Speaker 1A lot of protocols were like onboarding with us as a market maker because they knew that, okay, like if my token goes down, then at least people just blame it on the internet.
Speaker 2Before we dive into the show, I want to share a bit about Altitude. Altitude is a global business account built on stablecoins, but fully connected to traditional fiat workflows. You get local banking details, international transfers, corporate cards, and free on and off ramps. For CFOs, stablecoins made payments faster, but slowed down everything else. Altitude changes this with invoicing, bill pay, 5% APY, and accounting integrations, all tied to your stablecoin treasury. I first met the team behind Altitude in 2021, and they were working on their first product, Squads Multisig. Fast forward to today, and Squads has become the default multisig on Solana, securing over $15 billion of value for over $400 million. The team has brought the same level of rigor and thoughtfulness to Altitude, and I encourage all listeners to check it out. You can learn more in our show description below. Well, Evgeny, thank you for coming today and taking the time. Lots of ground to cover, but maybe to start off with, I think most people listening to this have probably heard of Wintermute. They've probably worked with you guys in some capacity or read some of your posts on X, but just to help set the stage, what is Wintermute today?
Speaker 1Yeah, good question. And yeah, thanks for having me. It's always nice to be in New York. Look, Wintermute currently is the number one proprietary trading company, well, crypto-native property trading company in crypto. We operate across three major business lines, so centralized exchanges, so all the usual suspects there that you can imagine. Then DeFi business is very strong. That's something that we've been working on for a long time. So, we've been working on a lot of other things. We've been working on a lot of other things. We've been working something we've been doing since 2020 and finally otc business where we trade both spot and derivatives over many many different tokens and actually recently expanded into moment tokenized expertise and commodities as well so those are basically the three core businesses and then we have a bunch of things around it like ventures like research um and like a few other things that we are actually close to announce uh next week so but yeah like those three things are the
Speaker 2core at a high level sort of what did you guys start with because obviously the stuff like the otc's came came later on uh the incubations came later on but at its core what were like the what was the core dna of winter mute when you you first started it well i
Speaker 1think there is there is a thing we started with and there is a saying that we actually started making money with so those two things are different so very ironically um the things that we started with back in the 2017-18 was basically being market maker for tokens right um and that's actually how we sold winter to first seed investors that's how we like tried to make money initially and but the funny thing was when we actually got the business up and running like around 2018 it was a bear market and the market making services were not really in need anymore so nobody could really pay for them so we pivot basically to more traditional prop trading in majors like Bitcoin, Ethereum, etc. And that's basically where we started to make money in those tokens. But yeah, it took us a while to, well, first create this first directions and pivots properly.
Speaker 2Got it. And to just give a quick sense of scale, you guys have a global presence now. Sort of how large is the team? Sort of what is the global coverage look like?
Speaker 1It's about 150, 160 people currently across three offices. We have a few people remote, but like vast majority of people in the office. So London is the biggest ones. And we have Singapore office for the last four years, I think. And as of last year, New
Speaker 2York office. Very cool. And yeah, we'll dive into sort of the whole journey from like inception to today. Thank you for painting a picture. And maybe just to get started, like we'd love to understand Evgeny as a person, sort of more about sort of you growing up. What was your childhood like?
Speaker 1Well, I was born in Soviet Union. So that was like 1994. But yeah, more relevant part is, I guess, 90s in Russia when it became like democratic and yeah, more importantly, basically like not communistic, but more like a lot more market driven. Mm-hmm. And my favorite kind of thing about that period of time is it's basically the closest in my life to how crypto operates as well, because it was a very wild time. Like this 90s was a very wild time. Yeah. So there's a lot of opportunities to make money, but there was a lot of opportunities to yeah, get completely wrecked in many, many ways. Maybe even worse than crypto. Like there are a lot of scams, for example, there's like a lot of pyramid schemes being advertised on TV, et cetera, et cetera, et cetera. And basically I was, that was definitely sort of like the years that formed me formed me properly as a person because I was basically raised in that pretty, like, I wouldn't say like, it was like super poor environment, but like it was challenging. The first years of 90s were like pretty challenging because people were just adjusting to, you know, very, very new conditions, like the market driven economy is that people like fired, like they cannot rely on government to provide jobs anymore. They need to find their jobs. My father basically switched from, yeah, basically straight. It was pretty much almost like straight from uni. Like he basically started his own business and it was also a pretty like important thing for me because I kind of seen him building his own business, which was initially pretty successful. And yeah, he had like, I think it was like a hundred something people to basically, yeah, kind of like as the economy became like more normalized, like as opportunities were reducing and as things became like more normal, like basically his business started growing and decline and finally just died. Um, but to me it was, it was just so very formative because you see how much opportunities there is. You see the like ultimate freedom, like to be who you want, to build what you want. And that's basically, yeah, the closest to crypto, like over my like nine years in crypto as I've ever seen actually. So it was a very interesting deja vu experience in a way for me.
Speaker 2And when you were, you were obviously young, sort of during the 90s, you were still, still child teenager. Um, were you like aware of sort of how big of a change it was that you were, like, Hey, like now is the period of massive opportunity that people would look back on in like 10, 20 years as, as like a seminal moment or, or do you, this is a long time ago, but do you remember sort of what you were thinking back then?
Speaker 1I think like as a child, you basically see the progression primarily in wealth. Yeah. Like I remember, like I keep, like I always tell the saying that like, like in Russia, but like we don't celebrate Christmas, we celebrate new year, but it's like pretty much the same saying, like you just get present sons of the tree. And like, in 1992, I had a, like this kinder chocolate egg under the tree and I was super happy because I never seen it before. And then, yeah, as my father's business progressed, like those presents became like cooler and cooler and cooler. And you basically see this like wealth progression in the single giving family. And we started going to like trips and we started going abroad and it was kind of like visible what you can do if you're successful. Yeah. But, uh, but it was like a, uh, like a other side to it, as it became less successful, then it became like more and more about, okay, like how do we start saving money as a family? How do we start like, like scale down things? And that was also a pretty interesting revenue factor. Like to me, I think like, when I was starting VentureMute, so like, yeah, I am jumping a bit forward, but when I was starting VentureMute, it was definitely like, I definitely had some, yeah, I don't know, minor or major PTSD from that because like, I've seen my father being successful and not being successful. Yeah. And when I was like, before starting VentureMute, I was pretty successful. It was, I was doing like working in somebody else's company. Like it was going fine. I could have stayed there for like years and years and years, got really nice bonus, et cetera. Uh, but yeah, instead I, I just decided to jump into the unknown and yeah, risk a lot of stuff. Um, but yeah, like succeeding in that, like it definitely sort of like broke the cycle for me, like, okay, I did something, yeah. Where my family like could not succeed. So that, that was pretty important part.
Speaker 2No, it makes sense. And, um, yeah, definitely can see some of the parallels between, uh, sort of emerging markets in, in crypto and, and, and in the, like in the last 10 years. And, um, I wasn't around, but yeah, there must've been like many market opportunities. Um, but yeah, that was pretty important for me. There's a lot of opportunities in the, in the nineties as, as people have written about. Um, so you ended up studying abroad, I, I believe in, in, in the Netherlands sort of was studying abroad, going like working in another country, something you always wanted to do. Was it something that just ended up happening? Um, what was your mindset at the time?
Speaker 1Not really. I mean, I guess what I was studying in Russia, like in Moscow, I started for my bachelor degree, I started at the Higher School of Economics, which was basically single most, well, it was actually the most libertarian university in Russia back then, but I think it was also one of the most libertarian universities pretty much in the world back then as well. So, like, studying there, like, I couldn't really appreciate it fully, but we got properly, like, I think it was, like, definitely more libertarian than most US colleges, for example, especially now, like, with all the, like, yeah, stuff, like, more, like, left-ish stuff that's happening on campuses. Like, it was, yeah, it was, we got just properly indoctrinated in, like, market is good, yeah, like, communist, well, not communist. Not even just, like, communism is bad, but just, like, the way capitalism creates wealth and the way capitalism is just superior in every single thing, and, okay, there are externalities, but, okay, that's what government is for, to handle those externalities. Yeah, we got, like, properly, properly indoctrinated in this, and, like, I think I read Ayn Rand, like, years and years later, like, I understood, like, where it was all coming from. Yeah. But back then, it was just, yeah, just the sound. It sounded very proper, and, like, it sounded, like, it basically augmented a lot, like, my, like, 90s experience. Got it. Because, yeah, like, I started in university, like, in the 2000s, like, beginning of 2000s, and that was, like, a pretty big thing. And, yeah, that's basically where I met my wife, as well, and it was, like, honestly, it was mostly her who was pushing us to go abroad to study. I was, like, perfectly fine where I was, but she wasn't, and she, like, she didn't really I think she was kind of, like, very, how do you call it, forward-looking, like, she basically anticipated, like, a lot of bad stuff that was happening in Russia, and she was, like, okay, it's good now, but it'll get worse and worse and worse, so let's actually explore other things. And so, yeah, we kind of, like, both applied and got accepted and moved to the Netherlands.
Speaker 2Got it. And we'll get to the Netherlands in a second, but higher university, so it's, like, super libertarian. Was it self-selected? Like, people, families that had more, sort of, capitalist, like, libertarian ideals, like, wanted to go there, or it seems like this university must have been, like, a newer
Speaker 1one. It was new. Like, it was pretty well-known because it was, like, this, basically, the head of that university back then, like, I think they have a different head now, but the head of university back then, he is basically a husband of, I think, current ministers. Finance or minister of central bank. I think minister of the central bank, a woman of Russia, Olivia Neibulina. I, like, think that's, if I, I hope I didn't butcher her last time. But, yeah, it was, like, this technocrat part of the government already back then, and that's basically, like, a lot of those people are still around, actually, helping the current government. Got it. And people, kind of, like, knew that, okay, this is where you can learn real economics, because, okay, you can go to Moscow State University, but Moscow State University, like, didn't really, okay, it adjusted a bit, but it was still, like, okay, it was not teaching you, like, political economy anymore, but it was still, like, okay, it was not a proper thing. Well, higher school of economics was, like, the closest, basically, the perception was that it was the closest you can get to the Western, Western, yeah, Western university. Because, like, I have three kids now, and they're, kind of, choosing for the older one what he's going to pursue. But one. And, like, very funny thing that I find currently is, like, in 90s and, well, 2000s in Russia is you basically wanted to be one of the two things. You either wanted to be a lawyer or economist. Oh. And, like, the science was, like, definitely pretty low. Not prestigious at all. Yeah, not pursued, because, basically, like, people in 90s, they say, okay, like, okay, like, in 70s and 80s and before, like, okay, you could work in an institute. And you would have, like, research institute, and it would have, like, a pretty good life. You'd have a good career. Like, government would take care of you. And then 90s happened, like, well, Soviet Union collapsed, and basically all the scientists became, well, unemployed and pretty poor. And so studying physics, for example, would be, like, one of, like, was perceived as one of the, like, well, more, like, not forward-looking things you could do in 90s. And now I feel like it's the other way around. Like, okay, if you study economics or law, like, with all the. AI stuff that's going on, like, it doesn't sound like the smartest thing you could do, possibly, while physics is just almost, like, the only proper thing you can choose, because it just signals that you are a really smart person.
