Jump Trading’s investment logic: infrastructure builders covering multiple tracks such as DEX, Stablecoin, and public chains

No permission and decentralization are the characteristics of the crypto world, which makes the crypto world like a deep dark forest: opportunities are abundant but risks are hidden everywhere. Those projects endorsed by well-known institutions have become a relatively simple rule for investors to choose projects.

In the crypto world, every move of some well-known investment institutions has attracted much attention. In 2020, Multicoin Capital has become a hot spot in the market. Investors comb through Multicoin’s portfolio to capture the next value depression. This summer, Coinbase investment projects have become a new hotspot again. Projects invested by Coinbase but not traded on Coinbase have become “rising” signals.

Speaking of the phenomenon-level rise in the market this year, Solana ecology is a topic that cannot be bypassed. Alameda Research, which has invested heavily in the SOL ecosystem, has obtained a good return. At the same time, Jump Trading, another important investment institution in the Solana ecosystem, is also very worthy of attention. Jump Trading has supported Solana ecological leader DEX Serum, revenue aggregator Tulip, oracle machine Pyth, cross-heterogeneous chain universal communication protocol Wormhole, etc. through investment or participation in development. Jump Trading also has a long-standing layout in Solana ecology.

It is not difficult to find that Jump Trading is another investment institution in Solana Ecosystem besides Alameda. And this is not the first time Jump Trading, a traditional high-frequency trading giant, has made a move in the encryption field. In mid-September, Jump Trading announced the launch of a new USD 350 million fund. This fund is the seventh fund launched by Jump Capital, which will be used for crypto-related capital investment, stock investment, and token investment in the fields of DeFi, financial applications, blockchain infrastructure, and Web 3.0.

The launch of Jump Capital also means that this veteran capital will finally enter the crypto world. Despite Jump Trading’s long-term attempts to maintain a low-key public image, the company still has a long-standing reputation in the market. We found Jump Trading’s positions on Nansen, and we look back at Jump’s investment projects from the current point of view. How do we understand the investment logic of this veteran capital? (Its holdings are complicated, and Rhythm only lists some of its holdings)


Among Jump Trading’s positions, most of them are more mature projects. Among the 10 projects selected in this article, only Sperax ranks outside the 1000 by market capitalization, and the rest are mostly in the top 200 by market capitalization. Observing its holdings may help us better understand its investment style and capture the hotspots of the next market.

Looking at the Jump Trading list, Rhythm BlockBeats found that among the 10 positions we listed, Jump Trading’s positions cover multiple fields such as DEX, DeFi, and Web 3.0. Jump Trading has focused on agreements that are expected to become ecological infrastructure. For example, the importance of multiple DEX needless to say, and projects such as oracles, savings agreements, synthetic assets, and stablecoin have enriched the ecology very well, and are necessary to build a highly active and liquid DeFi world. .

Perhaps we can understand it this way. Jump Trading started from trading and has developed so far. Their understanding of capital efficiency and trading is excellent. This is also their innate advantage to capture the next growth point in these fields. Such as the improvement of liquidity by Compound and the first stablecoin built by Sperax to hold currency and generate interest, these protocol innovations can improve the capital efficiency of the world on the chain. This kind of ecologically valuable innovation should also have more long-term value and be more attractive to investors as well.

The investment in Web 3.0 is even more open. Everyone can see the trend of Web 3.0, but no one knows which path will eventually be successfully reached. Jump Trading is betting heavily in areas that it is more familiar with-optimizing trading and capital efficiency-while remaining open to future trends. This is both a radical investment method and a conservative risk aversion strategy.


Jump Trading has been using its own funds to invest since its establishment in 1999. The world’s top traditional investment giant developed from CME and is one of the traders with the largest trading volume in traditional asset classes. The company has more than 1,000 employees in New York, Chicago, Amsterdam, London, Shanghai and Singapore and is active in futures, options, cryptocurrency and global stock markets. As a company born and grown from trading, Jump Trading’s emphasis on DEX is a natural fit.

In the encrypted world, transactions are the most data carried on the chain. The structure of the crypto market is full of nuances and different characteristics at each level of the stack. Complex trading systems tend to magnify these nuances, and scale will further magnify them. Kanav Kariya, the head of Jump Crypto, once pointed out in an article written by himself, “The main focus of our early work was to build a powerful platform that enables users to participate in these special markets in large numbers and gracefully. Combined with serious transaction intelligence, with encryption With the continuous development of the field, this market will enable us to be a leading market participant.” In its holdings, we found multiple DEX project tokens.


