John Gu – Crypto Market Making & The Cold Start Problem (S7E30)

Corey Hoffstein and John Gu explore the intricacies of crypto markets, beginning with the cold start problem and John's career journey, including the founding of Caladan. They discuss liquidity provision for token launches, the impact of pre-market trading, and the influence of listing venues. The conversation delves into market-making business models, inventory risk management, and portfolio construction. They address challenges like spoofing, adverse selection, and the FTX collapse's impact on infrastructure. The episode covers DeFi liquidity pools, arbitrage opportunities, and advice for new token projects. It concludes with discussions on market maker misconceptions, the future of crypto markets, and John's personal interests.

Speakers

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Corey Hoffstein

Host • 28%

John Gu

Guest • 72%

Chapters

0:00	Episode and guest introduction
1:37	The cold start problem in crypto markets
3:07	John's career journey and the origin of Caladan
12:21	Naming Caladan
13:12	Providing liquidity for token launches
18:31	Impact of pre-market trading and evolving quoting strategies
22:00	Influence of listing venues
24:01	Business models and compensation structures in market making
31:02	Managing inventory risk
33:29	Aggregate portfolio construction and risk management
36:00	Spoofing and adverse selection in crypto
39:54	Impact of FTX collapse on market making infrastructure
44:47	Participating in DeFi liquidity pools
47:29	Arbitrage opportunities between CeFi and DeFi
49:26	Advice for new token projects on initial listings
52:04	Reflexivity between token price and project success
54:21	Transitioning to OTC structured products and bespoke derivatives
57:19	Treasury management for token foundations
59:49	Misconceptions about market makers in crypto
1:03:19	The future of crypto markets and TradFi integration
1:06:11	Personal obsessions: Puppies and AI
1:09:00	Closing remarks and thanks

Transcript

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