Why Market Making is Key for a Crypto Market Recovery

foreign and then I'm going to need your help because crypto Market making to some people it's a foreign language okay um so let's start from left to right um David would you be able to introduce yourself explain who you are what you do and also answer me one quick question that question is if you could sum up 2022 in one word what word would you use for example my name is Joe I work for coin Telegraph and 2022 for me in one word was a car crash I mean that's two words but you get the idea okay over to you David okay I can start with the answer like I can say like turbulence like turbulence Zone okay let's let's use two words as well turbulence yeah so if you talk about me like I'm head of Business Development at wide beat what is white which is a crypto decorate exchange platform uh founded in 2018. and uh it's one of the biggest European exchange right now and one of the biggest Equity providers in Europe very good every Tuesday uh introduce yourself and describe 2022 in one word when the mic's working when the mic's working it does right um no I'm Steph I'm at kirok I oversee of our Market making operations um words in 2022 disappointment I think I was doubting between shame and disappointment but I think disappointment makes um is a stronger one and is maybe a bit more positive um I think predominantly due to the fact that um yeah all of the things that we try to solve um you know by embracing an amazing technology was proven to be the right solution so centralization um under the wrong circumstances and the wrong guidance um you know brings out maybe not the best of people and so disappointment is the reason why I chose that a bit more about gearok so we're a market maker um we've been around since 2017 active on about 85 exchanges globally on the OTC side spots derivatives Etc and we provide a full Suite of liquidity solutions to both um you know crypto native entities as traditional finest entities when they want to enter the ecosystem fantastic thank you Steph Patrick over to you hello everyone um my name is Patrick working for crypto Finance we're owned by Deutsche bourse and 2022 one word is difficult it's the one yeah it's difficult but um I would say it's not everything that is what has been done in traditional Finance is wrong regulation is not always wrong that was 22 words I think sorry okay not to worry um John hello everyone John Murillo Chief dealing officer at Pizza Brokers we are a liquidity and Technology provider 2022 a year of challenge challenge okay we have an optimist on the panel today fantastic hi everyone I'm also Optimist I think I will use the word resilience because you know we've seen the worst crypto environment since ever I guess I'm nobody could expect what happened and still Bitcoin is trading at 25k so it's uh it's still it's still very bullish for what will happen in next years so my name is Grimes you and co-founder of flowdesk we are Market making firm we've been operating since 2020 and we have offices in Paris and Singapore okay fantastic um so as you can see we have four market makers and one exchange on the panel so you're in very good hands today to understand why Market making is key to a recovery um but first things first I said I was going to ask you guys a couple of questions raise your hand if you're aware that we are in a bear Market okay if you're not aware then yeah as BM just said we're 25k Bitcoin it was 60 something last year um raise your hand again if you know what a market maker does in the crypto space okay decent that's a decent showing okay um for the rest of you you're in very good hands and I've also asked uh chat GPT to give me a really good definition of a market maker because I'm a journalist who does lots of you know highly qualitative research and um I put a little bit of spin on it so I'm going to ask you guys to check what you think of this definition okay um so where's my definition going uh bear with me one moment sorry guys thank you is disappeared here we go so a crypto Market maker is like a cool bartender at a very high-tech and unashamedly nerdy cocktail party they keep the drinks flowing I.E provide liquidity and ensure everyone's having a lit party maintain order in the market while secretly hoping no one gets too drunk makes a fool of themselves and gets and ruins everything I.E you're managing risk and getting the bounces to kick out sandbankment freed market makers are the ultimate party planners but instead of balloons cake and a banging Spotify playlist they use leverage algorithms and Order books what do you make of that definition is that something you can work with today Steph you're nodding your head but there's a bit of a um it's a great definition um but it's it's it implies too much power to what a market maker does and it's something that I don't like because it's actually the you know the reputation that we have um we're actually the Dance Floor we're actually the music we're there to support um you know the party um we're there at all times we're there at you know 9 00 p.m and we're there at 5am in the morning um we're there for people to without they know it's enjoy the party right because I think it's normal to have music at a party and we're there to be the you know the strong Foundation which is the floor um because it's actually needed for economies to be built upon so I think I would rather go for these type of definitions stopping my head in the same style but um you know I think what I what I really want to avoid