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Insilico Terminal Podcast Episode 3 - Alucard
57 Plays20 days ago
Alucard shares his journey from early mistakes and risk lessons through bull & bear markets, into HFT, orderflow, and mean reversion strategies—plus insights on DEX growth, delta-neutral yields, and advice for newcomers.
00:00 Background, getting into crypto, early mistakes and lessons
07:00 Bull & Bear experiences, learning risk management, Luna, FTX
10:30 Moving into HFT, latency/arb focus, division of engineering vs strategy
18:06 Trading strategies, mean reversion, orderflow
23:00 When scalps become swings; liquidation lines, trench sizing; avoid true bagholding
27:00 From years lurking to posting himself, Bunker/mentors, how he filters real signal
34:39 Current DEX landscape, latency, maintenance margin, UX, why DEX share grows
51:10 Delta-neutral yields, cross-venue spreads, advice to newcomers
Follow Alucard: https://x.com/AlucardTrades
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Transcript
Introduction to High-Frequency Trading
00:00:16
Speaker
at the beginning I would like to ask you how would you introduce yourself? How I would introduce myself? it
00:00:27
Speaker
I introduced myself as a trader, of course, I have no business with the development side of things, engineering side of things. I am HFT trade analyst and trader in my daytimes as well, cause I use basically automation for most of the trades and then i have discretionary vision as well.
00:00:54
Speaker
I still use that skill. So yeah, I'm basically a trader for the last six years. And before that, I'm a little of old guy, like Hart.
00:01:06
Speaker
Not much editor as old as him, but I'm old as well. So I'm a bit of calm and bit of smooth guy in my trades as well.
00:01:19
Speaker
Like all of these stressful and intense days are just best for me.
Journey into Trading: Physics, DJing, and Blockchain
00:01:27
Speaker
but So how did you get into trading in the first place?
00:01:32
Speaker
It's a funny story. Although it started as a bit of dramatic as you can imagine. like here Before Covid, like i was I was studying at the best university in my country.
00:01:46
Speaker
I was studying physics, but you know I jumped into the nightlife when I was too young, and then I was a DJ for a long time. and Then COVID hit the world.
00:02:01
Speaker
The first jobs that affected from COVID it was nightlife late jobs. Yeah. more on the world and Then I started like feel like and ah unemployed because I have no income anymore.
00:02:19
Speaker
And I'm almost in my late 20s and you know, life started to be a little bit of boring and depressing for me. Then one of my close friends started to trade and he was in his last year at his degree.
00:02:38
Speaker
He was studying comp computer science. So he started to discover blockchain technology. He made me this discover as well. and After two weeks of my start to read and experience things, I started jumping to perp trade.
00:02:54
Speaker
And here I am. It's been six years and I spent almost six days every um every week across the green. That's most part, basically.
00:03:07
Speaker
So you started in 2019? and Round about that? Yeah, late 2019. Okay.
NFTs and Cryptocurrency Trading Experiences
00:03:15
Speaker
And then you immediately started trading perps or? ah Like I had this, you know, it was the boom of the NFT times.
00:03:23
Speaker
It was that idea. I saw what was the name of the go People in the normal platform at the Instagram. It was my first catch of the blockchain, let's say.
00:03:37
Speaker
I asked my friend, how is this blockchain technology works? He showed me Binance and then he told me just buy Solana, just buy Ethereum, you'll be good.
00:03:49
Speaker
After two weeks, I was up like 20% in my first investment. And then I jumped into the NFTs and Perp trades because, you know, I had this limited inventory because I was unemployed for a long time.
00:04:02
Speaker
And basically, per I saw Perps as huge leverage into your inventory in the beginning. I have no risk management past. I don't know anything.
00:04:15
Speaker
You know, it's just inherent like, it's almost the same approach with everyone in the city. So, but I have this advantage in the beginning.
00:04:30
Speaker
My friend was used to getting to CT before me like for six months he knew this heat map charts etc so I had like I had like turbo in the beginning let's say so he helped you to get into it what he helped you to get into it he like taught you how to trade basically he showed me the tools He told me a couple of things about CVDs, about OBVs, and then he left me in the space, and I was trading, let me try to remember, I was trading mana and sand at that time.
Learning Trading Tools and Strategies
00:05:16
Speaker
I liquidated overnight, and it was the day that I... decided to go into perpetrating for like 12 hours a day. Because once you look at it, you know, things change.
00:05:30
Speaker
And if you have enough OCD, you start to explore what did you do wrong? And how can you do better?
00:05:42
Speaker
And then, I started to use one minute charts before knowing it was the crucial thing. And I started to monitor charts every day.
00:05:56
Speaker
i started to read and try to understand what is going on in the T-charts at Agro.
00:06:06
Speaker
Yeah, basically, he didn't give me any strategy or anything at all, but he just introduced me the tools very early so that I was not only using the exchanges charts and new couple other things except of the candlestick charts, basically.
00:06:23
Speaker
I see. So how how long did it take you to to get ah profitable? Or where were you already kind of profitable back then? How did that go for you?
