speaker
Are you doing like ah like fund funding arbitrage there or ah also like weekend? the pretty Yeah, weekend stuff, close and open stuff.
00:36:37
Speaker
um Not so much funding. Actually, I'm doing no funding there at the moment. I guess you could call funding because it's somewhat of cross-exchange AB or cross-exchange market making, so there is some funding. But it's not purely delta-neutral funding stuff. It's a bit of everything laid on top of each other.
00:37:02
Speaker
What do you think about Hyperlequin in general? like but like Have you played around with HIP before? Or like Polymarket stuff? Do you do any production market stuff? Yeah, so I was on Polymarket and then I was making a bit and they did lots of changes all the time without letting anyone know and I like lost my whole account like twice. But I mean, there wasn't much there. yeah like When they first did the secret fees or whatever, I woke up at zero dollars.
00:37:30
Speaker
was like, what the fuck happened last night? Did they secretly introduce fees? yeah well secretly when i say secret i didn't know about them so okay it must have been secret maybe they announced them i'm pretty sure i everyone on the timeline was like what the fuck they just did this change with no like notification um but that was first time around but then like yeah i just ported that to other i mean it's really basic logic or like to trade those I mean, I was doing some sports stuff, not really anymore. But yeah, it was mainly those up-down markets. um
00:38:06
Speaker
And then, yeah, similar on Hip 4, like up-down there is the best of the same logic. I was like, is that... I didn't even see them announcing it on timeline. I was just like, I had a mate staying over and he's also like a trader at crypto firm. Um, I'm like, oh dude, have you seen hip fours out? And he's like, no, what the hell? So then yeah, just started.
00:38:29
Speaker
Like i didn't even think they had docs out or like I couldn't load their docs that day. and yeah So I just had to like a reverse engineer how all the functions worked. It's the first day and like that was pretty good for the first day. And then it got competitive relatively quickly after that. All the Polymarket guys moved over.
00:38:44
Speaker
found out but yeah I think Hyperliquid's great I just hope they don't get North Korean are you still doing like a like a lot of points farming or anything across all other the venues you have a view on points yeah I think like it's pretty good EV, even if the points that you farm are like mostly worthless.
00:39:06
Speaker
Um, just because like being on lots of exchanges, you find like, it'll just force you to like be in the weeds and you find out weird quirks and maybe that leaves for an actual profitable trade rather than just like, I don't if you want farm points at like a small loss, that's whatever. But like, if you're there, you might see something that's like, oh, hang on, this is a weird way this thing works. Maybe it's like not being priced properly. it can work something out here. So like I'm I always like jump on the exchanges and try around.
00:39:37
Speaker
Sometimes you find weird stuff that is very profitable, more so than the points. What sort of things do you look at to like find things like that? that Uh, like sometimes if you just like are collecting data, sometimes you'll see it. Sometimes you just see it in the order book just by looking at it, especially early on. Like that's how I saw that lighter thing. I just saw it. i was like, what the hell's going on here? This thing is weird.
00:39:59
Speaker
Um, So yeah, it sort of, but you're just looking for things that seem weird and then you investigate like 95% of the time it's nothing. And it's like actually not weird.
00:40:12
Speaker
Um, but then don't know, 5% of the time you find something like, hang on. I've seen something here that no one else has. I feel like you're way more artistic than like the average guest that I that i have on in in the way that you look for trades. I mean, I had a lot of quant people on now, but I also have like a lot of manual discretionary traders, and then they just like use whatever tool they use to do their trades. But you're like out there going through exchanges, looking at all their quirks, probably like scanning all their documentation and shit, and then finding out all the data to get out a little bit of edge.
