Quantitative Finance in Crypto, Stamo Georgiev, TopCoding | ETHSofia 2025

[Music] Hello test. Okay, looks like it works. Thanks for having me first of all and thanks for everyone uh attending. So yeah uh you can see the presentation. That's good.

Cool. So let's start first before we move any further discuss first with uh maybe a short clap. Do you know what quantitative finance is? Clap if you know. Okay, two folks.

Okay, that's that's a beginning. So I just know uh how beginner friendly to go ahead. So given that we have only about two three people who have heard of quantitative finance, I'm going to start with a quick intro first. Okay, we have more people gathering. a quick intro about first myself and then get into a little bit more of a what quantitative finance is.

So my background so you know I'm legit. If after this you still don't think I'm legit, I can switch to a stocastic differential equation lesson. So uh keep me posted on that one. So yeah, I'm I'm an exmath gold medalist. did compete in a lot in mathematics interned to citadel was part of main group as a quant and I've been running myself a crypto progress for about four years now we can get into a little bit more details about that later and as part of top coding in 2025 alone we've helped 32 plus people lend roles at hedge funds and trading more than 250 plus in total but we're talking about crypto and trading today some of those guys lended 610k so so far you can see that's about for the price of a green Lambo if you've noticed one around and yeah let's let's get straight into it.

So because a lot of people came up again with clapping. How many of you guys have heard of quantity finance before? Clap if you know what quantity finance is. Okay. Not not much more people.

Okay. So what is quantity finance? First on the left hand side you can see the back end office. On the right hand side you can see the front end office. So on the top left what you see all these really really quirky equations that nobody really understands apart from couple of Russian Chinese and Bulgarian guys are usually what hedge funds use for sales and not that much for trading.

And just below that you can see that could really be real code from trading. I'm just kidding. But yeah and then what you see on the bottom is one chart. What a chart is everyone probably knows about that. Uh stuff like S&P and stuff.

So here the question is how do we combine these three things into something quantitative into finance into crypto into making money and going into the right picture. Basically that's that I mean on the right picture is why most people start into quantity finance and what they see eventually is only the top left. But yeah, so content finance basically mixes up mathematics, machine learning, AI, like AI, you know, uh artificial intelligence, artificial really, and coding, finance, and a lot of hacks, if I can say. So why what I mean by hacks, we're going to delve into one specific type of hacks in a minute. But here, maybe many of you are thinking, can I do that at home?

Can I do it? Yes and no. Yes, you can do something. No, it's not going to make you a millionaire most likely. So, that being said, let's move to the next one where basically we're going to get into one of these things that actually makes lots of people millionaires, buys them lambos, etc.

, etc. And basically why most people got into uh besides those guys who never heard of quantitative finance and just got in from like some recruiters founding them through some their old friends in a Russian gymnasium. But yeah, basically was the idea of uh that basically broke the market many many years ago. So people decided okay that actually makes sense and let's try this to make more money is some very smart guy we don't know who literally created that but some smart guy some point said to themselves okay if Adam sells an apple for $5 a piece and Annie wants to buy an apple for 550 why don't I just buy it from Adam and sell it to Annie and make 50 cents profit right it's risk- free I can do it as much as Adam has apples to sell or Annie wants to buy whatever is lower I can go up to that point and the same with with arbitrage trading actually that that's what arbitrage trading makes and that was one of the very first ideas in quantitative finance in general and currently all these things run on a like trillion dollar scale in like regular finance stock market etc and one billion dollar scale in crypto and web3 and actually what makes it very very appalling for the smaller guys to get into arbitrage and other kinds of quantitative trading strategies in crypto is the fact that there are a lot less big people and like big fish sort of and why is that quick uh quickly let's take they manage about $60 billion they make about $30 billion a year profit and the entire like market cap of some of the crypto coins is like I don't know 300 million, 500 million, 1 billion, 2 billion market cap, you can't make like you can't like steal their market cap, right? And if you make I don't know 20% off of the market cap, which is also unrealistic off of like I don't know like 800 million, that's 160 million and that's like 08% of their yearly profit anyway.