is that people think we're the bartender that we control who drinks or not okay I'll avoid that analogy in the future um I think there is also a very important part missing on that bartender analogy um someone has to do the logistics someone has to make sure there is enough beer in the back and stuff for the drinks and Market infrastructure is super important for the market makers otherwise you just have fancy fancy um flashing prices on a screen but if you can't settle or if you're not comfortable with settling certain trades with certain counterparties the the marketplace is not as attractive as it should be and everyone knows that you know when a party runs out of alcohol that's the end of the party right so when the market maker runs out of liquidity similar thing um David you're the exchange in all this are we being too kind to market makers presumably they gave you a hard time in 2022 or are you also happy with this analogy that they're the party makers the party planners the logistics guys and also the bartenders it's hard to say I mean like last year was very funny here like I can I can be sure that it was very funny and without market makers we were like in the whole industry and would be in the trouble I say and uh so if we speak about like uh music like Steph mentioned like uh I can support the idea that market makers like add some music here like to the party so yeah like I can support this idea cool um so let's move on to the first topic now because I think we all have a pretty accurate uh explanation of what a market maker does um in traditional Finance spaces it's rare that you get market makers to come out and speak publicly and it's even rarer still that they come and sit on stage at you know quite large blockchain or Trad five conferences um so guillem why am I sat next to you as a market maker why are you transparent and public in the crypto space whereas in the traffic space that's quite right I think it's an excellent question uh to complete the analogy of the bar which was really good we we really need to keep in mind that it's uh it's not one bar it's uh dozens of bars some of them are centralized decentralized they open 24 7 365 you have so many cocktails 20 000 cocktails available you don't know what's in them and the prices are not in US dollars they are in Euro in Bitcoin and whatever crypto um I think you know it's Market making in crypto is is very different from traditional Finance indeed it's traditional Finance it's mostly gonna be you know proprietary trading firm operating of their balance sheets trying to generate p l we'll talk about Alpha we'll talk about shop ratio that kind of things in crypto there is more technological approach because the assets are much harder to price again there are 20 000 Cocktails so there is no centralized Market maker we can which can just trade them very actively and make money out of it because these assets are unreadable so I think in crypto we have a much more technological approach um some of us use the wording of Market making as a service where the risk are actually splitted between the market makers the projects and some other actors and and I think that's why it's very important to to come out and to speak because I think there is a huge responsibility on our shoulders not only market makers to come out and give the tools for transparency to the Token insurers so that indeed they can assess the work that is done so it's uh it's it's very important that the market makers work enhanced with the exchanges and with the token insurers and I think that's that's why we're here today okay John what do you think do you agree there's a very makes here certainly um just like to make a small clarification I'm not a market maker I interact with all of you guys essentially we put together through our technology all all of you and we distribute that take to all of you um the analogy was fantastic I I think very well said is there is a party out there you just choose which party to attend because everyone has a party and from our perspective in the crypto space specifically I come from traditional Finance but nevertheless our approach on crypto makers is no different than it was in my old days where USA's counterparties where you pick and choose who you want to connect and integrate I think that's the key into creating a reliable solution but just to compare those two scenes then coming from a Trad fire background why is it that in the crypto sphere market makers are so much happier to be on stage publicly known and you know transparent you know we saw with GameStop last year that in the Trad fire space you know with Melbourne capital and all the shenanigans that went on there that suddenly you realize oh market makers are actually uh they could be bad actors in this space in the crypto sphere I can reach out to market makers tomorrow and I can speak to them quite openly why is that well I I think they're in a better position to answer that question rather than myself um but from my perspective the way I look at it is traditional Finance guys you will never get them here uh in a million years crypto is more open and transparent uh industry in that sense and I think it's more of a cultural difference between traditional finance and the crypto world interesting okay so let's let's ask the market makers then I do have a theory um market makers are super competitive um especially in the trepify environment it's even below milliseconds um who defines the race or who wins the trade and who makes the money in the end