The Chopping Block: How Wintermute Avoids ‘Zombie’ Exchanges, Base’s Early Success, Bank Fraud in the AI Era - Ep. 532
Aug 17, 2023
auto_awesome
Evgeny Gaevoy, CEO of Wintermute Trading, shares his expertise as a leading crypto market maker. He discusses strategies for navigating quiet crypto markets and highlights the dangers of 'zombie' exchanges. The conversation dives into Base’s rapid success and its implications for DeFi. They also explore how biometrics can secure crypto wallets and the looming threat of bank fraud in the AI era. Insights on the evolving landscape of trading firms and the parallels between friends.tech and BitClout add depth to this engaging discussion.
Wintermute focuses on building better algorithms and their DeFi stack in slow market periods.
Coinbase's Layer 2 solution, base, has gained significant engagement and traction.
App-specific mobile wallets offer a user-friendly experience and cater well to social and gaming applications.
Deep dives
Crypto trading volumes at Wintermute at lowest levels in years
According to Evgeny, a trader at Wintermute, the trading volumes in the crypto market, particularly at Wintermute, have hit their lowest levels in years. The slow market activity has resulted in boredom and short attention spans among participants, leading to the emergence of new activities such as trading meme coins like Harry Potter Sonic Obama Ten. During slow periods, the team at Wintermute focuses on building better algorithms, software, and hardware, with the most notable improvement being their DeFi stack.
Coinbase launches base L2, attracting protocols and achieving strong engagement
Coinbase has recently launched base, its Layer 2 (L2) solution, which has seen significant engagement from users and protocols. Many popular protocols such as Compound and Uniswap have been deployed on base, and the total value locked (TVL) has reached about $230 million. The app, friends.tech, built on base, has gained traction in the crypto Twitter community. Despite a decrease in engagement from its peak, base has shown promising numbers in terms of daily active users and transactions per second.
Potential of app-specific mobile wallets for specific use cases
The rise of app-specific mobile wallets, like friends.tech, is gaining attention as it offers a user-friendly experience for specific use cases. By using these wallets, users can seamlessly interact with a specific application or protocol without the need for extensive knowledge of blockchain or private key management. This approach may cater particularly well to social and gaming applications that require a simpler and more intuitive user experience. Such wallets can hide the complexity of blockchain technology in the background while providing a comfortable and accessible interface for non-crypto users.
The future of biometrics in crypto security
While biometrics present a convenient and user-friendly solution for authentication, there are concerns about their security. As biometric data is not secret and can be replicated, relying solely on biometrics for securing crypto assets may pose risks. However, innovative approaches are being explored, such as generating ephemeral public-private key pairs from biometrics. This approach removes the need for third-party custodians and could potentially offer a more secure and user-friendly alternative. The development of such solutions may lead to increased adoption and improved security in the crypto industry.
Prediction: The rise of fraud rates in the banking sector
While technological advancements have improved security measures, the rise of AI-powered fraudulent activities poses a challenge for banks. With the increasing sophistication of generative AI, the barrier to entry for fraud has significantly decreased. Banks may experience a considerable increase in fraud rates as attackers exploit vulnerabilities. However, banks are better equipped to address security concerns compared to other industries, and their focus on continuous improvement and expertise in security measures may help combat the rising fraud rates.
Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tarun Chitra, and Robert Leshner chop it up about the latest news. This week, Wintermute CEO Evgeny Gaevoy joins the show to discuss market making when the crypto markets are quiet. Plus, an analysis of Base’s prospects following a surge of early interest. Also: Do you think bank fraud is going to run rampant in the AI era?