Challenges in a Bear Market and Risk Management
00:06:32
Speaker
Like, because I basically burning born into...
00:06:36
Speaker
bull market and it was just too quick. I thought I knew a lot of things in the beginning, but then micro conditions changed, beer market started and I see the dark side of the things for a long time.
00:06:55
Speaker
Obviously my worst day was Luna day cause wasn't short in the beginning, but I didn't know how the tech works exactly at that time.
00:07:07
Speaker
So I switched to long thinking it's the lowest of the low, deepest of the deep, but it wasn't the case. So I lost my 60% of the inventory at that day.
00:07:20
Speaker
And after that, I started to build up more automat automated strategies for my discretionary trades, let's say. Like I...
00:07:32
Speaker
I discovered better were the better part of the risk management and how can you stay market neutral while trying to position yourself directional.
Avoiding Losses During the FTX Crash
00:07:47
Speaker
But Lumaday taught me one thing and then that one thing saved me from FTX crash, which was, You know, SPF was pretty shady before the FTX crash.
00:08:02
Speaker
He was using FTT for pumps and dumps for a long time. I remember like eight weeks straight at specific day of the week, at specific time, he was just tweeting about it and my kid was pumping and then he was dumping right right after 30 minutes.
00:08:22
Speaker
So I was training at FTX and when I saw this, shay behavior I withdraw all of my money and it was the team that saved me entirely.
00:08:33
Speaker
Oh, really? Yeah. That was good timing, I guess. What? Can you say that? That was good timing to to withdraw your money then, I guess. Exactly, exactly.
00:08:45
Speaker
I switched to Binance and then, yeah, basically a year later Hyperlikit showed up. I was much better. And during that time after FTX crash, I joined this HFT business.
00:08:59
Speaker
and I started to understand my infrastructure a lot better as HFT analyst and
00:09:10
Speaker
I, lately, like i then I discovered Hyperlikit because in the HFT business, as you know, you need very good APIs in order to onboard the other players, other big players.
00:09:25
Speaker
And Hyperlikit seems like they are doing a lot better job than other DEXs. And ramped up on operations on there, and it helped us increase our inventory.
Collaboration on High-Frequency Trading Strategies
00:09:38
Speaker
entirely to a different level with their airdrop of course so basically are you still working together with your friend that introduced you or who are you working together with on the HFT side actually I'm still working with my university friends oh nice yeah it's good that you have in real life friends even it's better if they are your friends before you're blockchain crypto, uh, so I'm working with my friends that are, that they are my, like 50% of the life of my spending.
00:10:24
Speaker
That's nice. So I trust them. Yeah. Yeah. So, uh, they, they're implementing the technical parts and you're like, uh, more of the, the person that gives them the strategies or how how do you work together?
00:10:38
Speaker
I have a pretty good engineer friend of mine. And he's building latency arbitrage bots, let's say. And his coding skills are very good.
00:10:51
Speaker
So that we have unlimited power at the latency side. And then ah used to have quant friend of mine. We are not that close anymore.
00:11:03
Speaker
So I basically work with an engineer friend of mine. And it basic basically works like discover
00:11:14
Speaker
venues, assets that we can trade. And ah basically tweak our spreads, quote sizes, how we trade, where we trade, how should we quote, those kinds of things.
00:11:30
Speaker
And that's it, basically. Did you just like teach all of that to yourself? How did you how did you get into that? Do you have some some study background?
00:11:42
Speaker
women My background relies on physics. The only thing i understand is probability and mathematics before the crypto and trading world.
00:11:53
Speaker
And basically, I built my entire knowledge out of Banker. Did you? Yeah. Because it's like I'm one of those in-circle reply guys, you know?
00:12:09
Speaker
Yeah. Me too. Yeah, I can imagine. I can imagine. All of the good guys are almost graduated from Bunker lately. Man, I don't know. Like, there are a lot of good things in the Bunker, especially in the video side, the SMBH and Axia features.
00:12:30
Speaker
video series are pretty good for order flow of knowledge. And of course, even like strategy that Swift mentioned in Medium is crazy, man, about the liquidation trade, about life catching Yeah.
00:12:48
Speaker
Yeah, for sure. I also learned a lot of stuff from there. Like most of what I know know is from from the bunker, I guess. Do you trade frequently, daytime?
Trading for Enjoyment: From Scalps to Swings
00:13:00
Speaker
I do, yeah. I trade. ah It's not like the the main thing that I do, but I i mean, since I work for the terminal, I use the terminal quite a lot, if I'm like familiar and whatever, and I do trade when i when I can, yeah.
00:13:17
Speaker
So you're one of the guys who know execution is important if you used to use the terminal as well. Yes, obviously. since i I mean, I like it so much that I even work for it. It's definitely very like i've I've never really traded Otherwise, I think, before, like when I started properly trading, when I really said to myself, yeah, I'm going to to take some time to like put into it and learn it. I immediately started using the terminal because I already knew about it and I never really used exchange UIs or whatever.