and in in trapfi they don't have to worry about logistics because the whole infrastructure is built it's there it's working they just need to be fast on the exchange on the screen so they don't really like to talk to each other but on the on the crypto side the infrastructure is not really there it's quite fragmented and as you said you need to figure out with who you're gonna trade which counterparty is giving you the most beneficial effect for your Market making business and reputationally you need to check with who you want to sleep after the party so it's people are more open and talk to each other and this helps to basically get to crypto Market infrastructure closer together the right people start to connect and it's a bit like Facebook the more connections you have the more powerful and efficient it gets wow okay so there's a real value to networking in the crypto space for market makers so if you're nodding your head I am yeah um I just wonder if in 10 years they'll be like remember that you were on a stage with guillem and Patrick those are the good old days we were all friends um you know I hope that That Remains the Same actually but I think that I I share a similar Vision as Cana and Patrick on that one is that we are in a in an industry that is is extremely exciting um where transparency is is part of its USPS at its core so why why all of a sudden become opaque on that front but also the the concept of liquidity what market makers bring to the industry is it facilitates adoption right so working closely together with with Founders and innovators on that front is is actually pretty essential when it comes to their go to market strategy or you know with their you know when they're building out their Vision Etc and I think that that collaboration which is my maybe not apparent maybe on traditional Finance where it's more of a an alpha chasing play by having a delta neutral strategy Etc is maybe the difference um but yeah I hope I hope that's that transparency in that that collaboration exists um and keeps existing um and I think the infrastructure because it's so fragmented and because it's not even a differentiator today we all struggle with the same challenges you're just like you know let's let's build it together but when it's really good you know we'll reassess but um no I don't think that's going to be the case and and I and I welcome collaboration the space is going to grow 100x right so if we all grow with it I think we'll all be very very well off and very happy and it's going to be a win-win situation okay and just to check David you are friends with the market makers as well right sure why not good um Okay so we've got a layer of the land um I want to look back at 2022 before we look at 2023 and Beyond and understand if we can get this crypto Market recovery thanks to the helps of the the efforts of you guys and of course in 2022 as we've all Illustrated with our first word um all hell broke loose in the crypto markets FTX was a giant fraud Luna went to zero and exchange after exchange went insolvent fastly you can say the words Ponzi scheme however it appeared um to me anyway that market makers held up pretty well especially if I compare the performance of market makers last year to the performance of market makers in the last big crash you know 2017-2018 um firstly like would you agree with this statement and like to what extent would you evaluate the performance of market makers in uh in 2022 I'd like to go to John first if that's okay um 2022 an unforgettable year I think is in my career in the crypto world it was the toughest year of all and it was one event after another it's like a domino effect of bad situations I can only speak for my or from our relationships with guys like yourselves here that some of them perform exceptionally well a they they were stable at a critical point which is uh the key to assess counterparty risk they manage to price fairly despite the conditions and in our view I think yes some bad apples got out of the industry but those who stayed will become even stronger and through time this is a testament I've been in the capital markets for 23 years I've been through so many different things and what I saw last year it's an indication of great things ahead I'm not trying to be just an optimistic it's just facts of course those challenges that we saw last year so many firms and we interact a lot with our makers it's part of the liquidity relationship you know to improve pricing tightening liquidity needs of our clients Etc because if I can get that business in it means we all win so if you have a good relationship with your makers and they price that accordingly I think it's a win-win for all so overall as a performance I think it was pretty decent for some of us okay I mean not myself as a maker but for guys like themselves go ahead Steph what's more challenging for a market maker is a 10-year bear cycle than an actual aggressive event like last year right so there's a few things because of that I think first of all due to the lack of professional infrastructure your county or party risk is rather decentralized right if your act almost 40 exchanges you need to have capital on 40 exchanges so if one blows up in theory you know 1 40th of your capital is is at risk right in this case it was the second biggest liquidity source so you know as a market maker you had to you know keep significance let's say a portion of inventory on that venue to be able to price accordingly um but that's already one where on a counterparty