Jump Trading's investment logic: infrastructure builders covering multiple tracks such as DEX, Stablecoin, and public chains

As of today, Jump Trading holds approximately 3,000 SRMs, valued at approximately US$10,000.

In September 2020, Jump Trading invested in Solana’s chain leader DEX Serum. SBF once revealed in an interview with the media that “Serum is Jump Trading’s first venture into and investment in the DeFi field.” But it’s just the “first venture”, and Jump Trading’s investment has achieved remarkable results-SRM token is dubbed the “SBF Four” by the market. One of the “piece suits” has ushered in a good increase. CMC data shows that in September 2020, SRM Token was only US$1.84. In September of this year, SRM reached a maximum of US$12.48.

Unlike most DEXs that mostly use the “Automatic Market Maker (AMM)” mechanism, Serum uses the same order book mechanism as CEX. The advantage of this design is that it will not produce a large slippage like AMM. Limited by network performance and order processing speed, this mechanism was not common in the previous DeFi world. Serum takes advantage of Solana’s high TPS to design a central order book, which can integrate the flow of multiple other protocols on the chain.


Jump Trading's investment logic: infrastructure builders covering multiple tracks such as DEX, Stablecoin, and public chains

As of today, Jump Trading holds approximately 390,000 BITs worth approximately US$740,000.

In June of this year, Bybit, a well-known trading platform for derivatives trading, announced that BitDAO, which was launched by it, announced the completion of a $230 million financing. Bybit also promised to contribute 0.025% of its futures contract trading volume to BitDAO’s treasury. Based on the revenue from January to May this year, it is expected to exceed $1 billion per year. This is also regarded as the most direct value support of BitDAO.

BitDAO plans to take a different path from Bybit. By investing a lot of funds and talents in the DeFi field, BitDAO will move towards a decentralized road. BitDAO refers to itself as one of the largest decentralized autonomous organizations (DAO) in the world. BitDAO will focus on three things, research and development, liquidity and funding. Develop BitDAO DeFi products, provide liquidity for DEX, lending, synthetic asset and other agreements, and donate to support emerging projects. In addition, this is known as the largest DAO in the world. Prior to this, Bybit had never issued a token, and Bybit and BitDAO were jointly regarded as the value support of BIT token.

From the perspective of BitDAO’s vision alone, the planning of this project is not unambiguous. The “world’s largest DAO” leaves investors with a lot of imagination. And in Jump Trading’s wallet, we also saw BIT holdings.


Jump Trading's investment logic: infrastructure builders covering multiple tracks such as DEX, Stablecoin, and public chains

After the popularity of AMM and the explosion of DEX, DeFi trading has become a force that cannot be ignored in the market. But the rise of a large number of AMM projects has also brought new problems-the “fragmentation” of liquidity. Especially for large transactions, the cost of slippage is a transaction friction that cannot be ignored. Aggregation platforms like 1inch solve this fragmentation problem to a certain extent.

1inch can aggregate the liquidity of multiple protocols to provide traders with the best quotes. Specifically, 1inch will split the redemption request sent by the user into multiple parts, and then trade from multiple different DEXs to achieve the best result of the total transaction price.

Before EIP1559, due to the characteristics of the ETH network, the high gas fee has always been a big distress for DeFi users. (Of course, this problem is still solved after the implementation of EIP1559.) 1inch launched gas in May last year. Tokens also provide users with a better way to save gas expenses: gas token. Chi is a functional token developed by 1inch. It saves gas by storing gas into CHI when the price is low, and destroying CHI when the price is high to release the gas and use it, which achieves the result of saving gas for users. With the implementation of EIP1559, although the use of gas tokens has come to an end.

Although the CHI gas token has been deprecated, we cannot deny the innovation and value of this project, let alone the contribution that 1inch has made to the ecology. As of today, Jump Trading holds approximately 690,000 1INCH, valued at approximately US$1.72 million.

DeFi infrastructure

As DeFi has become the main category of applications on the chain, the infrastructure that supports the ecological operation of DeFi has become the focus of attention. There are many subtle and complex economic mechanisms behind some of the most exciting and successful projects in the DeFi field.