00:40:45
Speaker
I have a really broad net, so like I'm always ahll find something i just go down a four-hour rabbit hole of like whatever and then most of the time it's nothing but sometimes it's something but yeah you just got to be like uh was it wc he always says uh explore and exploit but i think he steals that from ah someone else but yeah it's just like a lot of looking and eventually just mindset yeah yeah you mentioned that it It's like a, I was like, i don't know if I call him like intern, but he's basically like this young kid once who, uh, was on one of wc and Koala's podcast. Anyway, he like,
00:41:21
Speaker
I'm going to call him my intern, whatever. He's like a young kid and he's like been doing some cool stuff. And like at the, at the start, he was like trying to be super quantity and like to just click around and you'll find something. And like, I think now he's been finding some pretty cool stuff. Like he, he sends me in on, I sort of verify it. Sometimes I'm wrong. Sometimes he, he's wrong, but yeah, like that's sort of what you gotta You should be in the game and start trying things and you'll find something eventually.
00:41:49
Speaker
And once you find something, then you get hooked and then you're like, I've got to find more.
00:41:54
Speaker
so How did you like, ah how does it work your ah your intern relationship? How did you find him and what whats sort of like input do you give him? No, he just came on a, one of the podcasts, that he was just like, oh, think he was 16, he's pretty young. Like, think I want to be a trader, what do I do? I'm like, just message me, i'll I'll help him. So he messaged me on Telegram, been chatting ever since, and like, yeah, now he just, he just like goes out and finds things, and if he thinks they're interesting, he'll bring them to me, like,
00:42:23
Speaker
he found like a weird... He found, he basically found a bot in the order book that was like a dumb market maker on one of these like New Point, like, uh, Dexes. And sort of explained to him how he could just like exploit the bot, it was basically just penning every order, but the spreads on these books after hours were like 3% wide. So you could like post an order like two ticks away from the best ask. You could post a bid two ticks away from the best ask. And this bot would just penny to be one tick away from the best ask. But this is 3% spread. So now he's quoting like,
00:42:56
Speaker
if mid was at one and a half percent he's now quoting 1.49 above mid or his fair value mid just because he wants like q priority or whatever so then you could just like quote two ticks below he would penny you smash him one direction you pull your bid and then you just do the same on the other side repeat I mean, I don't know if you made much money doing that, but like, I think you said you made 10, a hundred bucks or whatever, but that is like a really good way to find something. Like if you've seen a bot doing something wrong, you do it manually. And then if it's still there and you want to keep going, you can quickly code up a bot to do this and go from there.
00:43:35
Speaker
How do you like ah even even get started in all of this stuff? You would suggest to be like this kid and just find inefficiencies in the market, look everywhere and stuff. Do you think having a TradFi background helps?
00:43:48
Speaker
I think definitely yes. Because like the initial hurdle of knowledge is to to just get to the basics is somewhat daunting and it's hard to know where where to start. yeah like where Where do you begin with all this stuff? kind of Yeah, good question.
00:44:04
Speaker
ah
00:44:09
Speaker
I honestly don't know. Like, i remember reading, um, a random walk down Wall Street. That's like a good way to like talk you out of doing it. I mean, I don't think many people should trade. Um, like the markets are generally efficient and it is really competitive and it's really hard to, to like make money and find ways to make money. There's, and if you're like,
00:44:31
Speaker
dedicated and smart enough to make money trading it's like definitely a waste of your time because you could be doing i'm sure you could be doing something more productive and making more money easier um so it's like that's why i'm like unless you're like really neuroticly interested in trading it's probably not even worth your time like you're there off just going trying some other stuff would be easier and it' make more money um but yeah like I don't really know, to be honest. You sort of just go, I mean, I started like on RuneScape back in the day, like being in the GE. That was my first, that was my trading pit.
00:45:07
Speaker
ah Experience in FIFA coins and then I did like some weird, in uni, weird sports betting stuff.
From RuneScape to TradFi: A Journey
00:45:13
Speaker
I like started market making on Betfair before I even knew what market making was just by like trial and error. i was like, yeah if I just...
