Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Wintermute: 'Avoid These Trading Mistakes!' Secrets of a Market Maker - Yoann Turpin

Episode Date: March 30, 2024

Market makers help create more efficient markets and liquid order books, by positioning themselves on the receiving end of a trade that other market participants are unwilling to fill. Quantitative analysis is crucial in determining their position and size. Wintermute defines itself as a tech-first company that also became one of the largest spot market making firms in Web3. From angel investing in Web2, to market making in Web3, Yoann Turpin (co-founder of Wintermute) has a vast experience in both tech products & financial markets. He shares what differentiates good traders and how he approaches investing, trading and market making.Topics covered in this episode:Yoann’s background and his interest in tradingThe ever-changing trading landscapeWintermute’s genesisTrading vs. Investing vs. Market MakingWhat defines a good traderOn-chain trading vs. CEX tradingHow Wintermute succeededWintermute culturersync blockbuilderLongterm predictionsAI impactMisc. Learning new languagesEpisode links:Yoann Turpin on TwitterWintermute on TwitterSponsors:Gnosis: Gnosis builds decentralized infrastructure for the Ethereum ecosystem, since 2015. This year marks the launch of Gnosis Pay— the world's first Decentralized Payment Network. Get started today at - gnosis.ioChorus One: Chorus One is one of the largest node operators worldwide, supporting more than 100,000 delegators, across 45 networks. The recently launched OPUS allows staking up to 8,000 ETH in a single transaction. Enjoy the highest yields and institutional grade security at - chorus.oneThis episode is hosted by Brian Fabian Crain.

If you're competitive, markets are quite a good arena to play in, but you have to be at least in the top three to make money. $25,000 into $125 million, essentially. You can segment things in different ways, but I think what we call trade in winter media is mostly market making. Private side is easier and harder. Private side is essentially access and filter. can you get access to the right deals? And when you have access to the right deals, can you say this is a good deal

I want to invest in or not? You needed to have at least 14 investments to see your money back. And usually the first seven or eight so just go down to zero. You have three or four or five that basically return your money or give you a bit more.

Then you tend to have one investment every less than 10 that actually just has, you know, yields 80% of your return. This episode is brought to you by Gnosis. Nosis builds decentralized infrastructure for the Ethereum ecosystem. With a rich history dating back to 2015

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or deploy your product on the EVM-compatible and highly decentralized NOSIS chain. Get started today at nosis.io. Kars 1 is one of the biggest node operators globally and help you stake your tokens on 45 plus networks like Ethereum, Cosmos, Celestia and DYDX. More than 100,000 delegates stake with KORS1, including institutions like BitGo and Ledger. Staking with Kors 1 not only gets you the highest years, but also the most robust security practices and infrastructure that are usually exclusive for institutions. You can stake directly to Quaros 1 public node from your wallet, set up a white table node or use the recently launched product, Opus,

to stake up to 8,000 eth in a single transaction. You can even offer high-year staking to your own customers using their API. Your assets always remain in your custody, so you can have complete peace of mind. Startsaking today at coros.1. Welcome to App Center, the show which talks about technology projects and people driving decentralization and the blockchain revolution. I'm Brian Crane and today I'm speaking with Yo Turpin, who is the co-founder of Wintermute.

Wintermute is one of the largest, or maybe the largest, market-making company in crypto. And yeah, I think it's a field. I'm super excited to dive in here. So thanks so much for coming on, Yon. Thanks, Brian. Thanks for inviting us. we're the largest spot market making farm.

We're not the largest across derivatives yet. Not yet. Working on it. So a spot is true. Defy most likely as well. Getting there. We can't claim the full name yet. How did I cross the crypto space in general?

We need to do a bit more on derivatives. But we're working on this. Thanks for the invite. Thanks so much for coming on. we hung out a bit in Singapore recently and it was really great to talk and so I'm super excited to like dive into

Vintraud but maybe to start off like share a little bit like how did you become interested in trading and markets well okay trading in markets so be a well-be and well-be-full crypto

so I am to be like full disclaimer so I'm 41 and I started to get interested in trading when I was 12 and I was essentially reading newspapers so my dad would be a subscriber to something called the Figuero in France and they had essentially

they had a main newspaper for just typical news politics and the likes and they had like they had like also what we call the Salmon papers which are essentially like similar to the FTA sort of the market papers and I was just going through this and I just took a passion to read through that