Speaker 2Yeah. Yeah. Yeah, no, I think in an age of AI, like, getting, studying some of the natural sciences and getting close to the, as core, as close to the physical truths of the world, definitely is more interesting. I'm seeing this, like. It's a recurring theme of just, like, growing up and exposure to markets and exposure to, sort of, business building. And, yeah, like, it just seems to be a theme that's, sort of, consistent. And you end up in the Netherlands. How long were you there? 11 years or so.
Speaker 1So we did, like, one year of master's studies. And then I, then afterwards, I go, I go to October and that's, that's where I was for, like, exactly 10 years.
Speaker 2Got it. And with Optiver, for those that don't know, like, what, what is Optiver, sort of, how did you end up there?
Speaker 1Basically, Optiver is one of the, you know, one of the biggest drop trading firms in TratFi. They're particularly strong in options, but they generally do everything, pretty much everything. Like, thousands of people across the globe now. Like, but when I joined it, when I joined Optiver, it was still probably about 500 people globally. And in Amsterdam, where I was, it was. There was maybe 300 people there. So it was, it was big, but it was still, like, felt like a kind of, like, late stage startup vibe. Like, it was still, you could still do a lot, basically, without, like, too much red tape, without, like, asking too many permissions, as long as you were ever making money and, like, taking crazy risks, basically.
Speaker 2And, and was trading, like, working at a market making shop something you, like, knew you wanted to do, sort of, while you were still in school? Like, how did you actually? End up, sort of, coming right out of college and, and working at one?
Speaker 1Yeah, not at all. Like, I was, basically, when I went to Netherlands, I started finance. So I switched from economics to finance. Yeah. Well, switched, like, it's pretty close, but yeah, it's. More, more practical? Yeah, more practical. It's like, it's almost like a cliche. Like, I, I started finance and my, my wife started marketing, but at the end, like, at the end of the day, what I got from. From that, like, investor status, like, I started reading a lot of books about, like, basically, yeah, what, what I would call, like, finance fiction. Yeah. So stuff like Liar's Poker, Barbarians at the Gate, like, things, like, books about, like, either people describing how they worked in real companies or, like, basically, reading how real companies work and then I thought, okay, like, yeah, investment banking sounds really cool, but also this trading thing sounds pretty cool as well. And, like, the main theme of Liar's Poker, right? Is about a guy from a really irrelevant degree making his way in the, in the bank and he progresses there, he makes a lot of money and then at some point he gets, like, disillusioned with the whole finance and he quits it and decides, okay, like, I'm going to do something else. Then again, in case of Michael Lewis, he just started writing books. SPF apologist. Yeah. Yeah. Yeah. No, like, yeah. Kind of, like, fell off for me.
Speaker 2Fell off a lot.
Speaker 1Yeah. Yeah. But, like, Liar's Poker was great. And what was great for me was I read this, okay, so you telling me, okay, I can go work in finance, make so much money that I will get disillusioned with it, challenge accepted. And so I, yeah, then I started searching for finance jobs and I quickly realized that I would not make it to the investment banking because, like, my grades were just, like, not good enough. Yeah. I didn't think I was, like, the right mentality for it as well, necessarily. But what I stumbled upon was Optiware. And I kind of fell in love with it straight off the bat after I just went to the website. Yeah. It was, like, very minimalistic back then. And they literally said on the website, like, we don't care about your degree, like, what you have, like, whether you have bachelor degree, master degree, whether you have maybe even any degree at all, as long as you're smart. And you can, like, make money for us. Like, it's fine. Yeah. And that was, like, so refreshing, so, yeah, very meritocratic, very refreshing and very, like, interesting. And I applied. It was basically, like, three rounds of very, well, on one hand, basic, like, on the other hand, like, pretty hardcore math tests, math tests, which I passed. And then interview, which I passed, and that was it. So it was, like, a very fast process. Yeah. It was a very straightforward process, but it felt very meritocratic. And it was.
Speaker 2Got it. And at Optiver, you were there for over 10 years. Yeah. Yeah. from like mid-2000s to sort of mid-teens in the 2010s. How did the world of market making slash HFT, whatever, however you want to categorize it, how did that change? Because again, I don't come from the world, but it feels like that industry is constantly evolving. Like how did you sort of see it change during your time?
Speaker 1Yeah, I think when I joined, it was still kind of like the dawn of electronic trading. So like it was already happening for a while, but like people are still kind of like making like better and better.
Speaker 2It wasn't perceived as like a prestigious or.
Speaker 1Oh, it was very niche. Very niche, yeah. People had no idea what October was. People had no idea what market making was. Right. I don't like, I think now people, especially like with Jane Street results. It's the most competitive.
Speaker 2Yeah. The HRT intern class of, yeah.
Speaker 1No, like people know it a lot now, a lot more now, but yeah, Paxana. It was not known at all. Right. And I think like the main trajectories back then was, okay, electronic trading was the same, but like the senior traders who sort of like taught me how to be a trader, they were much more focused on like tactics, how to trade, I don't know, opening and closing auctions, like how to actually read the news and understand like what can happen to a particular, like I don't know, European stock. Like basically very tactical. Yeah, tactical things, while a lot of this like HFT, a lot of like all the trading things were still like being developed like pretty much then. Got it. So then that was like a very big push from basically automating a lot of those like tactics, automating all those insights. And then, yeah, what happened over the next, over the 10 years that I was there, yeah, basically this big push towards like actual high frequency trading was. Right. Yeah, first like very high speed like the signals like over Atlantics and microwave towers. And like when I was exiting, like they started already testing the radio wave stuff. So it was basically going like super, super hardcore HFT, which I kind of liked back then. But I, when I exited, like it was like one of it was actually one of the reasons why I quit Opto because I really didn't enjoy. It was very, it was like massive and very like, how do I put it? It was basically like a very costly race for no benefit to humanity, I guess, at all. It was like all those HFT firms was paying like tens of millions every year to get like. Marginal differences. To get like very marginal, like microseconds and nanoseconds and didn't really matter. And exchanges were on it as well, because exchanges just wanted to market. They wanted to market makers to trade against each other and make a lot of fees, and they still do. But it just didn't, like it was all about just like technology race. It was not necessarily about like being smart, but it was about. Infra. Like investing in infra more and more and more and more. And I just didn't enjoy it.
Speaker 2Yeah, it makes sense. How much of that sort of maturation that you experienced firsthand in traditional argument making, like how much sort of has it. Has the crypto experience the same thing since you started? Like where are we at that point? Do you feel like the market's getting a lot more efficient? Like are we still a long ways out? Yeah, I basically
Speaker 1went full circle there. So yeah, it was very inefficient in like 2020, 2021, because there were a lot of opportunities to make money. Like there were way less opportunities. Like it's a lot more competitive on the speed side of things. It's a lot more competitive on just like how smart your algo is. Yeah. It's a lot more competitive on the speed side of things. Yeah, it's a lot more competitive on just like how smart your algo is. Yeah, it's nowhere near as it was when I started. So it's a lot harder to start your own like prop train firm and crypto now compared to
Speaker 2like 2020. Do you still feel like there's still like the intellectual component in crypto that is required? Because you said one of the reasons you left Optifor was like it was all infra and all sort of mostly marginal gains sort of. I feel like crypto isn't quite there yet, but I'm curious. You're much closer to it.
Speaker 1I think like with Optifor specifically, it was also because it was Optifor's main thing back then. Right. They were mostly focused on speed. So for them, like the smartest of algos like back then didn't really matter that much. Got it. So like there was some push towards that as well, but what matters a lot more was, okay, do we have the fastest link between Chicago and Frankfurt? Got it. Like that was like the single most important sign. Everything else was. Yeah. Okay. It's kind of like nice to have, but like if you are slow, then you will just lose in one of those big ticks and that's the thing that mattered. Like I think it's, yeah, I'm pretty sure Optifor like progressed a lot from there. So like, I don't think they only focused on speed, but yeah, still being fast is very
Speaker 2important. Yeah. Okay. So you were at Optifor for sort of almost a decade and you were touching all asset classes. Yeah. Like stocks, bonds, commodities.
Speaker 1I was basically an ETF market maker. And as an ETF market maker, you do. Like at the end, we did touch pretty much all asset classes because there are ETFs on pretty much every asset class. We started with. I started with easy stuff. So basically it was ETFs on the major European indices, US indices. And then I expanded into more like sector indices, like European banks index, for example. When after we did that, we moved to the commodities. We moved into emerging markets, we moved into fixed income and FX. And so basically by the time I left, yeah, we pretty much traded
Speaker 2ever since then. Nice. And what was like the first inkling of the idea of Winner Mute? Obviously you mentioned that like you'd gotten a little bit bored at Optifor. Speed was like the only competitive metric to compete on. What was like the moment? Or first idea of what Winner Mute would, of like starting a crypto company?