risk perspective you're pretty de-risked right so if somebody had a massive issue it showcased either some type of a directionality preference on that specific venue and you're running specific strategies but if you're through Market neutral the alternate entity you're going to be pretty diverse Diversified from a counterparty risk run secondly the revenue model of a market maker is to make little little tiny bits per trade right so you do a lot of them right but you make little tiny bits right um if a volumes if volumes go down over time that's when you're going to be seeing okay where where is the possibility for us to be a service environment at the same time also be be able to benefit from from the volumes and the liquidity that's in the market there's a trading that is happening in the market and I think that's more of a risk than the shock events that we've had last year notwithstanding that it was the biggest lender biggest liquidity providers Etc so you have to very careful in that front and you have to be very you know risk off and and act accordingly so even though last year you know it was a huge crash the volumes were so high that you're still making a bit of money along the way whereas if we had a 10-year bear which obviously no one wants then there would be less opportunity to make money because there'll just be fewer trades going wrong okay Patrick is that fair summation probably yes but I I would like to go back to you first um statement I'm a bit more negative um I mean we have seen let's start at the beginning the the biggest issue in the in the crypto currency trading ecosystem is capital is balance sheet and we have seen one of the biggest credit or liquidity providers um Genesis going down a lot of participants were basically that they relied on the capital they were Distributing on um in the end on a on a fairly cheap level so they probably mispriced it and then we had the other venue FTX that went down which was one of the most Capital efficient venue to trade on so a lot of market makers had Capital there because it was just the best venue to Square your risk um and I think the the cryptocurrency market lost quite a bit of um um how shall I say that I think we stepped back quite a bit because we do need capital in the space we do need balance sheet we need large players that have the right framework and set up to deploy Capital to the market making firms or to firms that are better and quicker in showing prices but underneath there needs to be a reliable partner to settle or clear the trades okay I guess is that credibility loss right that's undermining the capital there um to the point about the 10-year bear and they're making money there and the second point if you want to address that we can come back to you or well in general I don't like bear markets okay I think you speak for everyone there um there is there is so much to say on this topic so I will give you a very subjective answer um so so first of all for us it's a bit different because we have a different business model where sorry we provide both the the infrastructure and the trading team directly to the Token issuers so we don't make money out of what we call the spread of the volumes this is retained by by our clients uh we just charge a monthly subscriptions and um and of course it's a it's a lesser lucrative business model we don't also we do not rely on what we call Corruptions which can also be very interesting in Bull markets um so yeah our approach is is very different and um and yes we make much less money on paper um anywhere between less 10 to 20x less but you build a much more robust business model all the clients we started our business with they are still working with us today and you know we've just been piling up these subscriptions we are doing 3x you're on your and yeah everything is fine and and just like our colleagues you know we there are so much opportunities that are opened by these moments where some market makers are collapsing like Alameda it's giving a new door through two new projects and um and and the last data point that I think is interesting for US market maker is if you look at the level of funding in the crypto space right now depends on how you calculate it but it's more or less one billion dollar per month into token projects that's 10x what it was during the previous bear market so there is still a huge inflow of money and yes it's an excellent moment to start a company the funding is widely available for preceded seed startup for the later stages it's a bit more difficult and that's really the correlation that we have there are new projects if there are new incumbents we can serve them we can give them the technology and that's why our businesses are still quite viable and you know that personally firsthand don't you you just went through a successful funding round uh yeah we announced in last Junior series around exactly yeah well there you go there's the proof okay um David before we move on to the next topic um regarding you know 2023 and looking onward um is there anything you'd like to say about the 2022 the loss of credibility the fact that market makers somehow skate through it from The Exchange point of view yeah here I can say that it was because the credibility yes we had like some say step backs however like uh I don't want to speak a lot about like situation about FTX like because this is what we have right now right uh uh here like we had to take some lesson from this situation and understand that we have to bring more uh safety places