00:13:51
Speaker
but um yeah, the terminal is definitely a very good tool to use yeah if you trade, obviously, with ah without chilling it too much. I discovered terminal a little bit later than my beginning, like after six months, let's say.
00:14:04
Speaker
Because in the beginning, I was using Exchange UIs. It was shitty. but And then I discovered terminal, and everything resolved. And there was the swarm orders. There was the scale orders that exchanges mostly didn't have at the beginning of times, like in 2020 2021, they didn't have advanced executions.
00:14:27
Speaker
So it saved me a lot. Yeah, for sure. Definitely. Same same for me. Do you still, like um since you mentioned that you do mostly like HFT stuff, do you still execute a lot manually as well? or I still execut execute, too. I love the argument side of things, and I still trade daily.
00:14:50
Speaker
And I'm one of those guys who trades if he feels like, if you know what I mean. Like, I don't really need to s scalp every day. okay But when I feel like it and if I feel like I will enjoy it, I jump into the market and trade. So it's something that you enjoy doing.
00:15:11
Speaker
Yeah. Because mostly hold saving trades last year and this year and reduce the frequency of the scalps.
00:15:23
Speaker
because I feel like I don't need that tension and stress anymore in my life at this level. So you mostly just ah trade out of enjoyment now? For Sculpt, yes. Okay.
00:15:35
Speaker
And the other part is more in the HFT and the swing trading side then? Yeah. Like I spent most of my time with HFT things and for swings, you really don't need to chart things a lot.
00:15:50
Speaker
Even like one, two hours of session is enough. And for daily scopes, if I feel like it, I mostly use five second charts lately, especially. And my whole career built around one minute charts in the past. So what's like, do you use the classic, you mentioned the classic knife catching strategy, is stuff like that what you do mainly, like mean reversion and stuff like that? Mean reversion stuff, yeah.
00:16:21
Speaker
like It's a bit more complicated than the other guys. I use four screens separately. As all of us, I use Xpro to discover sentiment around the city.
00:16:33
Speaker
And then Exo for advanced order flows. Basically how risk metrics work around, like what is the open interest, what is the delta for specific candles.
00:16:46
Speaker
And I use it in the Delta cluster mode to see exhaustion and absorption. in daily candles, like in daily charts within one minute candles.
00:16:57
Speaker
And then I have this spaghetti charts to detect what I want to trade. What is the strength of the day? What is the weak sticker of the day? Stuff like that.
00:17:10
Speaker
And I basically try to
00:17:16
Speaker
ah basically try to create my entries around volume levels. And yeah, basically these tools.
00:17:27
Speaker
When you look at the spaghetti chart to identify what what you're trading, what what exactly do you look for? Like the the strongest coin of the day or the weakest coin of the day? or so be honest, I use spaghetti in one minute as well.
00:17:41
Speaker
And then if a liquidation happens, you know, basic knife catching happens, and if I miss the knife catch, I try to find what is the strongest ticker after that liquidation.
00:17:55
Speaker
And if if the day is that kind of day, like if there's a strand of the one coin that pulls 50% while others crabbing mostly, which means that either there is a manipulat manipulation or someone wants it,
00:18:11
Speaker
too bad. So after that, I opened that ticker in ASO to identify key levels inside Boolean flows and order flows.
00:18:25
Speaker
And then once I decided my entry level and my structure for that trade, I start to execute either with limits or basically to apps.
00:18:40
Speaker
So you're basically like looking for the coin that bounces the hardest when liquidations happen? Exactly. Because either with experience you can understand it or you you might read it read this theme somewhere CT.
00:19:01
Speaker
In liquidations, mostly BTC grabs after the liquidation, but the strongest bounce continues to be strongest around the entire market, because when it catches a bit after liquidation,
00:19:18
Speaker
It means that someone is moving it, right? And then that someone cannot execute the out exit too quick. So he will write the ticker a little bit more.
00:19:32
Speaker
So that's when you want to trade. goes So you basically just jump on and and ride along with them. Yeah, yeah, yeah. I basically chased the let's say.
00:19:46
Speaker
ah trans beltter let's say That makes sense, yeah. So that's like your main main strategy when trading lower timeframes. Do you also trade mean reversion when you when you do swing trades or what is your strategy there?
00:19:59
Speaker
It's actually, once you discover order flows, I used to have like, okay, this will be my swing entry because I use less leverage than my daily scalps, you know, and then you this will turn into swing trades.
00:20:18
Speaker
I will hold these for two months. I'm mentioning those kinds of traits. When I enter a trait like this, but then things changes with the new information that market brings, then I don't see any reason to hold that swing position anymore.
Adapting Trade Management to Market Conditions
00:20:35
Speaker
And it immediately turns into sculpt trait. So I try to have my entry in a best possible way, but then if that best points start to become a bad entry, I immediately read out, I don't care.
00:20:56
Speaker
So I can go into a trade as a day trade, but it can turn out to a swing trade that I hold for three months. But it also can be A swing trade entry that turns into a sculpt trade.