Speaker 1Yeah. I had no idea I would start it from Optifor actually. Oh, okay. I quit Optifor like for a bunch of things. Like one, I didn't like the speed sign. Optifor grew from this like late stage startup to like pretty much a proper corporate with quite some red tape in general. Like I was quite. Well, yeah. Well, maybe, I don't know, like you're somewhat politically savvy, I don't know, that I was able to get like enough resources for like ETF trading from the management back then. But I knew that, okay, if somebody came up with, well, for example, idea of trading crypto at Optifor, like they would get shut down by multiple control departments, which they did like years and years afterwards. And basically this bureaucratic component, I really didn't enjoy. And finally, I've kind of seen the growth. I've kind of seen the examples of basically senior Optifor traders quitting Optifor and basically pretty much without any exception doing one of two things. They would either do nothing, like they just made enough money so they just sit on the couch and like, I don't know, do some startup investments or like, I don't know, do some like chill stuff, or they would start like a mini version of Optifor in a niche that Optifor was like just not interested in, like, I don't know, train some single stocks in, I don't know, Italy or something, I don't know, like, or Turkey, stuff like that. Like basically like building those mini Octobers, like some in Samsung grew pretty successful, like actually, I don't know, I don't know the complete statistic, but like lots and lots of companies- Came out of Optifor. Groups, successful corporate companies came out of Optifor. Yeah. Got it. Yeah. And like once and it did really well is actually created this like a lot of successful traders that quit and build something. But when I quit, I was, I kind of wanted to break the cycle and like do something completely different. And I just finished my MBA as well and kind of, kind of once I finished it, I kind of coincided with me, wanted to do something different, which I thought would be entrepreneurship most likely. And so we decided to move to London. We moved to London from Amsterdam and I started searching for things. So you just knew you wanted to live in London? Yeah. Because like I, I basically, well, we both realized that we like, well, big cities are the things that like we enjoy the most. Like we have those, it's not like we like to go clubbing or socializing that much, but we just like the idea of big cities because that's where just most opportunities are, opportunities, culture, et cetera. And Amsterdam is just, at the end of the day, is just one big village. Right. Like it's, it's very cozy. It's very nice. It's like, I still miss the biking aspect of it. But it's, it's just a big village with not much going on at the end of the day. Like there are some corporates, there's obviously like a lot of like initiative firms, but that's pretty much it. There's nothing else. And London is, yeah, as close as you get to New York on that side of the lake.
Speaker 2Got it. Okay. So, so you moved there really without. Yeah. Without too much of a plan, maybe. What did the first few months look like in London?
Speaker 1First month I was just doing nothing. I was enjoying my, I don't know, it was the first time I was not working. yeah sabbatical but yeah it didn't last long because my yeah marina my wife she did not enjoy me being on sabbatical for too long so she said okay like two months is enough like no now go in search do something yeah go do something um and i started searching for things so i started basically i started looking at uh london startups i did not like like vast majority of them they were either all like kind of either basically stupid ideas that i didn't like or they were so late stage that i didn't really see that i would make like a big impact if i would join them yeah which was not necessarily the right assessment but okay i am where i'm just how you felt yeah yeah and then i had the periods of like a couple of months where basically my wife back then she was doing um she was working in uh consulting yeah and so i decided to go try my life as well and so you you you you you I applied to a bunch of consultant firms as well so i actually went through this process of preparing for consulting interviews and like you know this like case study stuff uh which was very yeah bizarre and interesting crypto
Speaker 2would be very different if you had gone if afghani had become a
Speaker 1consultant yeah no it was it's a really yeah it's a really interesting process like i wouldn't like i wouldn't recommend it but it's an interesting process like i made it to the final round of uh and i didn't make make it thankfully um but yeah it was it was interesting and then i was like okay i tried this i tried this and meanwhile in parallel to that i was actually okay like i have to preface it like uh october was very like on the bottom level like on like within on the individual level people were very critical of crypto like always so like people were discussing bitcoin as just like some stupid ponzi thing and so i started reading about bitcoin i think like first time in 2016 but mostly on the technology technology level so yeah i was just like yeah blockchain or bitcoin people initially yeah then i moved to london i was like okay i can actually start like see what it's all about and then i downloaded coinbase app and bought some bitcoin and it while writing the tube and then literally like a week later doubled the price so it was like beginning of two weeks and i was like okay i can actually start like see what it's all about and then literally like a week later doubled the price so it was like beginning of two weeks and i was like 2007 2017 bull market yeah um and it caught my attention because yeah like another thing that i didn't enjoy about stratify markets is they were pretty they were pretty boring most of the time like you could have things like uh brexit or presidential elections where it would be very busy or you know like financial crisis and then 2008 uh but most of the time it was pretty boring uh so like days were like not super excited excited so like days were like not super excited excited and and i with crypto it was as around like it was pretty clear that the utility was there so you'd probably have like a few quiet days during the year and like most of the time it's going to be excited it was going to be exciting and kind of like once i was done with this consulting bit i was like okay i have no idea what to do i know how to do market making and prop trading and this crypto saying has like enough volatility for me to do something with it so i'll just try to do this to get marina off my back and that i'm doing something um so i found um so i found another acceptable guy who would become our first cto then i found uh john uh like six months later and basically like the three of us kicked
Speaker 2this thing off very cool um and like were you really what were you guys what did the actual day-to-day look like was it um were you like actually market making between exchange were you just taking directional sort of trades like what was the initial focus early on yeah
Speaker 1like initially i think the first two months uh the first month i would say like first month i was just sitting initially i was sitting waiting for my cto to code some things um and at some point i was kind of and i built like some beautiful spreadsheets or something and i was like okay i'm going to use this to be ready when he builds things and then at some point i realized okay like i can wait for more can i i can actually start coding some things myself and i learned how to code in python uh which was yeah pretty cool like it was again very new experience for me because the top server back then people like traders would not go into coding that much like they would do some regex stuff like how to process log files more efficiently but that was pretty much the extent of it like people not people would not try telgos but i thought okay like i can actually accelerate a lot of things by yeah writing code myself which was a very yeah pretty
Speaker 2fun experience nice and and in terms of the projects that sort of you and the cto were working on was it like mostly market making between exchanges or what was the kinds of strategies that you guys were what was the initiative started with like the
Speaker 1first two months of the first month the very first algo we built was market making on kraken based on kraken so just archit making the token like bitcoin on kraken right yeah it was like a very dumb algo but yeah you need to start
Speaker 2with something okay that makes sense gotta start somewhere um and so this was in like 20 late 2017 when you first started like over the next call it year or two johan joins um sort of other stuff happens what would you say were there any like seminal moments uh in like 2018 2019 that sort of looking back on you you regard as especially important your shift the trajectory of winter mute
Speaker 1well i think like the first thing was we raised the first captain 2018 okay so we didn't like a first like we did our seed rounds um 10 million valuation so it was wow kind of like back then it was pretty much it was pretty much like 10 million valuation so it was pretty rich because that's like 10 million was sort of like this sweet spot where most of the y combinator startups were raising back then now 40. yeah now it's now it's quite different but back then like 10 was a like i did my research so like 10 sounded like a pretty good yeah the starting point and honest like i think it was uh i think it was back then pretty rich because like okay like i had some experience but like i had zero experience with crypto uh i didn't really know what i was like getting myself into right um but yeah we raised this first capital like it was less than a million um just
Speaker 2angels or did you do
Speaker 1uh it was all angels so we tried this like we tried going through the venture route but no one basically venture investors didn't understand well they didn't understand crypto most of them and they didn't understand market makers okay and yeah market making business was not it's not like your typical venture invested business in the first place so it's not like your typical venture invested business in the first place so it's not just this interception was very hard so where we got the money in the end were a bunch of angels uh with pretty much all those angels coming from one uh like one kind of background as a background was they were all market makers and sports betting and and sports betting yeah um which is sort of like kind of like similar to crypto so they were like okay we understand like it's it's another like thing happening which is similar to sports betting and like in the way that it's viet and the banking is hard and like everything is like very different um so but we understand it like we understand that it's actually potentially an opportunity because you can actually build a business in this like new environment um and yeah they invested and i have to say yeah i got very lucky with those guys who don't know and i'm yeah like i'm definitely like grateful for them to invest in us but also i'm very grateful for the people who invested in us and i'm very grateful for the people who invested in us and i'm very grateful for the people who invested in us so it's like one of so it's like one of so it's like one of the most surprising things for me is this the most surprising things for me is this the most surprising things for me is this is actually still like nobody none of them is actually still like nobody none of them is actually still like nobody none of them actually sold anything since then oh wow so actually sold anything since then oh wow so actually sold anything since then oh wow so they're still in the capital yeah still they're still in the capital yeah still they're still in the capital yeah still shareholders basically getting dividends shareholders basically getting dividends shareholders basically getting dividends i'm pretty happy about it yeah that was i'm pretty happy about it yeah that was i'm pretty happy about it yeah that was the first thing but yeah basically raising the first thing but yeah basically raising the first thing but yeah basically raising this like i think it was 900k basically this like i think it was 900k basically this like i think it was 900k basically allowed us to yeah hire first people allowed us to yeah hire first people allowed us to yeah hire first people yeah which was yeah which was yeah which was kind of like the next big moment for us kind of like the next big moment for us kind of like the next big moment for us because because because yeah again as a new startup yeah again as a new startup yeah again as a new startup market making crypto in london market making crypto in london market making crypto in london you are you are you are very like limited and like the amount very like limited and like the amount very like limited and like the amount now like what kind of people we can hire now like what kind of people we can hire now like what kind of people we can hire so people so people so people the very first like people we hired the very first like people we hired the very first like people we hired were definitely like on the misfits were definitely like on the misfits were definitely like on the misfits category right like they were like not category right like they were like not category right like they were like not pedigreed pedigreed pedigreed not pedigreed like very smart like very not pedigreed like very smart like very not pedigreed like very smart like very ambitious uh ambitious uh ambitious uh did like mostly in a good way yeah did like mostly in a good way yeah did like mostly in a good way yeah mostly but um mostly but um mostly but um yeah but like yeah but like yeah but like mostly misfit misfits yeah that makes mostly misfit misfits yeah that makes sense and i think that's how most sense and i think that's how most sense and i think that's how
Speaker 2most startups work really yeah very fair and startups work really yeah very fair and startups work really yeah very fair and on the fundraise on the fundraise on the fundraise like how did you like how did you like how did you end up meeting these like sort of end up meeting these like sort of end up meeting these like sort of sports betting people was it like were sports betting people was it like were sports betting people was it like were you sports betting yourself that's that's