So when you have like gen street I know those guys not getting into quantitative finance you then basically give the chance of regular people like some expporns who've been some of those companies you can actually in Bulgaria there are a couple of really good companies like that one as simp uh traders for me trading and yeah I started talking about Y crypto but yeah basically all these small companies people with a lot less money basically they can get into the crypto trading u by themselves with like pocket money. I mean pocket money here would be like couple hundred thousand but yeah on the large scale of things that's that's just pocket money. So there is like growing market there are like a lot of coins. I don't know how legit the statistics is from Coin Gecko, but even if it's not as accurate, even it's not like half a million new crypto tokens, if even if it's like 1% off of that, that's still a lot more than stock markets growth out there. So, there's like lots of opportunity.

There is low competition. We already explained that because all the big the big people are not in the big companies. And there are large price discrepancies what we just explained. So Adam, a lot of Adams want to buy at I don't know $10 per coin and a lot of an want to buy for 12 or 13 or 15 because they saw this is like bullish and whatever. And all these big pricees are actually very very sweet as profit margins.

And why do they exist so much? First because there are like a lot of lots of lots of lots of basically exchanges and all of them are unregulated. a lot of them or if there are any regulations there is it's far from being as regulated as the stock market. So basically anyone can jump in there is no like high trading volume etc. So what you end up with is actually lots of price discrepancies which is very appetizing.

Of course the downside is there is not like high volume enough. So if you want to make like 20 million a day you're probably not going to be able to. But like for the people in this room probably 20 million a year or their lifetime would be perfectly fine. So that's what we're in general targeting. So that's perfectly fine.

And over this arch disc process even with bad code and without a lot of I mean when I say bad code don't think of like charged code or something. We're talking about code maybe one of the best codes written in Bulgaria. That's what bad coding in trading is usually. But yeah, still with not like I mean for example the time to blink your eye is like 300 millconds and the differences in speeds on the real stock markets are usually two microsconds and that's like two millionth of a second. That's that's fast.

So yeah, you don't need to be as quick. You can literally have a delay of like I don't know 50 milliseconds and still be fast enough. And the nice thing is you don't need to be the fastest. you just need to be faster than one person. So even if the fastest is too fast, you can only need to run out by one person.

So yeah, that that's that's why it creates a lots of opportunity in crypto. That's why quantity finance is vastly integrated into crypto. And that's actually what makes it possible for us also to buy because when you go to the market and you say, "Okay, I want to buy one bitcoin." Whom do you buy from? You don't buy from me or you or someone else.

You buy from a company. Usually that's a market maker. And there are a couple of mark makers also in Bulgaria like one of them I believe Ravena I think there might be here as well I think they do that also uh what else I forgot uh there there are a bunch of companies doing that so there are some nice companies also there are a lot of undisclosed ones where people just do it from basically their home like my arbitrage cryptos which no one really has heard of but doesn't really matter and I don't care and you don't have to anyone can do that at home I don't say it's going to work. It's not financial advice and there are no way. So here maybe you're thinking okay how to become a quant and do the same.

First there are three types of quants there are the quantitative researcher developers and traders. So first of all what's the difference at all researchers those are basically um I don't want to like yeah those are a PhD guys okay so those are PhD in mathematics machine learning and stuff guys I was a researcher for a while and it's exhaustive it's usually doing like 13 14 hours a day of research and finding new stuff so those are AI PhD guys mathematics PhD ML PhD etc computer science PhD sometimes s depending on what kind of area you're focused. So probably not of one of those. You don't need to like find new stuff out there. Uh there are the developers which is pretty cool row.

