Jump Crypto President Kanav Kariya on the Wormhole hack, market making, and crypto outlook

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