Speaker 1you sports betting yourself that's that's you sports betting yourself that's that's basically where you're on like your basically where you're on like your basically where you're on like your third founder came in because basically third founder came in because basically third founder came in because basically we we we he was a he's a so acceptable as well so he was a he's a so acceptable as well so he was a he's a so acceptable as well so how i like i was actually briefly how i like i was actually briefly how i like i was actually briefly working with him in amsterdam like we working with him in amsterdam like we working with him in amsterdam like we didn't really intercept that much but didn't really intercept that much but didn't really intercept that much but like we kind of like knew like we kind of like knew like we kind of like knew each other existed basically so when i each other existed basically so when i each other existed basically so when i moved to london i connected with him um moved to london i connected with him um moved to london i connected with him um or he connected with me i don't really basically told me okay like because there are two ways I can help you I can help you to raise money and then you pay me 10 of what you raise or I can join you guys and yeah basically help you raise in the capacity as a founder yeah and I was like yeah like this 10 sound shady like okay let him join and if he finds investors great if he doesn't find investors that will just kick him out that's fair yeah but he managed to find find those investors because basically our like the lead investor um uh who he found he basically did a bunch of angel deals with them over the years so he knew him quite well and that's basically kind of like how it all came
Speaker 2to be got it no I didn't know the the initial seed raise story and uh definitely definitely interesting um so you have some money in the bank to hire you expanded the team uh super smart bunch of misfits did you have an office at this point yeah like we started that we work how do we work nice classic classic yeah and then uh is now the right time to like sort of transition the DeFi sort of is 2018 like you I'm sure you like obviously you guys were doing a bunch of stuff um when did you like first seriously start like focusing on on-chain stuff on chain markets so
Speaker 1basically the chrono chronology is 2018 we spent most of the southern 18 raising yeah then end of 2018 we started hiring people right and basically 2019 was a like year where we built actually most of our like initial algos okay and we basically had to try a lot of different things and DeFi and I think dy dx in particular was actually like one of the one of the very like one of the a lot different things we wanted to try to make money on right because like we're not like 2019 we're not making money right it's a deep bear market it was deep bear markets which we didn't really appreciate back then we just I just thought okay I'll go suck because we're stupid yeah uh which was also the case but like I I didn't appreciate that the bear market also didn't really help us to like find like a proper whatever product market fit or whatever you call it like yeah the algos like they were not good but they were also like we could not train them well because the market was as well um but and because of that we had to try like a few things like new things uh and DeFi basically dy dx like v2 I think it was maybe it was even v1 yeah kind of like dy dx was like very hard hot startup uh already in 2020 and we were like okay maybe we can make our name by market making there um and so we connected and it's actually like one of the very few places we were making money because not so many people were looking at DeFi back then but that was kind of like how we started and then we got uh like our first head of DeFi UD okay um as well around the same time and he basically started yeah like started helping us look at Israel like other things going on and then 2020 happened and his DeFi summer was basically Uniswap pools and we started building like proper ability of how to help them like how to like make money on DeFi so that that was pretty interesting time for us because like okay we started making money on centralized exchanges but we also found our like interesting nation DeFi as well that we could stop making money
Speaker 2there as well a few questions on on this because I think it's a super interesting time um I guess the first is how did it feel like personally experiencing sort of growth in 2020. um you'd spend like a few years working on wintermute didn't make that much money for for the first few years um yeah how did it feel personally just like seeing seeing you guys have some success and crypto markets growing
Speaker 1yeah like 2019 was very depressing yeah because okay we had some money and this money was like slowly disappearing yeah in 2019 actually we did the like seed extension rounds oh was basically a bunch of like one and one relatively institutional investor and then we had two Asian investors who basically gave us money but also gave us some trading capital oh it was like it was like 50 50 revenue split um kind of model um and we had to trade on the Binance account okay um yeah like things you do to survive yeah yeah but and then we we got like more money from our existence investors as well but it was like it was not nothing like super scrappy yeah it was a pretty scrappy um but yeah so we started trading on the like Binance account of one of those guys and we were basically not making money and like we started with them in July or August 19 and we were just next six months we just bleeding minor like not really making anything yeah and then like I don't know sort of January 2020 they said okay like we are taking all our money because like you guys are not making anything like we need to I don't know adjust like our pms et cetera et cetera um and they're like okay like it sucks like that is what it is but January was actually the first month we were profitable for the first time ever and so yeah the timing was pretty good because it kind of like allowed us to avoid like not great conversation because we didn't really want to operate on this 50 50 model in the first place right but we kind of like before I had to yeah because we didn't have any capital but basically we got yeah we got money in from this institutional investor uh who also is an extended us uh like just uncorrected uncollateralized credit line as well and we actually started being profitable um and Bailey's whole 2020 was I don't know we made some like made like 35k in January we made like 80k in February so it was like slowly growing in March and one like this March like you remember this covet crash saying yeah um made like 100k in one day and that's basically when I knew okay we actually yeah there's something here something is there's something here something is working like we're actually in the right trajectory now because it's actually it's definitely yeah there is a lot of growth like okay market is busy but we also making money so it kind of makes sense and because we saw this trajectory we thought okay like it's actually time for us to raise money again um because yeah that's how you do it with startups like once you see some resemblance of hockey stick or whatever like you you raise money and it was again very hard like it was again like close to impossible to speak to all the Venture funds Etc Etc but it was well we had this more promising graph we had like some results and we got an investment from lightspeed and then uh so which basically is like um yeah like we somehow managed to convince them to invest into a market maker in crypto which was like very bizarre um but yeah they believed in us invested in us and it basically gave us like extra capital to expense and yeah our P&L just expanded to even like it basically really accelerated our growth from there
Speaker 2what do you think lightspeed and Jeremy saw in you guys like obviously you'd experienced some growth and they had been dabbling in crypto already but as you said it was like unconventional for a Venture firm let alone a traditional sort of large income in one to like bet on bet on this kind of thing what was what were those conversations
Speaker 1like back then I think it was like on one hand basically this big institutional investor that invested in us was blockchain.com so that was pretty like large wallet business um in crypto and slidespeed invested into them before so basically they knew about us from them as well so they could actually check with them okay like how do you know those guys are they legit Etc Etc and yeah we work back then with blockchain.com a lot um we were borrowing from them on our collateralized side of things we provide liquidity on the exchange so they actually knew us from like multiple directions and they kind of I think that helped on the digital side of things got it but beyond that I do think he basically invested into founders and that team at the end of the day like I I think it was that that was basically it
Speaker 2like how did you guys scale and grow in DeFi because you're experiencing the success like all of 2020 was a blur looking back but a ton of stuff happened um sort of like how did you guys continue to to grow and your DeFi capabilities it was mostly basically
Speaker 1yeah again like finding all those Misfits right who would help just getting out of their way do yeah and basically get out of this way yeah like let them build what they want to build because it was all very experimental like there was no there were no blueprints and like how you build this there were no blueprints on yeah pretty much anything there so everyone was building stuff from scratch um so yeah you just needed to allow people to build what they
Speaker 2wanted to build got it and why do you think other firms weren't involved at this point or there weren't as many folks paying attention was it just sort of still super nascent were there certain restrictions that larger incumbents had like what looking in hindsight why do you think you guys were like uniquely positioned at this moment in time to take advantage of DeFi?
Speaker 1I think it's like we couldn't really pick things we wanted to like, okay, like we could not be picky about things. So we saw this opportunity, we kind of had to go after it. Larger firms on one hand, they are like, okay, this DeFi summer, maybe it's just the Fed. Okay, I will need to invest quite a lot of time and effort to like connect to it properly. And honestly, like now, Vintramit now is very different from Vintramit then. So like Vintramit now, I would understand like, okay, if there is some new blockchain popping up, we would not necessarily jump on it and integrate with everything, like put a lot of money into it, because it's, yeah, like you do need to think like more strategically and long-term about like where, what you integrate with. But back then, we didn't really have any other choices. So, okay, we saw this DeFi thing, we knew we can make money on it. And that's it. And I think another thing for a lot of certified companies back then had this, like, I think it comes with basically like bureaucratic apparatus of one of those companies that they are like, okay, this stuff is just very risky from a compliance standpoint, because you never know, maybe you trade with Roscoe or whatever. Which it's like a risk-based decision at the end of the day. Like, okay, maybe you do trade with them, but like you're not, at the end of the day, as long as you don't, are not consciously trading with them, as long as you're like actually trying to prevent in some ways to trade with them, like it's like, it's kind of good enough for most regulators. But yeah, most compliance people are just, when they become, it's a hard no, because it's much easier for them to say no than to be in trouble if something bad happens. And that's a really big issue in general with this control functions and most of the firms that you, like, unless there is a big push from upwards on like, put them in line and like, basically risk make them and basically to take those risk-based approaches and basically like how we approach it, right? It's not like we take all kinds of risk, but like, if compliance comes to us and tells us, you know, you're not going to be in trouble if something bad happens. And that's a really big issue in general with these control functions and most of the firms that you, like, unless there is a big push from the, from upwards on like, put them in line and like, basically risk make them. And basically to take those risk-based approaches and, like, if compliance comes to us and tells us, okay, like, this is risky because of this and this is this, and we tell them, okay, fine, I'm fine with this risk. Like, if something happens, it's not your fault. I made this decision, it's fine. It's okay. And it works, right? And as long as you have people on the top who are, like, willing to push for this, and like, Vintermute is not the only exception. Like, you see, if you look at all the firms that were successful, like, I think Jump is, like, a very good example of that, where basically that push into crypto and into DeFi, as well, was mandated from the above. Right. Pretty much. Like, yeah, Bill was super passionate about saying that it was very top-down, and that basically allowed them to bypass, like, things on the, yeah, bureaucratic side that Optiva could not bypass. Like, Optiva didn't really care about crypto. Like, the CEO didn't really care about crypto. They didn't see it as an opportunity. So, nobody could really, yeah, bypass it.
Speaker 2People below, you don't want to take career risk in the case something goes wrong.
Speaker 1It's not even careers. Like, you go, and then compliance says no, and then, okay, like, do you want to go and, like, all the way to the top and try to convince your CEO, like, this thing? Or, like, while you can do other things besides that? Like, at some point, you just stop trying, right? That's the thing.
Speaker 2Yeah, that's fair. And is that, like, a part of Vintermute's culture today? Is that something you've, like, tried to keep where you and other leadership are sort of trying to stay
Speaker 1innovating? Yeah, yeah, no, yeah, definitely. Yeah, it's something we are trying to keep in our DNA basically forever. Like, we never want to be in the situation where we basically have this layer of control functions that just, like, say no, and that's it. Like, and it's not like that we want to take unnecessary risks. Like, we do understand there are things, like, sometimes compliance comes to me and says, like, we should stop training this counterparty because they're doing shady things. And I'm like, yeah, it actually makes sense. Let's not train this counterparty because they're doing shady things. And report them to FCA or something. Like, it's fine. It happens, yeah. Yeah, it happens. But yeah, sometimes, I don't know, can we do this activity? And, like, how can we do, like, okay, maybe it's risky, maybe it's not risky, but, okay, it's just a risk-based decision. And at some point, like, you need to have, like, I guess the most important thing is the decisions need to be taken by somebody. Right. And then, like, you need to have, like, I guess the most important thing is the decisions need to be taken by somebody. Right. And the worst thing you can do at the company is to do, like, committee decision because the committee decision always ends up… Diffuses the responsibility. Diffuses the responsibility and comes up with a decision that's basically, like, the most, like, riskless decision, which is not how you build any company, basically. Yeah. Very fair.