more secure places in the market like to give the to get the trust from the big players from market makers so they can feel themselves comfortable to work with uh like psychopreneurs like ours right so [Music] I can say it's like like last year like was very hard but the in the other hand it was very uh good in terms of lesson perspective like what we have to do in the future to get the Stable Market stable industry to grow in the right way okay very good I mean yeah one of the key topics of this year and for the future I'm assuming is going to be regulation I mean I know the SEC is looking at crypto uh through the scope of a sniper rifle at the moment um this question might seem quite basic but in light of what we just discussed and the lack of regulatory Clarity last year I think it is important to address um what regulatory considerations do you have to take into account as a market maker in the crypto Market does anyone want to jump straight away at that question okay well I guess you might need to refine the question a bit on what venues and how how the venue is regulated um we are on the fully regulated side so we're not that fancy and we we do markets on let's call it the treadvice setup exchanges so fully fully regulated with rule books and everything and trade cancellations or mistrates and all that kind of stuff the the Trap fire Market already knows um but it's for the clients we talk to on the other on the other side which are mainly Banks they just need that they they have massive issues if they need to go through their risk and compliance department and tell them I want to onboard on this and that exchange and they ask for risk policies they ask for rule books and the exchange goes we don't have that so it's going to be a difficult conversation so for us it's like we try to get the the very high regulated Financial Market intermediaries into crypto on a handful of venues that are easy for them to onboard wow so it's not even The Regulators that are driving that level of sophistication regulation it's actually the incumbents you know it's the Trad fire if you want to onboard the Trad file you have to have that level level of Regulation yes but given by the regulator oh okay right yeah um Steph would you like to come in there with um you know addressing regulation in 2023 yeah it's it's essential um and it's also essential for entities like us to to be able to to expand our operations and and to confidently also invest uh in this physical photographers that we're running uh I think the lack of regulations gives unclearity and it's very hard to operate under an unclear uh environment um so it's extremely high on our list we have a regulatory team and a compliance team Etc focusing on nothing else and speaking with The Regulators um it is a it is a collaboration right because there's a need of a lot of Education as well um and I think as as entities that are rather interconnected within the ecosystem right we are facing custodians we're facing Banks we're facing exchanges we're facing you know traditional institutions that you know want to get into the ecosystems we do have those insights um but I'll be honest we would love to have even more clarity right because we're ready to expand we're ready to invest into the X system but a lot of it's is being you know hampered or at least stopped because of the lack of clarity so welcome it a lot so I think it's it's essential for uh for you know this industry moving forward wow it's interesting to hear that it's almost like antithetical to like the whole crypto thesis like we don't want to be regulated but here we are market makers are crying out for it you know it's it's it Sparks Innovation right and I think that's the what we've seen over the last 12 years it's it's that that mentality of you know questioning you know the establishment has been really great and it's sparked Innovation and and it created a lovely ecosystem and I think you know I'm I I'm wildly in love with Bitcoin for example because of that um at the same time it's it's we and this is sometimes I wouldn't call it a frustration but sometimes I I wonder you know everybody says okay we don't want to talk with the banks we don't want to know what they're doing Etc but they've actually been 340 years they have a lot of experience on how to do things actually or how not to do things so I rather have a collaborative approach on that front and the same applies to The Regulators then then US versus them um in the end of the day the market will decide what is most efficient and the market will decide what's most interesting to have on their balance sheets um so let the market decide but do it together okay and I still think there should be I really hope so a parallel ecosystem so they there should be the decentralized um ecosystem where we can just plug in our wallet and trade on any taxes whatever token we want without anybody telling us you cannot move that token or you cannot trade this token because of this and that but there is also the other side needed where the banks are quite helpful in in showing us what needs to be the setup so they can open it up for their more conservative clients that don't want to plug in their wallets and self-host or self-store their coins you have to have the two ecosystems and the one ecosystem the decentralized one is going to be the Innovative one you will see new Concepts coming out there and some of it I really hope so swap over to the Trap price site and make it more efficient optionality you want to choose to self-custody Great you want to have it done by somebody else and pay him for that great right so being able to have those parallels great that you mentioned that because it's that's that's the exciting part right that's why we're all here and that's why we're also excited about this technology so optionality yeah okay is there not a risk that you know when Regulators come in and they come in too hard that might stifle the innovation yes that's that's very likely and that's already the case so we see it with what's happening in the U.