00:21:12
Speaker
So it depends on the flows that market brought to you after you enter a trade. Isn't that like psychologically stressful though in some way? i feel like for my myself if I like um compartmentalize it a bit more that it's like like having different accounts for the kind of trades that I that i do, like the timeframe of the trade, and it's like easier to to differentiate between them.
00:21:38
Speaker
I feel like it's a bit stressful stressful if like any trade can turn into like any iteration of trades. What do you think about that? If my liquidation level is not ah entirely... like If I have any written in my liquidation line, then it's okay to turn that trade into a longer time frame trade for me, at least.
00:22:01
Speaker
Because I can pay the funding for a quite long time without caring about it if I'm at the paying side. But...
00:22:13
Speaker
Once I know that I will not be located from that position, then it basically turns out mentally, it turns out into spot check for me, basically.
00:22:28
Speaker
But what would you also like, ah but what do you do then against backholding, I guess? Like, would you backhold something to zero? Like, when do you decide to to cut it for good? About it, I don't play trenches with size.
00:22:42
Speaker
And then with my size for trenches, it's like a gamble size with like four digit money. And it's something I don't care about.
00:22:54
Speaker
So if I back hold and it goes to zero, I don't i don't fucking care about it. And mainly at perps, I trade coins that have value in it.
00:23:09
Speaker
What I mean is basically trade majors hype And the coins that has reflexivity narrative around it, like fart coin, paper, things like that. So if I backhold, I know that that shit will not go to zero. I see.
00:23:26
Speaker
So you take stuff that at least has like some interest or some narrative or whatever behind it. Yeah, yeah, yeah, yeah. It's a big part of the journey. As I said, I use Xpro and like Twitter is Lately, Twitter is not that insightful.
00:23:43
Speaker
Everyone says it was used to be a lot better, it's etc. But I remember in 2022, it was almost the same. It's just new classes, more concentrated, and the OGs are more faded away in the city.
00:23:58
Speaker
And that's why people feel like it's a lot worse. But just people become, the entire community to become younger. so ah How did you first discover CTE?
00:24:10
Speaker
Because of my friend, is again, like he he was into CT for six months and basically at that time, at that era, you can just go to someone else's profile and check who is following that guy and who that guy follows.
00:24:28
Speaker
And ah just go to my friend's profile, open up the followings and then follow all the guys. But after that, I spent a lot of time in Twitter reading things, what are people saying?
00:24:44
Speaker
And then I started to take people, like this guy is legit, what he says is true. He mostly knows what is the current market environment, et cetera, things like that.
00:24:56
Speaker
And after a long time, now I have these concentrated. very very very tight tutor list when i go there i see almost everything what people talk about what is the current narrative what is the secret of the day etc things like that how how long have you been around on city because i feel like i've only started seeing you this year i think yeah i was like in stealth mode for a a long time for like five years i only read and sometimes very rarely i replied to
00:25:33
Speaker
ah account that I see as mentor my mentor. And then during last year, last December, I decided to join the city as content creator, let's say.
00:25:46
Speaker
Because I started to feel like, after one point, I started to feel like I was entering a trade and then i was seeing my position at my mentor's port portfolio as well. like The guys who I admired started to post their positions after I also entered that trade.
00:26:11
Speaker
And then when I started to realize, okay, I started to become a good trader. I started to become, I started think like how my mentors think.
00:26:24
Speaker
When I feel this is happening more frequently, I decide, OK, I'm at the point that I can write and I can teach people. And I decide to join City. Interesting that you that you lurked for this long and then only came out of the shadows quite late, I guess.
00:26:41
Speaker
Yeah. but I think I found your account quite intriguing when I first saw it. So that's why that's also why I wanted to talk to um Do you have like many, many but what what do you think about CT like compared to how it was before? I guess you already said that like the OGs are a bit more reserved now compared to back then, right?
00:27:04
Speaker
like we used to have guys like Haseka and
00:27:10
Speaker
lights who and even in silico was sharing strategies back then. Yeah, true. Like it's nothing, but nowadays no one really shares really a strategy.
00:27:23
Speaker
and Only no nomads post 500k Bitcoin is destiny. That's the only alpha. is So, but yeah, but then if you have key points, keywords,
00:27:36
Speaker
that you know you can search around. Like if you go to in Silico's profile and search for certain keywords, then you will find bunch of bunch of information, bunch of insights about markets. yeah And then if the environment has changed for Bitcoin, for example, for Italian maybe because of the CME flows.
00:28:01
Speaker
And then you can also, apply exact same strategies as most of the altcoins, especially at the illiquid ones. You know, and then iPhone is still there, but for those who know how to search for it. That's a very, very good way to put it, I feel like. it's I remember when I was there back then, it felt like people, like when I think about it right now, people shared used to share a lot more strategies and stuff like that.
00:28:33
Speaker
which I don't really do that much anymore. and I also I've also done the same thing like I've searched keywords a lot on the yeah Trips profile just to like learn stuff and whatever, because even if like the environment changes, ah the there's like I don't know how you
Exploiting Market Inefficiencies
00:28:53
Speaker
could call it. I guess some wisdom to the markets in there that is like timeless and then you can still use to adapt and and adjust to the current market conditions.