Speaker 2One thing that, sort of, you guys have talked about a lot, even early on, was building Wintermute as a technology company. Right. Even early on, was building Wintermute as a technology company. Not a financial services company. In this context of market making and of doing stuff on chain, like, what does that actually mean? Like, what are things that a technology company would do that a financial services company wouldn't and vice versa?
Speaker 1Well, one aspect of it is, like, how do you scale? Yeah. So, you can, like, for example, if you build an OTC business, you can scale by hiring, I don't know, a hundred business development people… Right. …around and onboard counterparties. Or you can build automated systems that price things and handle risk properly. And basically, then you don't need, like, a hundred BD people. You need, like, ten very capable ones. Yeah. And we started with, like, less than ten, actually. And then you just focus on automation. You just focus on automation. You focus on basically making sure that we can cover, like, a few thousand counterparties with like, way less people compared to a lot of our competitors. Yeah. So, that's, like, one aspect of it is just doing more with less… Right. …on the people side. Because people is just… You really need to have really good people who can own things. And yeah, I just didn't… I just never… Like, it sounds fun to manage a company, I guess, with, like, a few thousand people, but I… I don't know if it does. Well, I mean, it sounds… Fun is not the word. Like, it's like empire building. Right, yeah. You know, it's like every guy's… It's good for the ego. …every guy's ego dream, like, "Okay, I'm managing those, like, legions of people." Right. And, like, those complex systems, et cetera. But it's actually… It actually sucks because, like, pretty much every big corporation, you just see how inefficient it is in, like, so many ways. Yeah. And already, like, even with 150 people, we just see, like… Every week, we would see, like, some example where, like, there was accidentally or not, like, committee decision being made and we… And we have to interv… Like, me and Marina, we intervene and, like, try to break this and, like, shout at people, et cetera. So even at 150 people, it's really hard to, like, maintain it. Like, you need to continuously, like, push people to maintain this, like, non-bureaucratic way. But with a thousand people, it's just, like, almost impossible. Yeah. I think the only way you can do it is to actually have, like, very small business units who are, like, self-sufficient and, like, almost run, like, startups. Right. So maybe that's, like, the only way. Yeah. Like, product teams, I guess, run in some startups. But it's just hard. Yeah. Yeah. That makes sense.
Speaker 2Throughout DeFi summer, you guys obviously, like, worked with a lot of different teams. Like, you must have seen a lot of stuff, some good behavior, some bad behavior. Like, any particular, like, takeaways or, like, stories you're able to share from this time? Or just, like, things you saw that are interesting?
Speaker 1I think, like, back then, I was really. I do it way less now because there is not. I don't think there is a lot of, like, new and exciting things to test out. Yeah. But I was doing a lot of testing personally back then. And I actually wish I could tell you, like, I don't know what my favorite DeFi protocol or something was, but it was just, like, most of the stories I had have is just, like, how bad it was, the experience. Like, it's. It's so scary to use MetaMask for the first time. It's so scary to, like, bridge things around. Yeah. And I've tried, like, so many things that were, like, very top of. Like, I tried Axie Infinity, for example. I hated it absolutely so much. It was such an awful. Like, I'm a gamer. Like, I do like playing computer games, like, all kind of, like. I tried, like, a lot of different things, but it was, like. Easily one of the worst gaming experiences I've ever had. Like, easily. Like, it was just so bad. I tried, I don't know, stuff like FriendTech, for example. Also just such an awful product. And just, like, such an awful product after, like, a year being out there. It's, like, it was. And, like, it got, I guess, rocked in the end, in a way, but it was just so bad. But, yeah, like, most of my experience, just how bad this thing people would design. Things. Yeah. So it's, I guess, like, things that I. enjoyed doing and d5 were mostly things that i guess mostly things on trading side yeah because when it comes to like swapping uh or trading i kind of like dy dx v3 actually this is a pretty good experience like pretty simple yeah it's like just pretty yeah pretty close to like centralized exchange experience but like it felt very decentralized as well yeah yeah it was actually pretty well done um yeah like when it comes to swapping like yeah there is this protocols that we incubated at the intermediate bebop where like one of the really big pushes we made like for decisions we made early on was to make it all about user experience and so yeah i still used as well because i'm yeah just like i it's a very nice swap experience when you need to swap things but yeah and i hard well i pretty much never used any lending protocols because i would just i know myself i'll just like forget i have positions there and they might get liquidated um i hardly used any perp exchanges after dy dx like i actually never touched hyperliquid myself uh oh wow yeah because i don't really need to yeah yeah yeah personally like people for that yeah no like i i know how it looks like i know the exact functionality it is but like i never felt the need to actually test things like how they work because it's like it's pretty clear like how it works yeah fair enough yeah uh yeah i never tried any prediction markets either to be honest oh wow okay primarily because i have zero interest in gambling on events yeah yeah i just yeah i just don't feel like i have any edge there and i also don't yeah i just have no interest but it's also pretty straightforward like like i'm pretty sure like yeah and i think i'm also i'm just not looking forward like in this point of market specifically i'm just really not looking forward to the bridging experience i just really
Speaker 2hate bridging yeah yeah very very fair um do you feel like the experience i know you maybe haven't been sort of trying a lot of stuff out recently but from what you you can tell like do you feel like the sort of overall experience has gotten better the level of product building crypto has improved um in
Speaker 1the last few years i think individual products are fine like the friction on like moving things around still exists right like i think like last time like last last year i was bridging a lot for to echo for example like from mainnet because hacker is in base so like i had to bridge some stuff to base which is very annoying because you just need to wait for things and yeah like it's kind of scary because like what if i didn't like something didn't bridge correctly or whatever like you know my money is gone so but yeah like echo like obviously it's not defy so it's once you got your money on echo it was pretty straightforward right um that was actually fun but it was more like a game fun where you tried to get in all those like different i don't know rounds which like most of them are zero now i guess fair enough it was kind of fun um but yeah most most of other things not really
Speaker 2and i also want to talk about an article you wrote a few months ago uh called the golden path i think a lot of folks read it like spread a lot of interesting discussion on on twitter um do you want to and it yeah i guess do you want to give like a quick summary of like where the inspiration for for writing this came from and what you were trying to address in crypto
Speaker 1i think what i wanted to address is kind of like the idea for the article was with me for like almost a year i would say so i was like kept sort of writing it in my head for for a while and the idea came from okay we went like especially like last two years like it went 24 25 we went through this financial nihilism stage with meme coins with high fdv uh low float tokens was basically people just trying to make money yeah all kinds of ways um and okay like it was fine for us as a business like we made nice money on yeah trading all those the different tokens sure but it all felt like really like it was all moving in the wrong direction like it was really not building anything new on one hand and then on the other hand we started seeing this like big encroachment of um stratify right the crypto and i think like the first time i felt that there was something like was wrong in vibe wise one when was the first bitcoin atf got approved sure which is really weird because like okay it's like a pretty great yeah it's great yeah but i mean to me it was already back then felt like okay like like we are cheering on this but like it's not what satoshi would want to drive right like it bitcoin atf is very anti-antithetical to like what bitcoin is supposed to do like i don't know micro strategy is like not less not exactly it's not
Speaker 2an innovation that would excite
Speaker 1no but it's it's even less about innovation it's much more about okay like you actually make this whole thing a lot more centralized because like if most of the bitcoin will be owned by corporates and uh i don't know even u.s government like what is the point right the the whole point was supposed to be that like everyone outside of the existing system owns it and the idea is that yeah it just becomes another like gold something uh with people cheering on because the price going up instead of cheering on that it actually becomes something used it just was a big yeah like i just didn't really understand like why nobody else understands that yeah like okay for me personally it was nice because i do have some bitcoin still um but it just didn't make sense from i don't know bitcoin reason for existence right point of view and then we had i don't know stable coin adoption and we had like other things and like where we arrived last year already was okay we actually got everything that we wanted in terms because people were talking about institutional adoption for years so we got that but like we had this financial financial nihilism saying and so like what are we even like building because okay we are basically moving ahead with like this basically crypto being co-opted by okay stable coins being co-opted by like all this like fintechs i need to move money like more efficiently okay we maybe will get i don't know burp exchanges to replace like some stuff maybe we'll get like this and this being replaced but they're basically replacing some intermediaries with another intermediaries right um the existing financial system will be largely unchanged right and this whole idea that they're actually building something parallel is completely gone like we are not building anything parallel anymore like we are actually moving closer and closer to completely being unable to exist outside of current financial system and so this like idea of crypto that i was not into at all initially like like i said like i was like when i started i was just really excited about volatility it's just fun thing to trade but over the years i actually yeah properly bought into this like i realized okay you look at basically what governments in the world are doing and okay starting with russia okay like it's authoritarian it's such a like okay they control your bank accounts they control your life but then you look at the west and it's pretty much the same like you look at tracking protests and canada like where people just boom you don't have anything you look at and now you look at i don't know what's happening in europe and it's not about financial freedom yet but even that is like i don't know i had to like withdraw some cash in uh london at some point to give to give me to my parents and like you want to withdraw you know five thousand pounds and you need to actually answer a lot of questions why i need it oh wow because and that was like bizarre to me i can't it's my money it's on my bank account i paid taxes for it like i can withdraw how much i want like why do i need to explain anything to you but yeah it is the process because they want to control where the money is going is that you don't like why do you need so much cash yeah and i literally told them i'm just gonna put it under my mattress just like we do in
Speaker 2russia not not to get too political about it but how much of this feeling is comes from like you as someone that is russian living in london and and like what's happened in the uk the last few years