00:45:20
Speaker
post a bet in LA and I can pick up passive flow at each side of the book and I better get rid of it and I can predict which horses are going to come in and which aren't and if it ah works better on like South African race six on a Wednesday than it does on like major Melbourne Cup races I can make money so it's like all the yeah i don't know you sort just got to be trying stuff out most things won't happen I think it's pretty similar to what WC said about like discretionary trading and all of that. Like if you're if you're good enough to do it, then it's probably a waste of your time anyway. Yeah, definitely. Unless you're doing it on Insinico Terminal, then it's
00:46:01
Speaker
Yeah, exactly. And they also, say like, you need a lot of capital to start trading. If you have no money, it's, like, not really worth it. Like, what, maybe you can make 100% on a hundred k but that's, like, hundred k a year. you You could go get a really good job for a hundred k year. Yeah. And it'd be a lot easier than making 100% every year.
00:46:19
Speaker
And can you scale that 100% to, like, 200K and then four hundred again and then a million? Like, probably not. if you can, like, then, yeah, it's worth. But, like, getting that initial capital from trading is, like, a really... I would say a bad way to start.
00:46:32
Speaker
You need to have a little bit of capital begin with. Do you even like care about the money aspect or do you just like do this for the love of the game? i do like the money because then I can do free stuff. But like I'm never gonna really struggle for money. like I can always go to get a job and survive.
00:46:48
Speaker
So I guess the majority of the reason I do it is for love of the game. I would say. Would you ever do something else? Yeah, I think I like it. Eventually in a couple years, i want to stop and then just go try something else.
00:47:03
Speaker
I don't know what. I, like recently I've been thinking doing a drone startup company, making military drones or something. I don't know. I know I have nothing, no idea about electrical engineering or anything, but like, ah this is the other thing I learned in TRIFI. You can just do things like, uh, lot of the time it seems really daunting to like do whatever.
00:47:22
Speaker
Yeah. Um, but it's always like somewhat easier than you think. Um, like when you're looking quantrating like, oh, everyone's doing like crazy stat stuff I don't understand or whatever. You can get really, really far with just like finger in the air line through a scatterplot kind of thing.
00:47:42
Speaker
Like, it's a lot easier than people make it out to be. Is it? is Is that what you get, like, paid hundreds of thousands for and in, like, these squand professional shops? Yeah, it's all a sign up to keep people away. It's actually really easy. But the thing is, I think it's so hard to, like, actually understand that until you've, like, been there and done it.
00:48:02
Speaker
Because I get i get the concept. I've definitely experienced that a lot in my own life. where it's like I think most things in life seem way more daunting than they actually are. Once you've spent a lot of time on them.
00:48:15
Speaker
But still for me, what like when when I think of all the Kwan stuff, it seems like extremely difficult and and complex to me. Yeah. But there's like a that's what makes it...
00:48:26
Speaker
like a good quant is someone who's able to do complex stuff and simplify it. I mean, like, guess the statistical way, like a complex model is like more prone to overfitting, like most of the 80-20 rule. Like if you think of something really quick and like generalizes the edge that you're trying to capture in a really simplistic way, it's going to be one quicker to implement, easier to understand and then like ah easy to but debug and then like you can go deeper later on but you get most of the way with really really basic stuff.
00:48:58
Speaker
How often do you find new opportunities that are like worth ah your time with with your size? is Is it like a weekly thing or like every couple weeks, every couple months or something or is it like dependent on if the market is like way way more active than usual or something like that?
00:49:15
Speaker
Yeah, like all of the above. Like back when the market, like DeFi was really active back in early days, like 21, it was like you could find two things a week, like two things a day. Like it was, there was so much stuff out there that you just click around and you find something pretty much every time you go looking. Now I like, it's a lot less obviously, um but they're still out there. I mean, something worse at time, maybe once, mean, it comes in waves, like I'll find nothing for three, six months and then I'll find five things in a week that are all somewhat related. Um, so yeah, it comes in waves, I'd say, but.
00:49:54
Speaker
Yeah, it depends. So you do need like quite quite a lot of persistence if you're like sitting there for a time and then sometimes just like nothing happens over months and then you just like yeah get some things involved but you have to keep That's why you have like your pyramid of ah strategies. Like you have your base ones, you just leave it in. yeah Good times are bad and then when you find something you really push the chips in.