00:29:06
Speaker
And it's still very useful. Exactly, man. Exactly. Like, even like, maybe this will this will close the opportunity of positive trades for me the current environment. But even now, like I'm I do floors at the Azo for the most liquid cohening lighter.
00:29:26
Speaker
And since lighter is the most retard activity venue right now, you will you will see inefficiencies.
00:29:37
Speaker
For example, I was feeling floccy today. And at EXO, you will see flows. yeah Like it moves like 1%. And at lighter, you can still execute manually to trade those gains.
00:29:50
Speaker
Because the price difference is still there. Oh, really? Things like that still happens. And you just go ah you just get a... Work for it. You just got to experience it, open the charts, monitor it, play with small size just to experience if your idea will come true.
00:30:12
Speaker
like Things like this, you'll still find these inefficiencies all over the market. So there are like ah price dislocations between central exchanges or whatever and lighter, for example, on coins like that?
00:30:27
Speaker
Yeah. I see. And then you just ah basically trade to bring them back in line, like arbitrage. Exactly, exactly. And this is just one thing, you know, like if you want to gamble with your money for just for fun, knowing that you will win slowly but surely and you can just go and play for this i'm actually very curious about that from you because i think you are someone that talks a lot about farming the the perps taxes that are out there currently as you have done with hyperliquid before i guess um what do you think about the current landscape of of dexas like compared to can can they compete with hyperliquid
00:31:11
Speaker
The ones that are not hyperliquid, I guess. To be honest, lately, like for this new meta, for new Perp Dex meta, I always cons consider myself as a trader. I never consider myself as a farmer, but...
00:31:28
Speaker
Hyperlikit was something different for me, like because after I started to trade, i never see like I always tried to trade at Nexus because you know it's the ethos of the crypto.
00:31:41
Speaker
and The more decentralized, we more like it. yeah and then And we all don't just don't like places like CZ. And then because of it just because of it, I was always trying these test trades at every new decks.
00:31:59
Speaker
And then Hyperlikit turned out the big one. And it's it was just a spark on my career. And then around this February, some guy from CT came to me like, if you want to trade, you can just discover this one as well.
00:32:18
Speaker
There's this new kid in town. And I started training there little bit later because I was waiting for the API integration. Because you know, like. On Lighter, you mean?
00:32:29
Speaker
Yeah, because I didn't want to spend my time farming the points at Leiter and wanted to start directly from API. But I waited like three weeks, four weeks, and then I really realized that they will not give me the API integration too quick.
00:32:46
Speaker
So I need to start doing something. And then i was I knew that I was training BTC a lot better than the alts if I would sculpt for like five minutes of trades during the day, just to push the volume and bring some bips into the book.
00:33:06
Speaker
And I started pushing a lot of volume on the Bitcoin, BTC. And yeah, like I don't i still don't consider myself as farmer, but for this PerpDex meta, it's something that will change the,
00:33:25
Speaker
crypto world entirely. Cause I feel like there was BitMEX back in the days and everyone was trading there. And then Binance showed up, everyone switched to Binance. And then FTX came out, everyone started to use FTX because, you know, collateralization at the FTX for Perp was a little bit of different than the Binance.
00:33:48
Speaker
And it allowed players to use their Every asset just as collateral as perp. This was something quite interesting and people liked it.
00:34:01
Speaker
And it took a lot of market share. But then because of they do shady stuff with Alameda, FTX just crashed out and people start to lose their faith and lose their trust on the centralized exchanges. I remember that a lot of users just withdrew their money to on-chain after FTX crash out of exchanges.
00:34:27
Speaker
you know I'm sure that you remember the those days as well. And with Hyperkit, everything has changed. I know that they have a lot less, but later than they should have.
00:34:40
Speaker
I know that there are order maintenance issues and latency issues lately. But they just opened up a new paradigm. And I guess the endgame is will be at least the jack's share at the overall ah market share will drop significantly and these new properties will take the launch out of them interesting basically very interesting take do you think they can even compete uh on like the lower time frames i feel like that is still where sexes have like
00:35:19
Speaker
an advantage? It's like way more convenient and like smooth to to trade on the sex if you trade on lower time frames? I don't think it's safer, but you know, like because of different mechanics, DEXs are hard to use if you use high leverage. I'm saying this because Jaxos have their own insurance funds just to protect these liquidations, like just to hold the liquidation cascade in a tight level.
CEX vs DEX: A Comparative Analysis
00:35:50
Speaker
And at DEXs, they don't have the insurance fund and they just bring the liquidity with their own market making boats.
00:36:01
Speaker
Which means that since there is no insurance fund, once you opened up a high leverage trade, this means that your maintenance margin will be a lot bigger than what you used to have in Binance, for example.
00:36:15
Speaker
If you use 50x leverage, let's say, at Binance, it means that you need to you need to have 0.2%, let's say, as maintenance margin.
00:36:27
Speaker
But it's hyperluxed with the same setup. you will probably have like 0.8% of your margin for maintenance margin.