Speaker 1i think it's also it's it's part of like growing in russia but it's also part of this like indoctrination by university i was at because like when i came to the west i was assuming it's going to be like very like capitalistic and libertarian yeah and liberal as well like liberal meaning of liberal in russia is like very different than liberal right in u.s or europe like liberal in russia is both economic liberal and like personal freedom liberal like it goes hand in hand while liberal and in the west is actually it's only personal freedom liberal right but economic liberal is actually like very leftist and very controlling which was very strange to me because like why like it's like it just makes sense to be pro both of those things yeah um and yeah like this economic freedom being like subject to the government government like it was always strange to me a bit it only became worse over the years it but now even the personal freedoms are yeah being subject to the government like you look at like where the whole world is going there's i know checking age for for using internet for example and they all mask it with like let's protect our kids but it's all like as a parent it's actually bizarre to me right like you basically give away your agency as a parent to the government because like you basically say okay i am as a parent unable to do anything to protect my kids or like control my kids um so yeah let governments deal with this which yeah which is just bizarre to me sorry what are you referring to uh basically like a bunch of countries like australia did it already uk is uh implemented it in a way as well that you need to basically on a bunch of websites like a lot of websites you need to prove your age to use them okay and like people use stuff you can't just like click a form and say like i'm no not anymore no you actually need to you used to be able to click a form but now you actually need to go through the verifications oh wow and people are making like saying oh you're like yeah you want to go like use porn porn website you need to prove your age like what's your problem but it's goes way beyond beyond that it's it's actually like i know some stuff like um imgur for example like the image website generation website was basically stopped operating in the uk because of that because they they asked it to verify the age um like a lot of and it just the whole world is moving towards it i think there is a law in us being proposed about this the same in europe like the whole world is actually like moving the same direction yeah which is very yeah scary actually because because that's like the first thing where they will control what you what you watch and then the second thing is basically yeah the central bank the stable coins that's when they will actually yeah properly have you because they won't even need banks to control you they will just be able to control you from the government side yeah um and because of that like i really feel that it was never like more important than ever to have crypto as this alternative system yeah but we completely lost our way like okay we're just cheering for bitcoin and the syrian and salon and everything being bought by etfs and we are cheering for stablecoin adoption but we completely forgot about like that this was supposed to be this parallel system that people can use to yeah basically bypass the government control and everything it's
Speaker 2tough though right like if you're a call it founder you've just raised like a seed or series a or something and like partnering with like some tradfi institution can help you with distribution help open you up to new customers it it might be hard it's hard to turn that down if it if it comes at the expense of growth right so and i feel like people have there's there have been many attempts on building like truly crypto native truly private stuff some of it's some of it's like starting to to work there's more traction a lot of it hasn't um so but i do feel like it's very difficult for a new founder or really anyone building the space to like turn down economics and and upside uh to preserve these principles so i guess like how would you is that like a fair sort of assessment how what advice would you have for people i think it's just not
Speaker 1for everyone right it's like okay you absolutely like it's totally and by the way like i'm it's not the time saying that everyone is like everyone who's straight from the past are like horrible people like it's like it's totally fine to build your business and crypto and like web 2 or like whatever like like there is nothing wrong with that but it's more like i think we should strive on people who build i would say like almost selfishly selflessly um just like parallel systems yeah uh and like we should more embrace them like we should help them and we should like be more supportive of them in any way before shape or form and try to remember like why why we're here in the first place because like crypto as it is it actually makes no sense like more vast majority of tokens make no sense currently because okay like if everything is sculpted by stratify the corporate chains make perfect sense like it doesn't make sense to have like a separate like fully permissionless and whatever resistance and anyway chain when you can have like corporate chain okay it's controlled fully by this corporate it just disintermediates some intermediaries sure but like okay just replace one for another yeah um so you're not a fan of tempo uh i'm not a fly i mean i can name more names but like it's i think it's like from the i'm a fan of them from the standpoint of like that they make this is the existing system more efficient so like uh i can like aesthetically i find it like nice yeah that you make things things more efficient philosophically like you're not excited about it yeah i'm just not excited about yeah like it's fine like it's makes sense like it's like you build a better database like it's great uh like it's but i'm not excited about it yeah no it's
Speaker 2that's very fair um are there specific projects or people that you have come to respect or appreciate that you feel like do embody this principle i think
Speaker 1the most like like tornado uh there's another cash yes uh and yeah like i really wish them like to succeed in their struggle against the us government uh i mean the most obvious one i think is the like the syrian foundation probably like because i mean vitalik has been the more one of the most consistent people with his principles okay about this and yeah i really it really does seem like he doesn't really care about money as much as he cares about actually making this thing come true yeah but yeah the irony or like yes the viet saying about this is okay like ethereum can come like can completely succeed and be in this alternative system to the like outside financial system but the serum token can be completely failed so like both things can be true and i actually think that like in the mid midterm it's actually more likely that the serum as a token will not be in a great place but if ethereum has its way and the serum actually becomes this like kind of freedom chain where people can transact without governments interfering at all yeah then it should have a lot of value just from being that right and it will be hard like it will be definitely hard like because the serum gets massive amount of criticism uh over the years for like not being commercial enough but i think it's very important to have to have a project to have a chain that's actually playing a flag yeah yeah that puts on a flag and basically says okay like yeah this is what we're gonna do and i think it's i think it's just important that's basically like one of the best examples of yeah teams that i would say like we should cheering on and not just like yeah say uh go be more commercial go need be more like corporate chain or even solana like yeah i think it's important that we just have like plurality of chains yeah that's what golden pass for me is about like that you basically create many difference like you pursue many different outcomes at the same time right and not just put everything in one place because like if you put everything in one basket you basically okay you create something stable but the stability is ultimately what will kill you and that's what will like choke you uh and destroy you and that's that's like the main philosophical point about it got it
Speaker 2no i mean i think it was a really sort of sort of interesting perspective and um i think your point about the ethereum foundation is honestly like a pretty contrarian one i think most people on again on on twitter that work in crypto they're they're holding either exposed to its growth so if they're not seeing like strong commercial sort of push or a compromise in any way on the commercial liability and and the principle of like decentralization and privacy like it it pisses them off um but with ethereum specifically uh it is it is interesting because your background is more sort of classically liberal like went to a sort of libertarian college in russia the ef has this perception of like being slightly if again if you had to draw like a political spectrum left right it's probably more on the on the on the left um like do you sort of do you feel like that aligns closely to your sort of personal views do you do you see is it at odds at all in terms of do you see where i'm going with this yeah i see
Speaker 1where i'm very good with this i think it's a bigger issue is like okay people are always striving to like create frameworks around like how they operate and what they were like basically put people in different boxes uh which like these years i understood this is like like arbitrary it's it's very like okay it's useful to have frameworks right but you can totally like support different things like you can do the very capitalistic and like business like winter mute and you can actually support like things happening which are like very non-capitalistic because you do things that it's basically better for i don't know society to have those things developing yeah so no like i don't say a contradiction because i actually don't put myself in any of those boxes like i realize i recognize where my like foundation is like where i grew from but yeah i'm more complex persons than just like a libertarian like so yeah yeah like basically yeah don't put me in any box like yeah i'm more complicated than
Speaker 2this no no very very fair um and and how has reception been from like people have people like talk to you about sort of this your article like what has have you noticed any people like an impact at all from writing it i think
Speaker 1like reception was mostly well first of all people like this feeling of we are lost is definitely perceived by a lot of og people because like people don't really know what like why we are still doing this and it's to some people maybe it actually does give some direction okay like we can still work towards something yeah like we can still actually build towards something bigger than us we can still build towards something interesting and not just like our tokens going up right kind of thing so i think like that that bit is missing and i think like my hope is that we will get more and more people who will buy into the original vision of this yeah and we'll start actually like focusing on this and it will be a minority it's not going to be a lot of people right it was never a lot of people to start with like even like i was not there like in bitcoin community or whatever like 10 15 years ago but yeah like it was never it was never like massive right um so i think we need to go back to the roots and like if you don't then okay you start doing something else you go to like vibe code and ai or something like yeah i think a lot of people just exit crypto altogether uh because it's just like there is no nihilism anymore happening like profitable one yeah uh i mean there is some rocks and stuff happening always but like it's just yeah you cannot make a lot of money in it i guess um but people who will stay because they will stay because they'll find this meaning again yeah that's that's what important
Speaker 2one other thing that uh you've spent a lot of time on over the years is just dispelling just dispelling notions about winter mute if winter mood's been on the receiving end of like countless attacks accusations uh dumping tokens um etc etc um do you want to give like a high level of just like some of these what maybe misconceptions that people have about winter mute like marketing making and crypto i know there's probably a ton that we could discuss but pick one or two that that you think are like yeah i think i'll
Speaker 1preface it like it comes to the territory like once it become big enough like people just attribute a lot of things to it right so to me it's all about like people want a simple explanation to things that happen to them right and if you trade i don't know meme coins or like any tokens uh it's much simpler to blame some outside party for like you not being good to trade a good trader at the end of the day um or like even somebody ragging you at the end of the day because like it's much simpler to know that you're like there is this big intramural guy who just screwing people around and it's it's a comfortable thing because it yeah it basically like removes your responsibility for your own actions but like what's why i keep replying to people on twitter about it because i don't want to do that is because i'm honestly like i'm very like sad and angry that people are just giving away their agency that way on one hand and on the other hand i am really sad and angry because the arguments that they're making like how vintermute is dumping things are just very stupid and dumb yeah because like i don't last two years like one of the most common things with people just post our transactions from one exchange to another and they would basically be like they would come up with the most ridiculous flat earth type of theory why it happens like i know binance gives us tokens and then they sell them which is like if you think about how exchanges work or how market makers work and like how any of this work like it just doesn't make any sense like it's it's very dumb theory but it just found like enough disciples to believe in it because again it's just easiest thing to do yeah well in reality okay like if you send solana tokens from binance to coinbase is because yeah like we sold a lot of tokens on coinbase and we bought them on binance that's pretty much it and yeah there is nothing else or more or less to it i guess like literally it's just arbitrage same yeah um but people like that that just makes me very sad and angry a lot of times and i kind of like learned to like not to overreact to this but it's just yeah comes with the territory comes with this territory but also like i don't know i'm just sad when people are stupid i guess
Speaker 2it's and and was it something where again you guys were were big like people knew projects knew about you guys um like were you starting to get questions or maybe some hesitation from potential partners like hey if we if we work with winter mute people might assume incorrectly that like wouldn't it's gonna like negatively affect our token price or something like was that something you actually started to to experience at all or not that
