writer, investor @ufo_holdings | abolish p*ckleball
brooklyn
Joined November 2019
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I wrote a blog post about perpetual futures because I think perpetual futures will be a very, very big deal
Forever and ever
Perpetual futures have landed in America… and have the potential to re-orient finance as we know it
substacktools.com/sharex/rmD…
this whole “beta” vs “alpha” debate in VC atm is so tiring
everyone is chasing and piling in, it’s true. the prices are very high, it’s true.
but a sober look at the TAMs and potential revenues/EV generated can justify it.
imo the game is not about generating alpha specifically against other VC’s, it’s about generating alpha vs the broader market of assets. and in this time, even having the remit to invest in private companies is inherently alpha. very few are blessed with the opportunity to do this!
it’s the most exciting time in history to be a venture capitalist. i really can not understand anyone sitting idly by.
The most contrarian thing a VC can do right now is stay on the sidelines!
Here's the dirty secret of late-stage AI investing: Just like nobody got fired for buying IBM years ago, nobody gets fired today for overpaying next to the top Silicon Valley VC firms. You get fired for missing the round everyone else got into. So everyone knows the price is crazy, and everyone wires anyway – sometimes multiple times a year or even in multiple tranches with different prices happening simultaneously. Imagine buying the same public stock the same day at 3 different prices! Textbook prisoner's dilemma: every investor makes the rational call, and the industry ends up overpaying.
We're paid to generate alpha, but if everyone is piling into the same rounds at the same prices, we aren't generating alpha. What most of the industry is doing right now is buying beta with a FOMO premium. Though I’m extremely bullish on the overall AI opportunity, I think a lot of this activity with 2026 high priced early rounds ends up out of the money. Real conviction sometimes means sitting out the round everyone else is fighting to get into.
Founders who are fortunate enough to raise rounds before the music stops, should totally do it if they can manage the dilution. But check if your new investors can truly help you with customers, exec hiring, or strategic decisions if they are just following others and building an investment portfolio including you and your competitors!
Adhi 🛸 retweeted
Free alpha for early stage companies — bring on 1-2 emerging VCs who are out to prove their value as much as you are as a founder
@ayeshaaroraa is easily one of the highest impact names on the cap table
Now raising one of the largest solo GP funds in history 🚀
NEW w/ @julia_hornstein: $PANW CEO's daughter Ayesha Arora-Hughes is raising a $100M+ fund to back AI startups. Nikesh Arora is advising her.
theinformation.com/newslette…
this is a very beautiful and underrated element of how hyperliquid is designed
because it costs so much to list a new market, if the market has rules issues, there is this positive network effect cope for the ecosystem
it also strongly disincentivizes rules issues. @tradeparagon lost more in HYPE than they made on fees, and other deployers will notice that.
this won't be the last oracle or rules issue on hyperliquid, because mistakes happen and we are human. but implementing a steep cost is how you have a system that is both permissionless and very high quality on average.
Adhi 🛸 retweeted
Jeff gives his thoughts on options coming to Hyperliquid and HIP-4: "I think every one of these things as primitives has some crazy large story, similar to HIP-3, yet to be written"
"[HIP-4] is waiting for someone to come and really execute on the implementation"
"People often ask 'why can't you trade options [on Hyperliquid]?' Because options are so important in the traditional finance world"
"The answer is not that perps are better than options, they are actually very complimentary"
"I think HIP-4 is the primitive where options, or options-like payout curves can be built and scaled to the point where it's useful for users"
Adhi 🛸 retweeted
I’ve been DJing since 2018. I’ve played at clubs, small festivals, Burning Man, etc. I’m technically professional but it’s a side quest for me. I mostly play for / with friends to have fun and spread joy.
credit is a bottleneck for the compute buildout, and @liquidcompute’s approach is differentiated and important - check it out
Liquid Compute and K8 announce a $250M prepayment facility to help compute buyers fund prepayment capacity commitments.
This facility makes compute financeable the way every other commodity already is, and we are already finalizing our first deployments with a few large inference clouds.
We're proud to build this with K8 as we bring the discipline of commodity finance to compute.