one of these kids who had kind of 120 options of like what they wanted to do when they grew up so I wanted to be you know like whatever doctor ex-man and physician a astrophysicist between essentially the age of 7 and 12 and then from 12 we really wanted to be a trader so I got into this discussion with my dad had a like a stock portfolio that he would manage we didn't have we didn't have the internet per se we had the minitel so minitel was quite quite popular in front of the at the time. You just log in into the 6637. It was similar to a web page, but you just type in a number. And essentially we just log in into what was the credit union at the time and we could just buy stocks as such. So I started, I started like this, putting some, putting some orders in to

buy stocks with my, with my dad's money when I was 12. It wasn't, it wasn't a ton of money, but it was just enough to be able to a person for it. And then I got him to buy me like a an options book when I was 15 to my first options and then basically I couldn't trade options so basically I found a way to trade warrants you essentially you could only buy stuff I was right

directionally but I realized that the banks on the other side essentially warrants are a bit different from options in the way that it's issued by banks or like a warrant tissue and essentially they were taking so much margin that I was right in my bets

but I was giving too much margin away and it's probably one of the first things that led me to think of more like market making percent. So I kind of hired one of my like a little cousin who's I think he's five years younger than me over a summer and I was going through like to find arbitrage across the page and so on. So anyway, I started started quite earlier in pocket in general. I think the theme has always been that I would go through different subjects and I would get a bit bored of it. Half of my family is entrepreneurs, half of my family are educators. And then one thing I really didn't want to do at the time is just not be a teacher

as such because I thought it was just a bit too repetitive, you know, going through the same lessons and teaching the same things every year. And one aspect in Marcus that I love it is is just changes all the time. You know, these economic cycles, it's every three, four years or so. You can see that in crypto where you get like a, you know, winter people call it more like seasons and such. And it just changes enough and it's noisy enough that it forces you to relearn things and so on. So I found that, oh, if I want to have some sort of career for 10, 20 plus years, it needs to be linked with markets. So in a way that it needs to just be refreshing enough. Yeah, that's the long short of it. And then I ended up training my first futures when I was 18,

got someone to write off, sign off a professional investor letter for me to trade a futures in Busra when I was 18 as an internship. Basically, I qualified that as an Newton chick with the school and then I wanted to like a bank as a first sort of gap year and then wanted to do trading as a first job at 23. So when you got interested in trading this early, you mentioned one of the things you liked was this fluctuating, the change. Do you think that was the thing that kind of caught your attention and got you so deep in there or were there like other aspects that ended up being so fascinating for you

about training in markets? There's a competitive level. That's interesting. There's a few things. I did some sales trading before doing trading professionally, and I found that sales trading was not always aligned with the customers, and I didn't really like it. And I found that trading was much more aligned with,

it's pretty clear where the P&L comes from. Like, it's just, I found that it was just a very honest way of making money. So I quite like that. aspect, you get very clear feedback, very tangible feedback if you're doing things right, basically you make money, if you do things wrong, you lose money. It is much more like honest per se. I think it gave me a sense of independence as well to the degree that you can trade some things, you know, or on your own as such. But I think it was more, there's also quite a lot of things that we do today, a little big day back. We can only do because we have the

infrastructure because they have the team in the background. There's quite another things that have to be quite collaborative between getting everything aligned between the right access to capital, right access to exchanges, right to inventory per se, right strategies and so on. So I think there's also a collaborative aspect that's interesting

that. I think if you're competitive, markets are quite a good arena to play in because it's global. pretty much from day one. So if you think about us, the one we started in the crypto space, it was essentially all both from day one. So you know if it's going to work pretty quickly, then it's, you know, just drawing some sort of parallel with the zero to one, like when it works, you know, you want to be in the top three, definitely. Ideally, you're the first one in a certain vertical as such. So you want to be the first one in, you know, spot trading as such.

But you have to be at least in the top three to make money. But no, you're the first one. You we interact on Twitter here and there and so on and it's more about I think people get somehow satisfied to be doing a bit better but I think the realization especially in trading is that you need to be doing better than the competition all the time and it's a bit more about

there's marginal advantages that you need to add on to that make it quite competitive so it's just yeah keeps you on your toes I want to go into this, but maybe before that, then what's the story of how intermute started? There's a convergence of two things. There's a convergence of

Yevgeny set up the company 25th of July 2017, and he was doing like a little hackathons here and there with our first CTO, RO. And then on my side, I essentially had already built a few companies a few trading related companies, but also some startup studio, a bit more of the VC advisory firm as well. And on my side,