Speaker 1much yeah no i think it's it basically i mean it did allow like a few new intermediaries to pop up yeah like not necessarily about winter but like there are like bunch of intermediaries who inserted themselves between projects and market makers to say okay like we're actually gonna help you yeah to select a market maker which was kind of like annoying to us because like okay we know we are not doing anything wrong sure we actually like the ability to like commoditize in the whole market making business um and also like pretty much creating all market makers with each other and while it's like it's one saying okay like if you have been choosing between winter mute and some non-name market maker even if this normal name market maker i don't know quotes like 96 percent of the time and winter is doing 95 percent of the time and but they if they have a balance sheet of i don't know five million and winter meters two billion like it's it's probably also something you want to take into account but they don't um but at the end of the day yeah like it's we haven't seen anything significant yeah like we see it with like lower profile protocols like less sophisticated protocols that they do have these concerns but a lot of them we don't want to deal with in the first place sure and i'm almost like i'd rather deal with like more smart people than less smart people so yeah if you believe in it it's one thing like it's only like real consideration i guess like a lot of those projects are like they might be smart themselves but they know that they are like second holders yeah yeah perception matters and they are like afraid that okay if our token goes down yeah it's gonna be bad and yeah but then i also know that a lot of protocols were like onboarding with us as a market maker because they knew that okay like if my token goes down then at least people just blame it on instrument
Speaker 2no it's it's uh very very fair um
Speaker 1and but like the reality is like why and it's quite important to understand like why does those token go down the tokens go down because somebody is selling right and you need like what most people don't realize is you can actually see on chain who is selling yeah and like vast majority of time who's selling is like his eyes are like big investors from the sea drones right and that's like basically yeah low flow i do have dv story it's basically the unlocks and people like hedging the unlocks people trying to anticipate the unlocks and basically like front runs and locks it's really just great this vicious cycle always basically found the team selling tokens yeah and it's 99 of the time it's like this like okay sometimes you have some like bad market makers in asia that like manipulate prices sure but also in this case very often they work with the teams directly so i don't know my personal conviction is like 99 percent of the cases people should should actually blame projects for either selling tokens themselves sure or working with market makers who like manipulating
Speaker 2their prices got it so you do you do agree like there are market makers that engage in bad behavior and like any particular like egregious examples again you don't have to name names if you don't want but
Speaker 1like i don't know god bit wasn't in use or a few times so like that's that's very obvious like this is the guy who was doing um uh melee token like i forget them hating something um like there are names out there yeah name them yeah yeah so it's like there are definitely like bad market makers yeah for some reasons like vast majority of them are centered in asia okay and yeah that's but also like the final sign is like our first speech deck for winter mute when we saw like we were selling internet to the seed investors was like okay there are all those shady market makers yeah and the internet is actually going to position ourselves as like an ethical one okay and there is a article by me uh good bad and ugly of market makers uh still available online like from i don't know 2019 or something or 2020. i think i read that yeah yeah so it's like we always actually positioned ourselves as one market maker that doesn't do this kind of
Speaker 2stuff sure um and what what does that look like in unethical market makers it's just like you'll sign an agreement with them and they'll say i
Speaker 1honestly don't know much right like fair enough yeah like i know like the stuff that was public last year uh was okay like if you have if you have structures where a market makers basically get the proceeds from selling the tokens yeah that sounds like basically you always need to look at okay what are the incentives for market makers like if the incentives for market makers is actually for selling the tokens uh like and basically the shares that proceeds of selling tokens with the project like it's not great um generally like i think it would help a lot of projects just make this market making agreements public right like we intermediate with always or that like yeah because again i think it's just important for people to have same information as everyone like this it's all about information and symmetry and information the symmetry can be okay like what is the strike price for the like market maker loan that's that's good to know but the information is symmetry is also like this founder actually just sold like 10 of his tokens for the foundation yeah so the foundations or some otc desk like that should also be discovered right yeah bringing the
Speaker 2conversation back to winter you guys do operate mostly delta neutral i believe at almost all times um but you do take directional sort of bets sometimes as well like how do you decide when to go directional is it's like the top-down thing is it something specific can you sign on like what does that look like from like when
Speaker 1you're basically three buckets so like the very the first bucket is our venture team so like we basically do venture investments and tokens so like yeah there's definitely not delta neutral it's right always long uh second bit we do have a treasury positions and it's basically a bunch of tokens so i think it's like bitcoin ethereum solana hyperliquid like this is a top ones from top of my head and it's basically just long-term positions that we hold got it as a company and then on the trading side we can take positions every now and then right it's pretty rare uh simply because it's just not our core expertise got it like we would like do things like buy the deep for example or yeah stuff like that specifically about short ends it's something that we very rarely do simply because it's one of the most dangerous things you can do in crypto because yeah even shorter stock like there was a story about avis uh gamestop avis the car yeah company like yeah it went up like 5x or something and then it fell because like somebody was short and saying and then they got squeezed short squeezed but yeah encrypted like yes it's basically unlimited downside and very limited well yeah 100 upside maximum that yeah this short in something and that's why we just never do it because it's it's just very dangerous right you can lose way more and like the upside is very very limited
Speaker 2and i feel like if like a large market maker specifically like was shorting stuff people would try to find out like people would probably might pick up on that and try to sort of on you guys it would not similar to
Speaker 1games that easy i think like whereas the short and like at scale happens is when it's basically when people know people control the supply law okay like i don't have any names in like on top of my head but like if the team controls are 95 of the supply right they can totally like create pump and dumps and short squeeze and like what's not they can do whatever they want pretty much because they like okay they can short the token because they know that if it goes up like if people are trying to short squeeze them shortens they can just sell the remaining 95 into this so like they like when when seems the team controls the supply they can do pretty much what they want but yeah shorten some random token where you have like no control and no i don't know coordination with the foundation behind it is it's pretty risky preposition
Speaker 2yeah no very fair um you mentioned hyperliquid as a position you guys have and um out of curiosity like where do you think what do you think of hyperliquid overall and and sort of where would you say it falls on your sort of various like golden paths sort of article because hyperliquid it it's gotten praise for it's a great product traders like it um they didn't like raise venture like did great by its users at the same time there are some sort of valid criticisms of the platform um in terms of uh there's like some centralized aspects some sort of concentrated staking um sort of how do you feel about just like that overall
Speaker 1so i'll start with is it like pure defy probably not because like yeah there's quite some centralized aspects yeah does it matter also not like even if it were like the most pure defy perp exchange like i honestly don't think perp exchanges matter that much in the like cipher because like it's it's just a way for people to i don't know trade gamble or hedge or whatever like it's it's not that important in grand scheme of things so as a product hyperliquid yeah i think they it's really impressive what they built it's a very good product like they did really well and like especially last six months was also like new trends and trading other delays and like commodities and equities and this stuff like the execution is just really good and like really really well done uh so and that basically prompts us to like still hold it yeah um i have big questions about i guess like the main two concerns for me would be on one hand the regulatory side of it and not necessarily now but like let's say in two years time or three years time with the um when there is a new admin in u.s uh if there is a new admin in u.s like what happens if like somebody comes to them and tells them okay like you know you cannot you cannot actually allow north korean people to like trade trade trade on hyperliquid um so yeah that's that's one big question because okay if hyperliquid becomes like kycable like okay then it's just another exchange yeah and another one is i have a big question about like how about the throughput out of basically this aspect of it basically i years like i i generally don't believe blockchains are the best tool when it comes to throughput when it comes to like processing like millions and millions transactions per second etc there's like stuff that see me on nasdaq do like casually every single day i don't think blockchains are like very much very well designed for that and for hyperliquid to successfully compete with like cme and ever since they will need to become more and more like i do think the only way for them to do it is to become more and more centralized which can still work as a product it's more like we need to be conscious of that i guess so yeah i guess it's like regulatory and scalability like that those would be my main two concerns yeah that makes sense yeah but i i do think they are like smart enough to like figure this out i'm just like i'm not buying into this like as a grant like defy chain like hyperliquid chain vision yeah like it's like it like that that bit is not what i'm what's i'm excited
Speaker 2about yeah winter mute in 2026 is obviously very different from the winter mute of 2021 2022. how have you thought about where to expand and where to avoid because again you guys are around like a lot of different things today centralized exchanges d5 you have a research arm ventures some governance stuff how did you think about layering on additional things are there specific things where you you got close to launching but but didn't for whatever reason
Speaker 1i mean at the end of the day we are like we're trading company so we need to make money um like a lot of those directions like governance for example which doesn't really exist anymore because we don't have a lot of governance really like okay like we have like enough people who can do it at hawk every now and then but yeah it was kind of like fun and interesting like three four years ago when there was actually a lot of different governance and you could could actually get alpha all those governance from forums from like scraping them and like seeing what's happening and like actually doing proposals and whatever dydx to get like different fee schedules or something like there was actually value in this like nowadays like governance is pretty much dead so we don't do it anymore um yeah venture is more straightforward for us because we just You just get a lot of deal flow naturally in crypto. So it just always made sense to have it as a proper arm. It's very separate. So it's not like it's pretty much a separate team that communicates quite, quite closely with like core of Intermute, but it's not like we actually tried to keep it separate and they are like their decisions when to like invest, for example, are not dictated by any means by whether we want to be a market maker in that protocol, for example. Fair enough. So like we never invest in the protocol with an idea that, okay, if you invest into you, we get market making mandates. We just don't do it. And like a lot of our competitors do that kind of stuff, like put like a hundred K check and yeah, become a market maker. We actually approach it as a proper venture business. We actually like leading rounds. We backed founders. Like we actually want to make long-term money out of this and get proper long-term like strategic alignment with teams we're working with. So that's, that's important research side. It's kind of our, it's basically yeah. How do I put it? They like they're where we try new things. Yeah. Like we didn't, we did try to incubate a few protocols there. Like it was the last year and a half, not successfully yet, but we kind of like happy to try it. But we did like a lot of experimentation on the farming side. We actually look in like one thing that was sort of like, yeah, about to be born most likely out of this is our curator business. So that's, that's something we like we did like, because we were so, so involved in the farming side and we were so involved in like basically working with like a bunch of RWA issuers kind of makes sense for us to actually double into this. So that's We're talking about being like a more folk curator. Okay. Yep. And so basically yeah. Research side is yeah. That's, that's why we're trying new things.
Speaker 2Got it. Yeah. Makes sense. On the curation side, just out of curiosity, like what's your sort of you guys thinking there? Cause there's a lot of folks sort of venturing that space, honestly, it's not the most sort of high margin sort of business. Like the take rates are, are relatively low. Maybe there's like a strategic element here as well.