Adhi 🛸 retweeted
can confirm knowing at least 3 ex-quants (T1 shops) making high 6 / low 7 figs trading prediction markets
paying very low taxes on gains (form llc to trade)
living at parents' penthouses (cuz its Manhattan no one has a basement)
among some of the smartest, most independently-minded, and interesting individuals I know
and also got plenty of time to hit the gym, spend time with family & friends, and go on dates as well
NY residents are collectively up more than $200 million in net profits on @Kalshi
the way I see it, traditional sports books charged egregious spreads for people to gamble
prediction markets allow competition to compress that spread, meaning people can bet for cheaper
and the profits from liquidity provision goes to ANYONE who's willing to warehouse risk smartly
instead of being concentrated in the hands a few corporations who ban anyone who's good
yes excessive gambling is bad
but as someone who trades perps, options, pred mkts, and memecoins for entertainment (and also perfectly knows how these markets work)
I don't think its the government's job to tell me, or any other adult, what they should do with their money
yes I know that some of my trades (especially fun options punts lmao) are negative expectancy,
but I actually don't think I can get such a powerful surge of dopamine anywhere else for cheaper
financial markets are competitive and efficient, and so risk is provided at the LOWEST possible cost
and as for the people who I am "giving" that edge to, I'd rather it be some dude my age building a trading bot than some multi-billion dollar cooperation
founders like @mansourtarek_ has allowed for ever greater opportunity for high-agency people, this is fundamentally a good thing
“They are in their parents’ basements making markets,” Fitzsimmons said. “That’s where some of the explosive growth is coming from.”
wsj.com/finance/kalshi-predi…
this is so fun
me and @sharedalbums went full acceleration and immediately died
second iteration I made $10B
We built a game to demonstrate the difficulty of pacing the frontier, based on a new paper from @andrewjkoh and @DrewFudenberg
Play online now and work your way up the leaderboard!
"civil war ... is of course, a bummer"
The @BostonCollege Investment Committee (an LP and my beloved alma mater) asked for a few thoughts on what's happening in AI. I recorded a test run yesterday morning and then shared it with my partners, who encouraged me to share it more broadly... so here you go!
This is not a sales pitch, it's just a reflection on what we're seeing. And it wasn't intended to be shared, so please pardon the rough edges.
loom.com/share/c016702964a04…
if you’re new to prediction markets, you probably have no idea about the weird underbelly that is election nerds side betting crazy niche political props in size
i can guarantee you this spawned from a heated debate in a private discord group chat where polling crosstabs are analyzed carefully
this is great and long overdue
markets like mentions are so obviously net negative for the prediction markets industry. at some point we are just asking for trouble. let’s not!
.@CFTC Releases Staff Advisory on Mention Markets: cftc.gov/PressRoom/PressRele…
the best prediction market traders are truly built different
absolutely the most intense lifestyle of trading (that is easily accessible to the masses, so not including like rare earth metals guys running around the Congo)
you're constantly on as there are no 'market hours' and news move things super violently and at random times
Adhi 🛸 retweeted
Compute today looks a lot like power did in the 1990s. Some thoughts on how power evolved from a vertically integrated utility business into a physical and financial market, and why compute may be following the same path:
linkedin.com/pulse/short-his…
everyone who is trying to value hyperliquid as a company is completely missing the point.
HYPE is not shares in a company that is valued with P/E ratios or revenue multiples
HYPE is simply the token needed to participate in the system, and all of the activity in the system creates fees that buy back and burn the hype
thus, the hyperliquid protocol has deep network effects and flywheels that will send the token higher. there are many legitimate, useful, and non-speculative economic reasons to buy and hold HYPE, and there is only one reason to sell HYPE (that you think HYPE will go down).
this is why the token is priced this way. it's not a company.
Qiao Wang says a P/E of 20 for Hyperliquid is not cheap: "Which trading product has durable earnings over 20 years? None of them"
“I don’t mean to pick on Hyperliquid. It’s every trading product. There’s no switching cost of liquidity”
“What does a P/E of 20 really mean? If you believe that a P/E of 20 is fair, what you’re really saying is that the earnings over the next 20 years, discounted, equals today’s price. But which crypto product, which trading product, which financial product has durable earnings over 20 years? None of them. They’re always under competitive threats, always under newcomers”
“I think a P/E of 5 is fair. And even then, 5 is high”
Imran: “If you see what’s happening in the onchain world, you could see one product instantly get success and the other product instantly go to zero”
Qiao: “These onchain games, a P/E of 0.5 is fair. Meaning it’s durable for a few months”
Imran: “You have to be extremely careful, because users have no loyalty to the platforms. They’ll go wherever the incentives are. The switching cost is basically zero”
Adhi 🛸 retweeted
Huge shoutout to @eightyhi, one of the sharpest minds in early-stage markets and the catalyst for this round coming together along with @maxglik
absolutely thrilled to be a part of @liquidcompute’s journey via @ufo_holdings.
Ronit, Aarav and team have taken the more arduous path of getting a regulated DCM license, which allows them to own the stack to actually execute compute futures trades.
this differentiates them from every other compute futures project - keep an eye on this team!