00:36:38
Speaker
There is a significant amount of change in terms of maintenance margin, and this affects your liquidation line, and then this affects your whole trade setup. This is the only problem that I saw as onboarding users, but you know you can still work around with it. like you just try to focus on little bit of less leverage.
00:37:03
Speaker
If you used to use 50x, then you can just switch to 15x and resolve. But yeah, if you have inventory problems, if you have less stable than what you should have, if you trade it with small size, then you might go to Jaxos just to trade with most of the leverage you can find.
00:37:28
Speaker
I think the the margin requirements is definitely a valid point, but I was more so more thinking about like the the latency and the speed if you execute like on very low timeframes, I guess, because I feel like DEXs are still a bit slower than centralized exchanges at this point.
00:37:45
Speaker
I think Lighter is kind of, isn't their a proposition to be like very fast? you have any opinions on that? Since we didn't just implement Lighter onto our setup, I just don't have the insights on that side, but they say that they are much faster than Hyperlikit and I tend to believe it. okay Like if you eyeball the explorer of Lighter, you will see that they execute too fast.
00:38:13
Speaker
like if you just eyeball hyperscanner and lighter scanner side to side, if you compare them, you will just see the slight difference.
00:38:25
Speaker
And in general for HFT, JeXes are still reliable and trustable in terms of like continuation and in terms of durability, because we are experiencing latency issues at Hyperliquid lately.
00:38:43
Speaker
for the last long week. And we started to have a lot of order rejections, we didn't change even though we didn't change anything. But we also know that it's happening because of server mode. And we just tend to believe that Jeff and his team has experience and skill to deliver and resolve the issue.
00:39:13
Speaker
And it's a long, long-term game. you know it It will not happen directly, but people in general just exhausted from jacks cabals. And I tend to believe this theory because we all know, like,
00:39:30
Speaker
their listings, their liquidity, their stop-nose runs, their liquidation runs. We all experienced this stuff back in the backking days, and it's too obvious that this will not happen in the DEX world.
00:39:46
Speaker
and And maybe this will take time, but I again believe that slowly but surely DEX will take the entire pie eventually. The only thing is that OPSEC from my point of view, and because I'm thinking about it, and the reason is basically experienced a lot of a lot of defy issues when I entered the space.
00:40:16
Speaker
Like there was breach exploits, there was hacking exploits. So if operational security will be secured in the DAX world.
00:40:29
Speaker
And if nothing happens, and then people will trust DAXs and switch the site and onboard the entire on-chain meta. Because it's better, you know, like it's more fun to trade at DAXs.
00:40:46
Speaker
You have these new tools to track down positions. We had this James Wins saga back in the days, two months ago. It was too fun to monitor and trade against it. like it yeah Just by itself, it's offered entirely a new strategy for the people who knows how to trade it.
00:41:08
Speaker
real do you think ah it's going to be like Do you think any of the newer ones will compete with Hyperliquid? Or is Hyperliquid the winner for now and will be for like the foreseeable future? Or do you think if like Lighter i don't know improves and drops their token or whatever, then they will also have like like t will take market share from Hyperliquid?
00:41:33
Speaker
We just cannot say. the ah Okay, let me say this. If you go to Lighter Foundation website, you you will just realize it's VC-back. So there is VC in it, and we just don't know how it will be the airdrop distribution, how it will be the tokenomics of the lighter token and then if they will distribute most of the tokens to the community these are still in question so hyperlipids what hyperlipid did was entirely new things like they airdropped most of the tokens in the circulating and then they announced
00:42:12
Speaker
almost 97 percent of buybacks with the fees and then they introduced their blockchain there are bunch of good projects built around hyper evm like hyper liquid entirely opened up a new paradigm and they will lead this new paradigm longer than what we can expect. is But I tend to believe this new DEX is not as competitive to Hyperlekit, but as a new steps, like Light has this privacy feature in it and it's more fast than Hyperlekit, faster than Hyperlekit.
00:42:50
Speaker
And then this feel this will offer them a spot for what Bybit has at JackSite. You know, like Binance is pioneer and Binance is the leader, but There is also Coinbase, there is also Kraken, there is also Bybit, there is also OKEx.
00:43:09
Speaker
So they also create a lot of volume. We don't know if it's worth volume or not, but we know that there's liquidity and you can basically go there and trade hundreds of millions of dollars positions.
00:43:21
Speaker
And this means that We just don't need to have just one exchange and we we can still have other exchanges. And it might have, they might have market share against Hyperliquid, against Jaxos and it's okay.
00:43:39
Speaker
Like we need to have all of them to be honest. And other than Hyperliquid, other than Lighter, as you all know, I use Extend, Extended. And I'm one of the first guys who onboarded there.
00:43:55
Speaker
lot of extents because basically I use Maru as one of my mentors. And he's working on unified margin system there, which is very new things for Dexworld as well.
00:44:09
Speaker
And it's exciting. and then And then basically on chain stock exchanges, like WestJest just started trading on the mainnet.