I was the longest time into a quant def row which is basically the part where you get the research that's already done. you connect to the right places and you basically do the entire algorithms and run them to to glory as I like to say and the quantitative trader that's a very pecular role it's somewhat diminishing recent years because this is those are the people who manage the algorithms that already trade on the market so when you have let's say three arbitrage algorithms one of them trades Ethereum and Bitcoin one of them trades Solana and Bitcoin one of them trades BNB and Bitcoin for example So the trader is the one who decides let's say how to reallocate the capital around the tree whether to turn down some of the offers or increase. They're like the entire Greek alphabets included in quantity finance for some reason but yeah Greeks betas etc. So the trader is the one who decides all these things. Why are they diminishing?

Because a lot of these things now become quantitative as well. And in the past it used to be very hard because you have like large context but now all these can be shifted into algorithms and produce the the most optimal outcome. There are still some rows of course because you don't want a portfolio of like 5 billion being only attended by machines. You want to be someone to be able to literally like switch it off from the electricity and stop trading if something goes off. This is actually by the way this is a fun fact.

Uh a lot of the hedge funds use literally turn off switch from the like the electricity to turn off their computers and the reason is it's reliable. That's that's the answer. You know when you switch it off it's reliable. It's stopped. You can't keep trading if it's switched off.

So literally like Jere is a $40 billion trading company. They literally trade 40 billion of their own money. They literally like switch it off at the end of the day. So they're certainly not in trades. But yeah, uh sometimes you want to be certain and not be like fancy because like there's a trade-offs.

Uh I don't think some of those hedge fund managers want to wake up and see, oh, our fence thing lost 500 million. I prefer to be old school and safe. So, uh that's that's about the three different things. My story, yeah, I was a quant researcher. Mentioned that for a while.

Then I realized okay that's uh fun but the de the the dev roles have a lot more different things and aspects that they can touch base to did a little bit of trading especially in the citadel uh company but yeah we went through point two as well and the proven formula that top coding that over the past five years has produced hundreds of qu it's first if you don't have a good enough background which means you didn't do some bachelors in mathematics CS etc and you didn't really focused on those stuff you really need to get started from the ground up. If you spend I know if you're like 25 or 30 now and you never studied CS or maths etc probably it's going to be close to impossible for you to get into the research or or trading or quev literally buy out the base defs out there and they literally pay the highest salaries out there. I mean if if OpenAI started paying like 900K a couple of months ago at hedge funs you can make 2 million for the past like 30 years or so now you can make a lot more for example top if you stayed more than 3 years you're certainly 1 million plus package so they just they just buy the top talent and literally for example even at main group when we started hiring a couple of years ago in Bulgaria the first people that we hired were actually we hired three people out of 2,000 rums So, it's competitive and yeah, the formula is don't try to jump off the cliff if you don't have long legs. Basically, that's that's one of the formula. And then if you've gone through all these stuff, then you can potentially have the chance to get there.

But guys, still pretty tough. And okay, one second. Uh wrong. And yeah, so but still uh that shouldn't like disappoint someone or make them believe they can't do that etc. But the first step is always information.

If you don't have like information what's that what that looks like, you're probably never going to make it. So just start by exploring. Be open and interested. There are a ton of videos nowadays on YouTube. You can go watch all these looks how people like code trading algorithms.

It's not that they're going to work, but it's something. It's also always a start. If you want to be like Olympic runner, you don't start by running on the Olympia, right? You start running in front of your block. So, it's still something.

And yeah, that's that's certainly uh viable for anyone to get into to feel about it. And if you want to like really really get into this kind of like career and stuff, basically try to find couple of trampoline companies, maybe getting into a bank first or an analyst position or data science. And with time, if you progress fast enough and you go through the right places and you try to jump over and over to a better and better company, eventually you might be able to actually make it into a nice one. And yeah, you can always experiment at home and stuff. So, uh, it's Q&A and the end time with the left like one minute and yeah, did you guys enjoy that?

Okay, cool. Thanks so much. And now on the stage, some other guys from the same city where I was born in are going to welcome us. So, thanks so much again and see you later. [Applause] Heat up [Music] here.