Jordi Alexander Profile picture
Nov 13, 2022 7 tweets 2 min read Read on X
Migration towards Defi Exchanges- Like WFH, it was always going to happen, but this is the Covid accelerant moment.

At Selini Capital we have many HFT veterans amongst us, with an intricate understanding of market microstructure.

Lessons that are guiding us on evaluating DEXes:
AMMs:

A cool but naive primitive.

Price discovery kills LPs with poorly named "impermanent" losses

Uni v2 very capital inefficient. Uni v3 killer for non-experts to MM, and worse than order book style

Not bad for stableswaps and long-tail Daos wanting to own their liquidity. Image
Oracle-Based exchanges:

There are no real MMs- this means no price discovery is happening there (unless its an exploit!).

They piggy back of centralized exchange market makers e.g. Binance etc.

Clever short but not scalable, and not part of the Defi Vision.

Sorry, just facts. Image
CLOBs:

This is the only real long term solution for efficient price discovery to happen on-chain.

The issue is if you have the matching engine fully onchain it requires huge throughput that's not easily feasible yet.

And if you have it offchain you aren't fully decentralized.
We are interested to see the innovation coming in the immediate months/years on this side.

dYdX is the leader rn, and we support their liquidity depth (disclaimer: we are not an investor, but hold some tokens and will stack more).
Their matching engine is offchain at the moment (Starkware on top of Ethereum). They are trying to be more decentralized and move to their own app-chain on Cosmos, to hopefully have enough throughput to allow more decentralization.

Will they succeed?

Not sure, its a hard task.
But its what we have to move towards, and Selini will help support liquidity in serious projects moving in this direction and help figure out the warts and edge cases that will inevitably come up.

Hopefully in 5 years we look back at FTX model like we look at caveman tools.. Image

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More from @gametheorizing

Jan 5
Btc ETF is about to Drop. Awesome!

But markets are fw looking- and ETH Etf is about to have 'next'.

The ETH community has been depressed.

Its time to just take some mETH. A double-dose in fact.

Christmas may be over but Santa Jordi is just starting:

The mETH giga-alpha 🧵👇 Image
1. What is this mETH thing anyway?

Mantle Staked ETH, or mETH, is a liquid Staking protocol for ether, like Lido and Rocket Pool.

After a recent soft launch in Q4, it is ready for action.

Check the 1m Change in the rankings below.. 👀🫢 Image
2. Why is the smart money rotating into mETH?!

How many chairs are you sitting on? Is your chair paying you double yield than every other chair?

Double dose- of pure, real, Vitalik-blessed ether, not some random coin. Image
Read 14 tweets
Oct 27, 2023
Crypto is (so) back! Despite limp equities, $BTC rose like a Phoenix 🪽

The prophecies foretold it.. long time coming!

So enjoy the moment-

Toss dice on Ponzi-coins if you want that PnD adrenaline!

But then we have smth serious to discuss.

*Trigger warning: 'S-word' .. 🧵
The gravity of this message requires precision, so to be clear:

Solana tech is fine/good.

Toly seems super chill, like anyone would enjoy going to Mission Burrito with.

Solana community is nice kinda quirky.

This isn't about Solana tech/culture. Or even uniquely about $SOL.
This is about the wild abstraction- 'crypto money'.

Maybe some of you are 'in it for the tech'. Great!

But TOKENS are about MONEY.

The stakes quite literally could not be higher: Financial freedom vs Financial serfdom. Image
Read 15 tweets
Oct 9, 2023
Haven't expressed Macro views in a while- but as things are about to really start moving- its time.

I spent months analyzing the endgame of U.S. policy.

The outcome I saw is now coming into view-

Gradually at first.. then all at once, the Fed will poo-poo in their pampers. 🧵 Image
So Mr. Jay raised rates a bunch, and then him and his whole crew has been trying to sell us on "higher for longer" and that they will keep going till the inflation "job is done".

Meanwhile inflation is sticky- and paying 5.5% interest on $33 trilion isn't helping USD debasement. Image
But old news- why are things about to change now?

Well those in the know have been fixated all year on the back of the yield curve. And 10-30 year bonds are starting to get blown out in a serious way. Image
Read 11 tweets
May 3, 2023
$SUI launch is giving me flashbacks of 2021 NFTs.

Many listened to the Uncommon Core episode on Crypto Game Theory-- what they didn't hear was the first hour debate between me and Su that got left on the cutting room floor:

"Won't new NFTs dilute the value of existing ones?" .. Image
From a more simplistic economic perspective :

The buyers of a category have a limited budget.

Whether its to buy an animal profile picture-

or who want to own an L1 that is trying to sell the allure of crypto-Zuckerbergia, combined with the 'sophistication of MOVE language'-
I remember Su was arguing that the increase in supply of new NFTs was actually bullish for prices!

Increases mindshare, customization, creates hierarchies.

To a certain extent this made some sense and did play out like that for a while!

Was I just totally mid-curving it??
Read 6 tweets
Apr 1, 2023
A story for you, amongst all the April Day shenanigans (++MEMES)..

Laelaps ('hurricane' in Greek), was a mythological dog that never failed to catch what it was hunting.

One day a heady dude called Cephalus decided to unleash the hound on a quest to hunt the Teumessian fox. Image
The thing is Teumessian, a giant-ass fox that was going around eating children, had a destiny to never get caught.

On and on the chase went. An ancient example of the 'Irresistible force paradox'-

"What happens with an irresistible force meets an unmovable object?"

Well.. Image
I was reminded of this story recently while reflecting on the crypto markets.

For years now I feel like I've been observing a titanic battle between two colossal but contradictory forces:
Read 10 tweets
Mar 28, 2023
"Oh no!!", the influencas cried out. "CZ was counter-trading us! 💔💔"

Chillax fat man.

So Binance had some affiliated entities trading on the exchange. Do you wanna see how deep the Rabbit Hole really goes?

Let's talk about CEX.

1..2..3..4 things to keep in mind. No cap.
#1:

The most important realization:

Every exchange in the world, whether Tradfi or Crypto is part Financial Institution // part Casino.

Investors and speculators coexist in the same arena.

Even the NYSE and CME.

The question is not 'whether' Casino, but 'how much' Casino.
#2:

The next question that needs asking:

Is the Exchange's business model acting as an impartial Poker Host charging a small $ rake per hand played..

Or is the Exchange the Blackjack table, trading against the users by trying to keep away sharps- and hoover up the dumb money?
Read 14 tweets

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