S right now I mean I'm sure most of us here have a strong conviction that no staking is not a security there is nothing wrong in having a stable coin if it's done the right way um but we need to highlight that it's just a mechanical reaction to what happened um in the last year and we we are completely aligned with with kirak on that front we are pro-regulation at pro desk and just like the energy with the bar it's a very complex equation because you need to be regulated globally so we are registered in France we are planning regulatory program in Singapore we follow the same path in the US so again crypto makes it 3x more complicated um but regulation is not enough um because our Regulators obviously are lacking time they always have this lag so so I think that there is three components the first one is obviously yes we need to be regulated and compliant in every jurisdiction we operate that's obvious and we'll do it we are doing it but the second point is we also need self-regulation because all regulator is not going to tell us you know what we should do we build cars that can drive at 300 kilometers per hour and the regulator is like not worthy they don't understand it when there is a crash they're like okay now we stopped four cars no no guys we just drive at one 130 and that's good and that's perfect um and the last point is the transparency because once we've said that we also need to build the tools to show that we are transparent and obviously everything that is happening on chain is very helpful in that regards but we also need to provide all the analytics for the counterparties we're working with for the token insurers we're working with so that they can assess our work and at the end it would be very Darwin the actors that are bad and that cannot be transparent will be mechanically excluded from a business perspective and those who bring this value will obviously have more business and they will make science progress okay I maybe should have used the car engineering metaphor earlier rather than the party planners I think that makes a bit more sense um Johnny I'd like to hear your thoughts on the optionality that Steph and Patrick were talking about earlier is that the sort of thing that would please you know both parties you'd have your your D5 d-gens and you'd also have like those that don't want to you know custody their own keys look after their own their own funds be self-sovereign uh we have a quite diverse client base and we get all different types of requests you cannot fulfill everyone's needs but I will share what you guys have stated before it's people must be given a choice and I am pro-regulation to some extent obviously if we're over regulated then we end up in a situation where this whole uh phenomena right all this development of crypto goes out the window it defeats his own purpose but regulation brings transparency transparency ultimately brings credibility and credibility is what everyone is seeking for I think some of our biggest clients for example they only do business a trust B we're very transparent we show basically our cards and let them choose what is best for them a lot of people like to keep certain elements of their operation to themselves and I'm not disclosing here Market making strategies just for the record I I mean uh you know what sort of business they're running so I'm Pro on the regulation side of things it's it's good for the industry but to some extent and I think we all play a role in it if we can contribute to Regulators in sharing our knowledge I think we can have a self-regulated industry that it's efficient enough you go so we're not all getting too drunk at the bar and we're not driving our cars too fast that's not good okay yeah um David before we move on to the next topic I just want to check from The Exchange sort of point of view because exchanges seem to be under the most scrutiny right now what with you know kraken's situation with the SEC um is is the regulation of cryptocurrency market makers is that something that could influence exchanges um management for this year or is it you know completely separate to your operations well I can see that regulation is something what we have to have here in in our industry because as previously was said like uh regulations will bring us transparency transparency credibility right so um but the most important Point here is how they will be implemented here in this market and we are ready to work on it like we are ready to help Regulators to do it correctly and I can even say more if it's about like our exchange right so like I don't know you know or not but we were founded in Ukraine right and we are currently help the regulator in Ukraine like to do it to make like correct lows we got in the cryptocurrency OR regarding the whole industry itself so if Regulators are ready to and they want to bring more transparency in the market they have to hear us like the big players exchanges market makers like like big players as I said and understand