Oracles, storage protocols, synthetic assets, Stablecoin…Jump Trading’s investment record in this field is enough to prove that they are already comfortable with this track. This may be the more conservative part of Jump Trading’s portfolio. Jump Trading believes, “The rise of DeFi has paved the way for Jump to bring two decades of trading expertise and engineering technology into the crypto field, attracting them to explore the magic rabbit hole of Internet currency.”

In addition to the top 100 projects with market capitalization such as ChainLink, Compound, Synthetix, etc., Jump Trading’s holdings in this field also have many early projects with low valuations, which may become the “wealth passwords” for everyone to watch.


Jump Trading's investment logic: infrastructure builders covering multiple tracks such as DEX, Stablecoin, and public chains

Jump Trading’s wallet address currently holds about 20,000 Compound holdings, valued at approximately US$ 4.17 million.

In the 2020 “DeFi Summer”, Compound shines. The protocol uses “liquidity mining” to reward protocol contributors, which enables Compound to quickly start the protocol at an early stage. Lending, as the infrastructure in the DeFi field, has a relatively stable structure. Compound, Maker, and Aave are divided into three parts, and their corresponding tokens are also regarded as DeFi blue chips.

With the advent of the multi-chain era, many well-known protocols have been deployed across chains. Unlike other lending agreements, Compound’s multi-chain solution is unique, and Compound Chain has been developed by itself. Compound Chain is a distributed ledger that can transfer value and liquidity between peer-to-peer ledgers. Based on Compound Chain, users can borrow and lend cross-chain assets from different blockchains such as Polkadot, Quorum, Solana, and Celo. Compound Chain aims to supplement the Ethereum contract and plans to issue native tokens to pay transaction fees. COMP will still act as a governance token.

In May of this year, Jump Trading once purchased over 47,000 COMP and became the eighth largest holder of COMP, second only to a16z and Polychain among investors.


Jump Trading's investment logic: infrastructure builders covering multiple tracks such as DEX, Stablecoin, and public chains

In Jump Trading’s wallet address, we found as many as 200,000 SNX tokens worth approximately US$1.13 million.

Synthetix is ​​a decentralized synthetic asset issuance protocol built on Ethereum. This agreement allows users to mint, hold, and trade a variety of synthetic assets, including legal currency, commodities, stocks, and encrypted native BTC, MKR, LINK and other cryptos.

Synthetix also issued an over-collateralized Stablecoin sUSD. Users can mint sUSD with sufficient SNX mortgage. Synthetix’s innovative synthetic asset model has aroused market popularity as soon as it was launched. At present, SNX token has also become the leading token of synthetic assets. So far, the total circulating market value of SNX has exceeded 1.1 billion U.S. dollars.


Jump Trading's investment logic: infrastructure builders covering multiple tracks such as DEX, Stablecoin, and public chains

Jump Trading’s wallet address currently has 3.61 million SPA holdings (but according to another Jump Trading associated address discovered by Reddit netizens, there are more than 30 million SPA tokens).

Among the many DeFi projects described in this article, Sperax is the most unique. Sperax is committed to building a full-stack DeFi ecosystem based on the native hybrid Stablecoin Sperax USD (USDs) and using decentralized products such as Sperax Synthetic Asset and Derivatives as application scenarios. This may also be one of the reasons for Jump Trading’s investment.

The core design team of Sperax is composed of Nicolas Andreoulis, former founding member of Terra, and Prof. Marco Di Maggio from Harvard Business School (both of them are founding members of Terra. Before leaving Terra, they designed UST, Anchor, Mirror and other core products of Terra ecology. ). The market value of Sperax’s target Terra is currently US$17 billion, and the market value of Sperax is approximately US$20 million. Sperax has issued the first interest-bearing hybrid stable currency (USDs) in the current market. One of its features is that it can provide minter with passive interests income. This project is favored by many institutions such as Messari, Jump Trading, Alameda Research and Amber. Messari praised it as a new generation of Stablecoin project with “huge potential to change the Stablecoin track.”

Web 3.0

Web 2.0 and centralized giants have existed in this world for too long. By breaking the traditional business model centered on company interests, Web3 shows us the possibility of community-centered economies of scale. This spirit of cooperation and its related incentive mechanism can attract the most talented and ambitious developers in various technical fields today, and they will develop many unprecedented projects.

