In this episode, we are joined by Jump Crypto President Kanav Kariya, who leads a team of 140 inside one of the largest market making companies in the world.
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Show Notes
Introduction
– Kanav is the President of Jump Crypto (@JumpCryptoHQ)
– Jump Trading is one of the largest quant trading firms in the world and moved into crypto ~6 years ago
– Grew into what Jump Crypto is today with 140 employees
– Jump Crypto has been trading, building and investing in the space
– Ledger: Who wins in a cage match, Alameda or Jump? Kanav: Depends on the rules!
– Crypto was a trading problem to solve at first, sandbox environment for people to play with without messing up existing systems
– As the space started to grow and as DeFi emerged there was a similarity to traditional environments and they got more involved
– Own crypto on the their balance sheet not just when making plays
Intern to President
– Jump is a very flat organisation usually three levels at most away from the top
– A lot of freedom to work on things and push it further with more resources for what works
– Kanav worked early on crypto projects that performed well and it led to getting his position and still building out the team
– All in, all of the time. Always looking for engineers and ops people
– Recently brought on a CMO
Sophisticated Competition
– Jump and most traders are playing on different time horizons e.g. seconds to minutes
– Smart contracts and aspects of DeFi are less competitive as firms are still apprehensive
Trading Systems
– Some are highly automated others have more manual intervention. Alpha building process to build prediction models then plug it into an execution system
– However there are things about the markets the models aren’t aware about that someone with pulse on the market would know
– Mature risk management is in place taken from Jumps historical experience. A lot of it is hard coded in to prevent people putting on over sized positions
– Not a lot going on with options markets, much smaller than everything else. Just because it hasn’t worked in the past doesn’t mean it won’t so will continue to watch
Narrative Surprises?
– Built the first highly electronic OTC desk but the narrative didn’t play out to the expected extent. Institutional narrative was slower to play out – a lot of red tape to get through for institutions and waiting for regulatory clarity but believes it’s still going to happen
– How long Uniswap V2 has continues to be incentivised continues to be surprising
Wormhole
– CertusOne built the V1 and they were acquired by Jump. Wormhole connects 7 chains now transferring a lot of different information. Governed by 19 guardians, of which Jump Crypto is one
– Wormhole had a 120K ETH hack recently
– Developer noticed some discrepancies and they all jumped on a call to confirm the vulnerability then it was all hands on board to deal with it
– Jump Crypto made the decision to backstop the funds
Hopes for the future
– Phantom and Solana pay type stuff
– You see the uses on twitter, looks great
– No on knows what a seed phrase is! We need better UX
– On the gaming and metaverse side – i just want to have fun and be able to play a game
– On the research side – ZK seems promising would like stuff there
FINAL ALPHA
– Harness the power of asymmetric upside
– If you can see asymmetric upside and then place a lot of bets, you gmi
Music by GiovanniPickle