Rumors are that was the idea behind $SPCX IPO with xStocks.
There’s only one 1T person (and just for one day) but I have already seen thousands of advice on what’s better than that, what’s worse, what should he do with that money and what are the 5 steps to become one in the future. Relax people, you don’t need to have an opinion on every topic.
This article gives a good educational content regarding price discovery and lead-lag relationships. A couple of thoughts from my side:
1. Some of the numbers are correct, but a lot of are wrong mostly due to the fact that analyzing HFT data with 10/50/100ms windows is a bad idea.
2. Crypto is already very, very sophisticated in terms of the latency on the best exchanges, so the windows should be as small as possible in order to give you decent conclusions.
3. If you think that Binance does not lead Lighter on ETH (and that's the conclusion from the chart) then you cannot be further from truth.
4. Lighter does not lead Hyperliquid in any trading sense. You have this kind of chart only because of the matching engine differences, not the actual leading. It's all caused because from those 3 exchanges, most of the information comes from Binance and if execution is faster on Lighter then it will always be earlier than Hyperliquid even if this kind of information gives you nothing that you can monetize - it's no the methodology that you are interested in.
5. Assuming that Binance leads all the markets and you have exchange A in the same datacenter and exchange B in different, according to this methodology A will always lead B even if A is tier-5 zero-turnover exchange and B is Bybit. The numbers are ok, but the methodology is wrong if you think about price discovery from HFT perspective.
6. Peak-lead-lag analysis is good for educational purposes, but it's not what is measured or analyzed in HFT and it's not what you optimize you algorithms for.
7. In most cases Binance is way faster than it is on the graph (and a lot other exchanges are already much faster). The crypto has changed massively in that aspect in recent years.
8. Ligher impact on price discovery is negligable.
9. Final remark - the beauty of HFT is that the devil is in the details. If you want to make a proper analysis on such thing like price discovery in HFT perspective, the number of assumption that you need to test, the number of timestamps that you need to consider and the number of methods for noise filtering that you need to apply is tremendous.
@choffstein
I decided to write a series of short articles about my use of AI. It won't be a series written by an OpenAI or Anthropic researcher, but by a person who just uses it on a daily basis. I use it for research, for programming, for learning new things, as well as for leading a team and running a business. I bet that you are not going to read anything groundbreaking here, but rather simple and powerful (for me) things that I have found very useful across different applications. I think that in most things, like research, running a business, or using AI, we should stick to a couple of powerful things that we need to master. The same thing is true for a healthy lifestyle: you can read tons of papers and listen to thousands of Huberman podcasts (which I like as well), but the most important things will still be to train a lot and avoid eating too much bad food.
Follow-up chart for the article. I have made a simulation regarding how fast you really need to be profitable. Assuming 2bps taker fee, for this signal you need to be the fastest in 51.1% (on average) of signals to be profitable after 1s. You can see how competitive some latency-sensitive signals can be.
Every time you have interaction with a traditional bank and you need to send money on Friday or at the evening (especially significant amount) you know why people thought about stablecoins. I know that crypto is infected by memecoins and predatory PnD market makers, but it still has some ideas that can put some pressure on old, not working properly things.
First part of the "Winner Takes It All" series on latency-sensitive signals. One microsecond can mean all-or-nothing for such signals. What "Winner Takes It All" really mean and does not mean in our examples?
Lately I've been posting less and building and researching more. When your main market is slow, it's time to sharpen your process. The revolution that we are in helps a lot with that. Time to lock-in and stop standing on the sidelines.
The thing that makes me sad is the fact that a lot of articles are made in such way that you know that at the end the author wants to sell you the “masterclass” or other thing that magically will fix the problems mentioned in the article.
Reverse the thinking - think not only what you can do, because AI gives you the chance to (like building apps, writing books etc). Think about what are the most important things to learn and do if anybody can do those things? If anybody can do everything, how will you make yourself valuable?
Except almost nobody was using crypto to solve their problems and all people thought about the dream called “adoption” (which btw is happening now and crypto has the worst sentiment ever).
Always double check the data before conclutions:
1. Volume is based on the BTC sold, not the USD value, so those two periods should not be compared.
2. Second period is fee-free period for BTC pairs on Binance, so you basically could trade for free.
Remember, if your assumptions are wrong, then all your conclusions are wrong.