As the in-depth author Ki Chong Tran said in a previous article published in Decrypt, Web 3.0 is “the next major change in the Internet, and it may help people regain control from the centralized companies that dominate the Internet today.” . Jump Trading also has a layout in the Web3.0 field. From its holdings, we also naturally found the tokens of the current popular Web 3.0 projects.


Jump Trading's investment logic: infrastructure builders covering multiple tracks such as DEX, Stablecoin, and public chains

Under the tide of the Web 3.0 era, there are always some areas that will enter the Web 3.0 era earlier than others. Audius, a decentralized media music platform, is one of the pioneers of this era. Audius is committed to creating a decentralized and open source streaming music system controlled by artists, fans and developers. The company mainly helps music producers and artists to connect directly with fans and get paid through their own music works. There is no middleman on the platform.

The data shows that music artists can only get about 12% of the total income of their works, and for new artists or niche musicians, they cannot continue to create without sufficient support. Audius not only hopes that “intermediaries will no longer make the difference”, but the responsibilities of platform operators are clearly limited to music discovery/hosting and adjusting incentives based on creators and listeners, instead of playing a traditional distribution role like Spotify and Apple Music. Earlier, Audius Music was officially recommended by the Apple App Store.

As of today, Jump Trading holds approximately 570,000 AUDIOs, valued at approximately US$1.89 million.


Jump Trading's investment logic: infrastructure builders covering multiple tracks such as DEX, Stablecoin, and public chains

In the Web3.0 era, how to bind the wallet address to your social identity is also very important, especially when we use our NFT more in social interaction. Mask Network has already led the NFT and SocialFi tracks with a plug-in, and has laid out a variety of functions including sending and receiving red envelopes on Twitter, posting encrypted tweets, displaying and purchasing NFTs, etc. In addition, this plugin also integrates information platforms such as CoinGecko and CoinMarketCap, and accesses decentralized applications such as Uniswap, SushiSwap and QuickSwap.

And Mask Network is doing much more than that. In addition to launching on Twitter at the beginning of the year to identify and display the NFT functions of platforms such as OpenSea, Mask also recently launched NFT Gallery (NFT wall), NFT Avatar (NFT avatar), NFT red envelope functions, and also The NFT avatar function has been launched for some users, and it may even support the use of NFT to fight monsters later, and experience the cool elf function similar to QQ pets.

Through browser plug-ins, Mask Network allows people to experience Web3.0 and Metaverse earlier on the Web2.0 platform in a simpler way. As of today, Jump Trading holds approximately 29,000 MASKs, valued at approximately US$320,000.

Jump Trading: Infrastructure Builder

Although Jump Trading’s investment portfolio covers multiple tracks, these projects have common characteristics: they are more ecologically friendly, are expected to become infrastructure, are advanced in technology and have a big vision, and these investments have also made Jump Trading very profitable. By observing its investment portfolio, it is not difficult to find that Jump Trading prefers magnificent projects that are expected to become crypto infrastructure.

We can also see this investment strategy of Jump Trading in other projects: In September of this year, Jump Capital invested in Eden Network. Up to now, Eden’s computing power has accounted for more than 50% of Ethereum’s entire network’s computing power. Jump Capital participated in the construction of the Pyth network, and the Pyth forward chain outputs a variety of data including the stock prices of the compliant securities trading platform. As the initial code contributor of Wormhole, Jump Capital has been able to achieve a completely universal communication across heterogeneous chains…

On the official website of Jump Capital, there is a sentence in the most eye-catching position: “Jump Capital is moving towards building the next generation of cutting-edge encryption infrastructure.” Kanav Kariya, head of Jump Crypto once wrote, “to build has been Become the team’s rallying cry: build subsea tunnels and railways, build communities, gain a deeper understanding of the encryption ecology, and discover a treasure trove of system design and engineering issues.”

“Blockchain has opened up an incredible new resource coordination model, through trust between two parties who do not trust each other. They make the community truly a stakeholder.” And their goal is to “help lay the paving stones.” “Investing in infrastructure may be their way of “paving the way.”

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/jump-tradings-investment-logic-infrastructure-builders-covering-multiple-tracks-such-as-dex-stablecoin-and-public-chains/
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