00:44:26
Speaker
This is new, and this is entirely different meta to the market code. Now you can just trade stocks on chain. That's with concrete OB or the CLOB structure.
00:44:43
Speaker
And yeah, I guess think view things will get better on the DEX world. Yeah, we will see the you'll see the collapse of the Jex in the near future. Do you think they think that will happen?
00:44:57
Speaker
I'm not sure if that's so close. I feel like that's a kind of a vision that we we have had in this space for a long time. ah I don't know if I'm like, um i would I would go with you in saying that the their market share will decline, but I don't know if I would go as far as say collapse.
00:45:15
Speaker
Although, I don't know. We don't know um what will happen in the future. But I agree with the take that it's like Hyperliquid is maybe like the Binance of the DEXs and then other ones yeah are like other SEXs that we have now.
00:45:30
Speaker
yeah i think that makes a lot of sense. I just don't say this DEX collapse, CX collapse as short-term idea. Just in the near future, maybe in the mid-term future, maybe, but in 10 years of span,
00:45:45
Speaker
we will see a lot of changes in exchanges.
The Future of Exchanges: CEX Decline and DEX Rise
00:45:49
Speaker
Basically, everything will be on chain, I think. And with this new base app, even if it's directly related to Coinbase, we know that Americans will onboard it via that app, right?
00:46:05
Speaker
And that is also, in the theory, that is also on chain.
00:46:11
Speaker
So it will be another thing. And even with this new meme meta that started after the FTX collapse, you can see that whole investment approach to younger generations are shifting to more digital world.
00:46:30
Speaker
What I mean is they started to trade meme launchpads, Pond.fans started, people started to gamble there. And it's all on-chain, right? Mm-hmm.
00:46:41
Speaker
None of the fixes have the pie, and it will just ramp up day by day. But I wonder if the if the decentralized exchanges will have the same capacity as centralized exchanges, like just from ah speed and I don't even know how to code to call it, like speed and execution standpoint, if they can compare it to to the centralized ones.
00:47:09
Speaker
I mean, and in terms of execution,
00:47:14
Speaker
the um like most important thing is liquidity and Hyperlekt has enough liquidity for sure. You can trade hundreds of millions of dollars of positions at majors.
00:47:26
Speaker
Like James Bean opened up Billy of position and Mark didn't move while he's executing. It's okay. But in the latest terms, you're right. Like Hyperlekt had times that their speed was very, very, very close success. But yeah, lately, as I said before, lately they start to this server loading load issues. And yeah, of course on chain execution has its limitations in terms of speed and in terms of transaction per second basically.
00:48:07
Speaker
but we will, and I agree that we will still need sexes, but in the long long long term, I don't think speed will be the issue.
00:48:21
Speaker
You know, new technologies are started to
Technological Advancements in DEX
00:48:26
Speaker
emerge. Lighter use a little bit of different approach. They use zero snacks, zero knowledge proof, and also they execute,
00:48:39
Speaker
trades as parallel and then sent the block as a batch to ZK as B2. And I'm not entirely see myself as expert of blockchain executions, but I know that if these new perp dex meta can attract a lot of new users and capital into it, then I also know that technology will improve and people
00:49:13
Speaker
start to resolve the speed issues and latency issues that comes with it. And, you know, it just needs technology to work and around of the meta. I mean, I guess if we go into the future in like 10 years, then there might be enough. Like 10 years is quite a long time, especially with technology. So there might be enough and advances where the speed, as you said, won't be won't be issue issue anymore.
00:49:40
Speaker
Exactly. Exactly. and I don't know what you think about it, but I see PURPS as the core of the system.
The Role of Perpetual Contracts in Crypto Trading
00:49:52
Speaker
Memecoin trading meta can change, everything can change, but at PURPS, you usually trade most liquid assets with much deeper liquidity.
00:50:04
Speaker
and Since Threadfire just started to onboard Bitcoin and Ethereum, volatility has decreased a lot, especially on the Bitcoin.
00:50:16
Speaker
And, you know, just because of the liquidity and because of the leverage that's offered to you, even at the taxes, these people will eventually, way or another, onboard themselves onto the perps, perp trading, and there will always be volume at perps.
00:50:40
Speaker
And this means that there will always be revenue for our teams. I agree. I definitely agree. I feel perps are probably the best, one of the best things that came out of crypto.
00:50:52
Speaker
And I mean, perps are kind of the reason that the terminal even exists. So obviously it's ah very core part of of like what we are doing.
00:51:07
Speaker
um But I wanted to ask one one more thing, actually, because I think you're also in the in the Hyperliquid ecosystem a bit. Like, do you do you think there are any interesting projects there?
00:51:20
Speaker
Is there anything that is like catching your attention on the Hyper EVM or anything like that?
Exploring Hyper EVM Projects
00:51:25
Speaker
To be honest, like Since I just experienced myself in perpetrating, have a lot less knowledge about blockchain technology itself.
00:51:38
Speaker
I started with COVID around three years ago. ae experienced from the first sense, which means that i tried to use all of the chains that I can find.