Speaker 1Curious how you think about it. It's basically. Yeah. It's, it's, it's a lot of strategic element. Yeah. Okay. To start with like, we feel like we have a good advantage there on two sides. On one hand, we have a pretty strong balance sheet and I'll cover it a bit later why it's important. Uh, and it's like, yeah, our balance sheet is yeah, bigger than like pretty much all the existing curators combined. I think. Yeah, that's probably true. Yeah. And then now DeFi capabilities are very strong as well. Like well traditionally, and I do, I actually did a pretty deep dive into curator business. It was last few months. Oh wow. And I came to understand it's much less about, okay, like assessing the like credit risk and et cetera, et cetera. Like there is this element as well. Yeah. But it's much more about building the, basically the alert system, like DeFi alert systems and something happens, uh, building proper oracles for the assets that, uh, connected to like the more four walls. So basically all those like small DeFi blocks that we are very good in building. Yeah. Yeah. Yeah. And basically being like ahead of the curve from like, yeah, monitoring those things and doing like very cutting edge, kind of like protocols as well. Um, that's something we just, we can like really, yeah, diversify ourselves from everyone else and it just matches like the whole business matches really well with the rest of our business as well. Right. Because it's, um, like we already work with RWA issuers and the market makers. Distribution. Yeah. Yeah. So it just makes sense for us to actually cover the other side of the distribution as well. And we can actually, yeah, supply liquidity on the curator side, but we can also do liquidations for the walls to make, to make them more safe because we are liquidation business on the DeFi side. We can, um, we can actually be, we can provide liquidity on the weekends and those RWA assets because we have a balance sheet to actually do that. Yeah. Yeah. Yeah. Yeah. Yeah. So, yeah, that's why, like it is not massively high margin business, that's true, but it plays well with the rest of the, what we do.
Speaker 2Very fair. Um, a few more, like two or three more questions. Um, you mentioned the balance sheet for Winter Mew and wanted to ask how you guys generally think about managing it and sort of, cause in the past you, you have a lot of options, right? Like distribute dividends, you can expand the team into new verticals. You can just have it there as like a safeguard if, if something happens, um, how do you treat the balance sheet generally? What's the philosophy?
Speaker 1So, I mean, there is a bit risk management aspect to it, which basically honestly kept us alive over all these years, even after like big hacks that happened to us and FTX and like a bunch of other events that happened. Like we're always fine. Like Bybit hack, for example. We're always fine because like the way we approach the balance sheet, we look at our net equity and we say, okay, like on any wallet, DeFi wallet on any centralized exchange, but most of them, with the exception of maybe like the biggest ones like Binance, we would never hold more than 30% or 25, 30% of our net equity. Right. And yeah, Binance is maybe like 50% of net equity to the maximum. Yeah. So like we have a controls over that. So like, even if like some of the biggest, like we would need like two or three biggest exchanges to completely go out of business for us to actually face bankruptcy, which helped us. So like when the big hack happened, like, okay, it was, it hurt us, but it was still like. You can survive it. We survived it and it didn't affect, like it didn't affect at all, like our plans in general. Yeah. Um, then there is an aspect of, uh, like all those directional exposures that we, that we have. And that, that again, like we keep at 20% of our net equity. So even if all the like Bitcoins and hyperliquids go to zero and our venture goes to zero, like, okay, our net equity will go down by maximum 20%, like we can survive that. Like it will be sad obviously, but yeah, we can survive that. Yeah. So that's the risk management aspect. Then, um, in terms of like where the money goes, uh, basically every year is pretty much the same. We have reserved bonus pool where basically pretty much all employees, uh, get their bonuses from, um, then after this bonus pool is distributed. And that's basically a set number that we basically agreed with our investors in series A and series B. Yeah. Uh, so that's kind of like set on the, yeah, government, government side. Yep. Um, and then after the bonus is paid, taxes are paid, then we pay 30% dividend to all the shareholders and the remainder just stays in the company. In the company.
Speaker 2Got it. No, I mean, it's a, it's a fascinating, um, sort of model where you have this like long-term balance sheet capital full of capital, you can continue growing and there's like lots of interesting ways you could deploy it. Um, yeah, it just not many businesses in crypto. Do you have the luxury to, um, to do that?
Speaker 1Yeah. But I mean, what, what use, what we see most of the time in crypto is people, once people have balance sheet, they are very. Yeah. Enticed to put this balance sheet in some risky stuff. Right. And blow up. Yeah. So like one thing we never did is yeah, to do that. And we probably didn't make a lot of money on because of that, but we also didn't blow up because of that. Right. Yeah. No, very fair. Which is like the main thing you do with crypto, like you survive.
Speaker 2Yeah. No, I think being a cockroach is, is one of the most important things and, uh, I'm sure we'll see winter meter around for, for many more years. Well, crypto.
Speaker 1I wouldn't call us a cockroach,
Speaker 2but yeah, it's a good thing. Um, are there any specific like things you've regret or mistakes that sort of winter moods made in the past that you want to talk about? And I think like, it could be like the hack, it could be something else sort of feel free to take it in sort of whatever direction, or it could be like some, some philosophy you changed around like hiring or scaling the team. Like it could be anything.
Speaker 1I think it's mostly about not moving fast enough. Okay. Like we could have moved way faster, like in 2018, for example. Oh, interesting. Um, yeah, for sure. Like now, well, there's like a big, big push for us currently, um, is basically outside of crypto. So we don't want to abandon crypto. Like it's like definitely the core business for us, but we also don't want to be in a place where in like even five years time. Crypto is just like a niche something business and it's just small and smaller pie and, or maybe it's the same pie, but like most of it is trading on CME, for example, and we cannot really make any money anymore. Um, so because of that, we expanded the TreadFi now. So we're starting to like, it really helped that like all those products on hyperliquid and Binance and Coinbase pop up, like in terms of commodities or tokenized stocks. It is pretty helpful from that perspective. Okay. So, yeah, I think that's, that's, that's, that's a really good point. I think that's a really good point. Yeah. and equity options business. Yeah, just basically be, on one hand, like another, I don't know, jump or Jane Street. Yeah. But on the other hand, yeah, still hopefully do something different and do it with way, way less people as well.
Speaker 2Got it. That makes sense. And how do you think about maintaining an edge, like a differentiation? Obviously, like market selection, game selection is part of it. But in this increasingly competitive world of market making, both in TradFi and in crypto, what do you see as like the guiding philosophy for how you guys continue to win?
Speaker 1I think it's all about just making sure that people can push for things. Okay. Successfully, like, within the firm. So it's like basically enable people bottom up. Bottoms up. Yeah. Oh, wow. That's like, that's the best you can do.
Speaker 2Just cut out bureaucracy, let people have operational control.
Speaker 1Yeah. Yeah. Basically, allow people to do experiments, like as long as they are like controlled and not crazy. Yeah. And like most of experience are like, I think like my main issues with, I usually like that people don't experiment with enough size, if any sense. So it's like, that's a big issue for me currently is that people are doing, they're doing some reckless things. So encouraging more risk taking. Yeah. So, but it's not even risk-taking. It's more like encouraging more building, encouraging more like experimenting. Yeah. It's more often, it's more often not about risk-taking.
Speaker 2What does Evgeny in his spare time do? I know in the past you've like written about your love of D&D, these games take a long time. So I like wondering if you still have the time these days to really get into it, but yeah, like what do you, what do you like doing?
Speaker 1Yeah, no, I'm still doing the D&D thing. I actually like took a bit of a sabbatical for like a year or so. Oh, nice. But like, yeah, we just, with my old group, we just started a new campaign. So like I'm playing. So it's like you play like six hours on a single day and come back to it or how does it work? Basically when I can, it's about like four hours a week. Yeah, but it's like, it's basically the same group as I've been for the last eight years almost. Nice. And it's, it's very nice. It was like, none of them are in crypto and just very nice to just have some like completely normal conversations. Different, different, different like group of people. But yeah, I do enjoy it. It's, it's kind of like fun. I'm, it's also like really interesting for me because I'm, I still need to, like, I'm not, I'm pretty introverted person. I'm not like very strong on, I don't know, role-playing aspects of things. So it's still like fun to challenge myself to like role-play weird characters, et cetera, et cetera. But yeah, what's, what's beyond that? Yeah, I'm still like assembling Warhammer figurines. So it's, that's has been more of a meditation thing. Okay. So like assembling and painting stuff. Oh wow. Like not, not like participating in like the games themselves. Like, yeah, I don't have time for that. But yeah, assembling and painting is just very kind of like, it's one of the first things that I did. When I moved to London because I remembered myself when I was a kid, like I was assembling this like airplanes and ships out of plastic. Every kid, yeah. And paint them. And I remember I did a horrible, totally horrible job of painting them. And so I decided, okay, like I'm actually gonna put some time and, and do like, not crazy effort, but like 80, 20 kind of effort. And I actually was, got pretty happy with the result and became like so meditative that I'm still like doing it occasionally. Got it. Very cool. Yeah. And I play computer games every now and then.
Speaker 2Any, any specific categories? Like, I think, is it like RTSs or strategy games or?
Speaker 1No, I'm like, I like ground strategy games. Yeah. Paradox? Yeah, yeah. Oh. Yeah, so Europa Universalis, like. Heart of Irons? No, like I'm a Europa guy. Europa guy, okay. Heart of Irons, like I, I tried it and then I realized, okay, like, like, you know, it's a pretty, yeah, long learning curve. Yeah. I know how to play one game. I will stick with that for now. Yeah. There is a fifth one, the fifth one came out last year, but like I'm, I'm basically now like over the next three years, I think, my like slow, slow ambition is to get every achievement in Europa 4, which is, which will take me some time.
Speaker 2Got it. Have you tried the new Europa 5? Not yet. Yeah. I don't think you should because.
Speaker 1Oh, it will take years until it becomes proper.
Speaker 2I tried it and yeah, the learning curve. Yeah. Yeah. The learning curve is, it's like a step.
Speaker 1No, but also it was the same as Europa 4. Like it became playable years and years after the release. Okay. Yeah. So it's fine. Like I know it will become a proper game, like five years from now.
Speaker 2Fair enough. Um, we have time, but yeah, Evgeny, really appreciate you taking the time and coming on today. Super interesting to learn about your background and, uh, what are you doing? Thanks for having me. Bye. Bye. Bye. Bye. Bye.
PodcastTranscript AI