that what they can do and how to do it in the correct way but in the conclusion again like regulations are very important here because without it we won't get uh we want to go like forward in the correct way we won't have a correct grow of the market Okay cool so moving us that sort of last topic which is a bit more futuristic um as I alluded to earlier I asked chat GPT a machine learning bot to help me write this speech today and it was I actually did it myself and then because what it gave me was crap but still the point stands the AI is getting better and better we are living in an age of you know exponential technology market makers as I understand it most of the time the algorithms working in itself and you're only intervening when there's a problem or you know when the order book messes up um AI of course in in this Arena would Thrive one would assume um how are you guys approaching this new technology are you already harnessing it and to what extent could it be you know you automate yourselves out of a job in a way kill him well I mean it's uh it's almost a philosophical question now because on the AI side we are probably a few years away from the singularity event where the AI will be able to fulfill itself and keep growing maybe 10 years away who knows um so to some extent obviously yes every job can be replaced even yours or maybe tomorrow tell me about it it will have someone speaking and and and stuff but in the short term there are multiple components from a market making perspective first of all the the ground infrastructure the connectivity there is no real Alpha to extract from an AI perspective and I could could not cut it better you know it's very simple it's low level language it's API integration that kind of things then obviously on the pure Market making quantitative side there is a lot of machine learning generally speaking to be to be added and it's been 20 years that that AI to some extent has been um has been influencing the way the algorithm work back testing and and so forth so there is already maybe you know I don't know it's how to give a number but the intuitive number maybe there is 25 AI in what we do um humans controlling the algorithm are also AI to some extent we could argue so I think Market making however particularly in crypto where it's heavily fragmented will be probably the last area to be disrupted by AI yeah one of the last I guess um not too concerned uh and and again there is this typical thing which which we highlighted at the beginning which is important which is that market picking in crypto is still a bit different from traditional Market making some of them describe it almost as Investment Banking from time to time with the relationships with the exchanges getting the investors on board working on some you know less scientific topics like talking economics and so on so so it's very unlikely that you know in the next five years or ten years AI could could disrupt it but uh but who knows let's say for now and then I want to jump in before I get automated out of this chair um well um I I can add something to it because we're not playing in the Champions League in Market making we are like fourth Regional league and try to make our way through it but I always fall a bit back into the infrastructure part because our mothership is um they play in the Champions League for infrastructure and I see AI as a potential um support in um if you run um a custody business and if you run custody business for cryptocurrencies and you need to follow I don't know 18 different protocols and you need to evaluate risks um within the blockchain within smart contracts the there is no way you can do this manually and there is no formal um process if something changes that someone is announcing it to you and says hey guys we're going to have this change in the smart contract make sure in three weeks time you're up up to speed it just happens overnight so maybe this could be something that is helping um regulate the custodians to be on top of their game for um monitoring blockchains okay anyone else want to jump in there on the topic of AI and how that could influence the market making and why it's important for the crypto recovery of course no game give a amazing answer I'm sorry a hundred percent agree nice one okay brilliant your jobs are safe for now um we're coming up to the last sort of five six minutes here um I wanted to ask a much softer question here we've talked about last year we've summed up in one word you know we had turbulence we had a car crash we had resilience we had Challenge and when we're looking forward to 2023 what is it you're most looking forward to and what is it that you're looking um what is the one sort of element of Market making that you hope um is part of 2023 because we're working towards this crypto Market recovery um John looking thoughtful as a liquidity provider in Tech provider I think for us it's crucial to see guys like yourselves Thrive because this is just going to bring a healthy environment for years ahead it is crucial that you monetize on the flow you get from firms like us and that the industry becomes more mature as time progresses as I said I come from traditional Finance I know some of us here as well and we've experienced something similar to what we're going through many years ago so I think the more credible you guys become in through a bit of regulation of course and this industry has a very bright future ahead it's just that it's wearing a bumpy road if you've been in capsule market for 23 