00:50:18
Speaker
um Are those things like where you where most of your returns come from you would say? like in total or is it about like like what what percentage just like what I would say like the median of my returns come from there but then you get really big tail returns coming from like crazy strategies that last a month before the edge is gone I see so it depends like Yeah, if it's like a year that there hasn't been like much or I haven't found much, then yeah, like a bulk of my returns will come from like the safe stuff and Treadfire returns and crypto returns.
00:50:52
Speaker
But then like, ah yeah, you could find something that makes three years worth of TNL in a month. I see. Yeah, that makes sense. has Has it been good years so far this year?
00:51:06
Speaker
ah average yes so far i mean oh we're halfway now yeah somewhat average
00:51:16
Speaker
never i haven't found anything really cool yet i mean what actually that's why i found one thing really cool that's working quite well i guess you you won't talk about it because not and i don't know i'll talk about it later on would you ever consider like making your own fun uh possibly but i'd be like scared of running other people's money um but i know that's like a cheat code to just getting rich is charging fees on other people's money ideally i would just like be conf like i don't know work with some friends and just do my own fund at some point um that we all just have our own money in rather than so then if i lose i don't feel bad i'm fine
00:52:01
Speaker
it I mean, it is quite different if you like trade your own own money and then if you have like money from from other people, it feels a bit yeah different psychological burden. Yeah, exactly. za cle Blowing up like 30% Ben Ifrit's fund or whatever it is. 30% is nothing there. What the hell? i would have kept it going.
00:52:22
Speaker
Anyway. I guess he should have. I mean, i don't know. is it Is it that much in the front world? but it But it seemed pretty pretty brutal over like one finance Twitter. Like people were like going hard at him. It's nothing for a crypto drawdown. Yeah, it's easy I mean, for us it doesn't really seem that bad. It was also 30% like a yard and a half, I think. so Yeah. like ah half a year Half a billy.
00:52:45
Speaker
But I mean, blow blowing up is like... going to zero no usually yeah yeah blowing up is like my holding of thought coin minus 95 yeah yeah exactly that that's that's if that's like your whole account or you're like blow blowing up it's like you're going to 100 like let's say 30x average on far kind right now and then the market goes on another and another 10 and then then you're at zero that's going up but not like 30 percent but what What do you think about crypto as a whole right now? like in the The state of which the market is in since we've been underperforming and stuff and everything is kind of that and it's red new lows right now so obviously the morale is really really bad. Do you have do do you like care about crypto as an asset class itself like in any ideological way or are you only here to to
00:53:36
Speaker
exploit
Looking Forward: Crypto's Future
00:53:37
Speaker
and extract? Yeah, i so I somewhat do from an ideological point. Like I'm quite rogue in that I really hate governments and i want like my go bag ready to go with some Bitcoin if I need to, like a little bit, but I'm not holding it as like an investment as such. It's more just like a hedge in case like I get put on a no-fly list and I need to leave.
00:53:59
Speaker
Not that that's I'm at risk of that. At least of I don't think so. I'm probably on some list somewhere. But, uh, yeah, like I used to be more ideological about it. Um, I guess my idea of it probably ebbs and flows with like, if we're up or down and right now it's like sell over. So I'm pretty bearish.
00:54:20
Speaker
Um, except for hype. seems to be like the only pocket. It's like crazy. Cause the whole market's down except hype was just on a tear until this week, but Yeah, I don't know. Hype seems like the only place that is getting any sort of crypto adoption slash real like real world use cases with like, well, started with like the oil trade during Iran stuff. Like it's really caught mainstream attention there. And I think that was pretty good for it. Like a lot of people have moved on and there's like, um like the weekend 24-7 perps is like pretty interesting concept.
00:54:56
Speaker
It's good for me because I wish the market was open through 65. Really? Do you not want to take a break ever? No, i I do want to take a break sometimes. But yeah du it's an edge for me because i want to take a break less than ah most people. yeah I mean, it's pretty good. I'm i'm fully remote, so like I and work and live wherever i want. So I take my break as I go work in Spanish coastline for a week or two or whatever. I see.
