James Davies

Transforming the world via digital assets. UK Politics. Alternatives to Clearing infrastructure. Scepticism. Physics.

[James Davies @jlldavies]

https://t.co/xOW3XlyEls

[James Davies @jlldavies]

@rossium Eventually? Eventually makes it an easy question. The interest part here would be if we assume he sobers up in say 8 hours. That’s a big number of steps. Use Stirling. Root of 2 over Pi * N. In 8 hours about 99.5%

[James Davies @jlldavies]

@or3573 Perps aren’t good hedging tools. They drift from funding and get squeezed. Perps are almost entirely basis or speculations trades. Hedges not so much. Institutions hedging real flow don’t use perps. Would be massively more expensive.

[James Davies @jlldavies]

https://t.co/VApq0knlaD

[James Davies @jlldavies]

@or3573 What’s the use case for RWA perps that isn’t speculation? Ultimately the cleared portfolio needs mixed utility.

[James Davies @jlldavies]

@stacy_muur Building a full QCCP DCO with bank engagement enabling promised collateral to be put to work.

[Tom Dunleavy @dunleavy89]

The CT VC response to this tweet has been inspiring, yet it also still speaks to the amazing consolidation in the industry.

38 QTs or replies from VCs that they are investing despite this tweet having over 600k views.

Awesome to see, but 5,000+ in 2022 to <50!!

If you are raising, please reach out to one of these fantastic investors (including us 😇).

Marking this as the bottom of investible $ and allocators in the space.

[James Davies @jlldavies]

@austincampbell We so very much need to talk. Point 3 is spot on it’s hard verging on impossible and doesn’t even address the complexity of assessing security. Clearing is what is needed but the experience to deliver it. That’s not in either tradfi or digital assets alone.

[Christopher Perkins 🦅🌎⚓️NYC @perkinscr97]

Game time.

On set at @business

[James Davies @jlldavies]

@shafu0x Worse after accounting costs the yield can be negative relative to risk free rates. And people wonder why the institutional money is only around the edges.

[James Davies @jlldavies]

@joeyreinberg_ From FTX to today trust in black box models has been crazy. If you don’t understand it don’t use it. General rule. If it has great reporting and regulation then this can be a proxy. If it has an unknown set of security auditors and anon founder then avoid.

[James Davies @jlldavies]

@perkinscr97 Free market for gambling though.

Years ago I met the only fans founders. They were dead set on wide usage but got pulled into the revenue stream. Will Kalshi be able to go institutional rather than retail gambling? Andy Ross is onboard but the temptation is strong.

[Omer Goldberg @omeragoldberg]

** Correction on key compromise **

A week ago, Drift moved to a new multisig, created by a signer from the old multisig. This signer did not add themselves to the new one.

The exploiter also initiated the proposal in the old multisig to hand over admin control to this new wallet.

Of the 5 signers on the new multisig, only 1 came from the previous setup; the other 4 were brand-new.

The wallet was set with a 2/5 threshold and a 0-second timelock.

~Five hours ago, that sole carryover signer used the new multisig to propose changing Drift’s admin.

One of the new signers co-signed a second later, instantly meeting the 2/5 threshold.

With no timelock in place, the transaction was executed immediately.

** Note **

Some of the relevant Solana programs are not verified, which limits full analysis.

We're continuing to dig into the onchain data and will publish a more thorough post-mortem covering the multisig migration, Solana DeFi contagion, and vault exposure in a follow-up.

[James Davies @jlldavies]

Building and building.
https://t.co/ysjL7BLLF2

[James Davies @jlldavies]

@perkinscr97 Jelly. The passes handed out for manipulation seem to be everywhere. No consequences for running these platforms.

[James Davies @jlldavies]

Ran the numbers on 11 margin architectures. The speed problem is always the same. SIMM is fast. Full VaR repricing is accurate. Getting both without forcing members to rebuild is where everything breaks down. Full breakdown on LinkedIn: https://t.co/anCRhU0hOj

[Wolfgang Rückerl | DCN @WRueckerl]

Retail perp traders can't hedge the funding rate.
No options on it. Can't short the carry.

You just pay it every 8 hours. Whether you wanted the trade or not.

That's not risk. That's a tax.

[James Davies @jlldavies]

Ninety trillion a year in perps. Almost no independent clearing. Market makers posting collateral on every platform separately with no offset. Vertically integrated venues, risk models with multiple documented failures. The infrastructure hasn't kept up. Time to build it.

[James Davies @jlldavies]

@andyyy Which ever one cracks HQLA collateral first.

[James Davies @jlldavies]

@AGaryFlagler @FIAconnect @BMVMercados It has to change. It must change. We’ve built a full alternative ready to start.

[James Davies @jlldavies]

@CarolineDPham "payment stablecoins" is a killer line that you won't find on many Stablecoin VC pitches, big market limiter.

[Yuval Rooz @YuvalRooz]

CZ is totally right. For a while, my go-to answer to “Why do we need privacy?” was “because business will never be okay with anyone seeing their business activity.” I’ve recently switched to a much simpler one: “Ask the people being kidnapped in France ‘would they prefer privacy?’”