years then you know your first few years in the industry were during the financial crisis I did the maths earlier I I experienced something incredible at the early stages of my career which was a bankruptcy of one of the major broker dealers in the world so that's how I started yeah got a little bumpy back then and I think it doesn't by far yeah certainly okay um what are you looking forward to David this year for market makers what do you hope they provide you as an exchange [Music] well I think that this year will be amazing to be honest for market makers because uh they will like get some uh let's say uh more regulated places like because after the last year as I said like regulations will be one of the important points here right and once we get more regulations once we get once we become more transparent I'm in the whole industry market makers will feel the more more comfortable here so this year will be very good as I hope so even so let's see what What will what will be I mean but I hope it will be amazing one big optimism there I feel like glad to hear it um Steph I think what we're seeing right now in D5 is extremely exciting um I think you know we we can't compare this this time to 2018 where there was close to no innovation um and the interactions that we're seeing on chain today are just incredible um and the applications that are being built right now and you're looking at you know credits but you're looking at secondary markets we're looking at you know marketplaces of a new asset class called nfts all of a sudden who is doing you know incredible amount of volume um I think the Innovation on that front is is you know the reason why why we're all here um and the role that a market maker can play on that front I think is is going to be important not only as a power user but also as a service provider and I think that and you're seeing the trend already right now especially with tracked wallets Etc we're gonna go and enter the era of Unchained reputation right and the way you interact on chain is gonna Define how you can interact on which which counterparties you can interact Etc and um market makers wallets down the line will be will be tracked will be monitored and will be held accountable through this D5 Innovation um so for us to and we've been doing that you know over the years experimenting on that from the best to be you know increasing our our efforts you know as a market maker in this industry and and to be active participant is is what we're most excited for this year and uh it's going to be it's going to be exciting yeah it really harks back to that theme of transparency which I think comes through throughout this talk we've had today um Patrick um even if it sounds boring but I think I'm actually looking forward to regulatory Clarity um the regulatory Clarity helps as well to then play regulatory Arbitrage which has always been there and will always be there I mean in trap fire we see it day in Day Out but it's at least then clear what are the rules and what are the boundaries it will help the market to be more liquid and and more people being comfortable going in and the second thing I'm really looking forward to it but maybe 2023 is too early um the bridging between real world assets into representation of tokens on a blockchain and then having the clarity and the enforceability to actually make use of this I like that it's an interesting interesting thought and finally Glenn um I will take it from a higher perspective than Market making I guess it's um it's very hard to not be not to be bullish about crypto right now when we look at the activity the price itself of course which is one of the components what is happening under layer twos it's crazy um and I think very likely in the next 12 to 24 months we will see emerge a significant other book based decentralized exchange that's one of my conviction uni swap it could be because this is this is the the only way to create efficient markets at least it's the best we found all the books from a market making standpoint it's we're also quite excited because we see this new wave of tokenization which is coming with all the Securities being tokenized and it's it's opening an insane amount of doors you know in 10 years we we've seen the emergence of 20 000 tokens more or less if we think about the tokenization of all the assets Securities but even other assets like real estate I mean yes there would be a huge Market which will be heavily fragmented everything will be traded from our houses our stocks our early early stage State startup so so no we are quite excited but we need to understand the responsibility that we all have because I was talking to an investors a few weeks ago and it striked me I told them you know the typical pitcher you know it's normal crypto is very early and it's normal and it will be no it's been it's been 12 years and we don't have so many bullets to do what's right and and I think that's why it's very important that we we understand this responsibility and that that's why we really need to to build what needs to be built from all perspective and we need to do it now we have a few years left yeah Echoes what you're saying earlier about the self-regulation um brilliant thank you so much guys for your time thank you very much for the European blockchain convention for hosting us I hope we've made it clear to you that crypto Market making is very important for the for the recovery that we're all hoping for can I have a round of course please oh David Steph Patrick John [Applause]