00:55:26
Speaker
but ah does It's quite difficult to like... ah I think crypto, the only fundamental is kind of the price. And that's a like, as you said, like we're quite bearish because it's like, it looks bearish, the chart is bearish, price is low.
00:55:43
Speaker
But if it was like, like if if Bitcoin was like one hundred twenty k right now, i think you can still make all the same arguments and they still have like all the same validity about it like being not that good.
00:55:55
Speaker
But it would feel different. you know like it won be might feel better Or if it would be at 200. Everything could still be true, but it would feel like a lot better. And you will maybe maybe you spin up some more like random arguments about why it's actually good, and everything will be like better, and it goes higher. 100%. when is it 200? People start building crazy DeFi protocols, and that's like the real fun begins. Yeah.
00:56:20
Speaker
Do you think that will happen again? I don't know. your scams I feel like the Ponzinomics is like sort of ah dead. ah don't know, maybe it's just like the meta of like how it's perp dexes and like, I don't know. I hope it comes back. I hope some crazy stuff comes back. but like can you Can you build something, please?
00:56:41
Speaker
I'll build a rug protocol. As long as it's like creative and it like lasts maybe a couple of months or something. It's not financial advice, not not not initiation to rug people or whatever.
00:56:56
Speaker
If someone builds a rug broker, I will pull my money in it just to feel something. I mean, at this point, yeah, it's pretty bad. You can just like buy Hyperliquid, pray that it doesn't get dragged on by Bitcoin. But even equities are not looking that well right now. Yeah.
00:57:12
Speaker
The doom is posting the AI bubble pop. Who knows? I think it's just kind of annoying that the industry is like a bit boring. That's always the the thing in in bear markets. Like you have no, there's like nothing really to do. You know, there's nothing really cool to to play around with or like, yeah, hold on to a bit where you can be like, hey maybe this is like the next thing or this is like at least fun to do or whatever. It's just, yeah, this is all kind of useless, unfortunately.
00:57:38
Speaker
Yeah. Yeah, exactly. i It was just all perp dexes at the moment. It's basically the only thing to do. do you think prediction markets can be bit more interesting in the future?
00:57:49
Speaker
Like they can grow more or? Yeah, I think so. But like, don't know, I feel like, I mean, it's just gambling, right? And It's gambling with more steps. It's like this... It's like a legal arb that like all these buy now, pay laters came in with, but they didn't have to be regulated like credit card companies because it was a credit with more steps.
00:58:12
Speaker
I don't know. I feel like prediction markets are quite overhyped. like I hear the bull cases were like, oh yeah, you could like financialize everything. But like, dude, I don't know. that this is yeah and's like And it's just for insider trading.
00:58:25
Speaker
Yeah. But maybe cryp crypto is also kind of just for insider trading. so yeah it is that is true
00:58:35
Speaker
guess honestly in a whole you can probably say all of the market is just for insider trading just for like different levels of where you're at in the insider queue so you just need to be like the right the correct level yeah if you can't insider trade on Polymarket that's a trad5 market so it's just a skill issue you just gotta get elected to office pretty much
00:58:59
Speaker
well Is there anything else that you that you would like to talk about ah that we haven't mentioned yet that you think is interesting? now we ticked off on pretty much everything I would say that I think is interesting.
00:59:12
Speaker
Anything to shill, anything to shout no nothing to shill, nothing to shout out. I got nothing going on, i'm a pretty boring dude. um if anyone's got any cool drone stuff like I want to build like a fully AI controlled drone send it my way but yeah other than that not much that's like the the challenge if someone listens to the end of the podcast they will DM you about drones yeah yeah no one's gonna DM me about drones no one made it this fast but they well thank you everyone for for listening and thank you very much for coming on ah yeah thanks for having me it's been great
00:59:52
Speaker
Yeah. Goodbye, everyone. See you.