00:51:49
Speaker
even Injective, even Celestia, I tried to DeFi even there, believe me. And then this helped me understand what should, like what must be in the ecosystem as blockchain DeFi.
00:52:08
Speaker
And I just know that liquidity staking is big big part of DeFi because you can Go full DJ, right? You can, for example, for kinetic, you can just go to kinetic, deposit year your hype and borrow against your hype.
00:52:29
Speaker
you will get khype. Then you will, you can land that khype into hyperland, for example, and then borrow USDC against it and then go buy hype again and keep this loop till you have enough leverage in your system.
00:52:46
Speaker
no This is offering a little bit of different leverage loop for you than perps. And I liked this mechanism as well. So I can say love lending, borrowing platforms. I love liquid staking.
00:53:03
Speaker
This means that I love kinetic and hyperland. I also use Felix since from your testnet days. And basically I try to discover what Liminal is doing because I'm also doing funding with automation and They are doing funding ARP between spot and perp.
00:53:24
Speaker
What I do is a little bit different than that. I don't do spot and perp trade. And I try to understand what i what they are doing. So I'm holding test inventory in there.
00:53:39
Speaker
So that's all for me. like And other than that, lending, borrowing, liquid staking, that's all. Mm-hmm. So you you do more cross-exchange funding arbitrage then if you don't do like Spon and Perp?
00:53:56
Speaker
you can You can say cross-exchange funding arbitrage plus liquidity mirroring basically, or you can search it as liquidity provision.
00:54:08
Speaker
And in my end, what i need is volatility and volume.
00:54:15
Speaker
Preferably volume that's coming from retail flows because it creates a lot of price depreciation between exchanges. And if you have fast boats, that means that you can catch retail flows and price discrepancies.
00:54:39
Speaker
I see. I guess that makes sense. Lately, I saw that even even with mono execution perhaps you can just execut execute small amounts and grind like 300 apis yearly and believe me every day there will be new ticker so this means that you just need to to web in to a position and then around 18 to 24 hours later you just need to top out and enter and another again and there will be always
00:55:11
Speaker
funding ARPs that will offer 300% APR yearly.
Funding Arbitrage and Career Reflections
00:55:17
Speaker
So in the end, end of the year, you can end up with 4X gain, just stay data neutral, executing each day, just one month.
00:55:32
Speaker
you You're leaking a lot of alpha here. Yeah, yeah, the days, man, like in theory, there is
00:55:41
Speaker
Maybe I can send you what I look at in DMs after the meeting. yeah there is There is an opportunity. Because once something is new and there's no the there is not enough liquidity, this means that if you can work out of it in a smart way, you will be the one who squeezed the plus AV out of the train.
00:56:05
Speaker
Because there will be always guys who tries to farm points, who tries to do something and you will just be the counterpart of them. It's the thing if you just squeeze the water.
00:56:21
Speaker
That's a good way to look at it. I think ah this is a good good point to to come to the end. Is there anything else that you want to to say that you want to talk about? I can say like... Or is there anything you want to share at the end where people can find you or anything like that?
00:56:39
Speaker
People can find me on Twitter for sure. as ultimate rates And the last thing I want to say, if you just to inspire new guys,
00:56:52
Speaker
if you look at the guys who made it in the end you will see that in their launch you will see that Almost 90% of almost all of them liquidated the portfolio before. she is almost more work than Almost all of them tried to stay around. Almost all of them had the OCD, enough OCD to understand what is going on at the markets.
00:57:19
Speaker
And almost all of them made it out of nowhere. So just stay around. Just have the passion in yourself. And even if things look
00:57:32
Speaker
like worst, believe that there will be a opportunity for you and you will do it. Just stay around and try to educate to yourself.
00:57:45
Speaker
And yeah, that's all. That's very good advice. Just ah all you need to do is stare 16 hours a day at at the screen for two years and then you might make it.
00:57:57
Speaker
Yeah, I mean, it's mental, I know. I am damaged a lot. I know I'm not the guy I used to be. like But in the end, I know that I used to think about my elder era and I used to have this stress and tension on me when I think about my older ages, even though my family had enough to retire me for like till my end, let's say.
00:58:27
Speaker
but Now I feel like ah can do everything I want. I can go everywhere I can. Because of my past, because of my social past, like I used to i mentioned that I used to do DJing, because of my social past, I have still communication skills and I can resolve yeah everything I want in my day-to-day life.
00:58:49
Speaker
And this means that i will not be the guy who stays all of the time in the city when things get a lot better and i see myself as retirement now.
00:59:04
Speaker
so Just have of the social life around you. Even though you will be mentally ill at the end of the day, there will be guys, friends all around you, real ones, if you keep your communication level a good level.
00:59:22
Speaker
That's very this good advice and very, very inspiring. Thank you very much for for talking to me today. i Yeah, of course, man. I said that because you know most of the guys who've seen a lot of uh screen time with the city seems like they are alone and they are rich but they don't have any friends to go around go to vacation and i just wanted to say it's not the case like you can do yeah for sure for sure i agree well thank you yes it was a lot of fun thank you very much today yes