I was going back into trading in 2016-17, and I was sitting next to this ex-Marshalways. I don't know if you know if Marshall Waste, but it's probably the largest long-short hedge fund in London that, you know, so Philip Marshall, I think it's a Philip, made a few billions of, of it. But essentially they managed something like $86, $90 billion of AUM, and they do a lot of, you know, long

short, more than equity space. And one of their first employees was sitting up, was sitting not too far from me on a trading desk, and he was sitting up his own macro fund, and he was all over crypto 2017. So we reviewed a lot of ICOs together, about 56, I think. And he wanted to have a macro hedge fund that would have actually a crypto sleeve, what they call it. Essentially, they have a macro-edgemen that have different strategies and you have a sleeve of it so part of the allocation is in crypto and he wanted me to manage that allocation so it came to mind that well i can't do this so long i need a uh you know i can trade but i need someone else to help with you know just just automate like everything's more of a ctio and i need another trader because it's 24-7 and then essentially

to start i reconnected just discussing very openly with some ex-colleges from from trading suggesting me to reconnect with Yudgeny and then we we aligned on this and I joined in as a co-founder essentially late 2017 we put everything on paper with that with our city actually on early 2018 so that's the that's the general thing that he he had just left a trading farm and he wanted to do something in crypto and I had basically the allocation we didn't we did not end up taking money from from that fund actually but I was enough to just just Rekindle the interest for me to get into crypto. And philosophically, for me, it's more like I had done both trading in VC before,

and I found that crypto was super interesting in terms of democratizing, like, liquid, this is one we call like liquid venture essentially. So very early stage bets, but that you could get access from just with trading very, very early which I couldn't find in the private markets anymore like within profit and public markets in what to add some background to that Brian. Web 2 like I had done first non-listed investments to 2008 and I was a pretty active angel investor, so in London and so on between 2012 and 1516, let's call it. And what you, I think you still have this in Web 2 where in the past like 90s or so you'd be able to

you'd be a city investor at Amazon Amazon just lists like three years later sometime around 99 you can still buy Amazon and $1 you can actually get a lot of the growth and you can get a lot of the upside but after 2010 especially while you get into the Uber listing you get into the Facebook listing and stuff and there's not there's not necessarily a ton of upside left So everything just lists like 10, 15 years into the life of the company.

And it's much more what we call in crypto except liquidity, but it's like the typical web to shareholders of listing companies to end up becoming exited liquidity for VCs or private equity groups, essentially. So I found it really refreshing that crypto was trying to solve that problem essentially. And another aspect that I love in crypto is it's more like, I've dealt with people in the trading space and the hatchman space from the airspace and so. And people can be a big cagey in those spheres. And I found that actually people in crypto are always quite open.

And maybe you made some scammers here and that. But actually in general, people are quite that have pretty goodwill. And I know quite a lot more interesting to interact with. So I'd love to get a bit into sort of trading. And like, I think a lot of people, they will have, and I, you know, they will know, a lot of listeners will know sort of trading in the sense of, you know, okay, I have some U.S. dollars, some euro or something. I want to buy some Bitcoin. I go on like an exchange and I put in, you know, maybe a market order or maybe a limit order. And I buy, I buy some tokens, right?

Like, or like maybe I do it on the exchange. I buy some shares. But I think that's probably the extent to which most people, you know, listening here will understand trading. And obviously that's something very different from having the things you did previously at, you know, before crypto, you know, this training company or then advent mute. So can you tell a bit like what's trading? When you say, you know, you're trading, like, what does that mean and what does that look like?

You can segment things in different ways, but I think what we call the trade at winter weird is mostly market making. So essentially, like, we're there in the order book. So we're there in a marketplace, within exchange. And we're there to always be, so that if someone wants to buy or sell, there's someone on the other side, someone like us, Mark and Mickey, there's someone on the other side there to fill our order. Because let's say, if you, Brian, if we both individual.

and somehow like you want to sell Bitcoin a 70k and I want to buy it at 60K and nothing happens. You know, and then the market makers are there to make sure that, you know, like we always show what's called a bid and an offer. So a price of which we can buy and a price of which we can sell. And then we all we're trying to be there to always to make it to make trading easier and the cheapest possible.

So what we call trading tends to be, you know, associated with market making. now most people to your point most people call trading you're like trying to buy with at one dollar and hope that it goes to two dollars you know and that's that's often yeah not the greatest strategy I think the way that most people

should be trading in crypto is to see it as venture and essentially like to put X amount of money either they don't do any research and just saying like BTC and and sort of the top sort of four or five names as such. We start to see more what's called, you know, more basket products and more index products as such that that would give you exposure to the top 10, 20, 30 names, which is for most people,

it's probably a better way to do things. As have you trying to, I mean, I don't know, how do you trade this start that way? I know you've done some venture investments, but do you, do you try? anything any liquid tokens I'm very like buy and hold and don't do much else and you know do any do you have any leverage when you take a position no no look at sounds like you leverage it's pretty good I don't have the impression that I'm good at

predicting you know basically market movements so I don't I don't try to do that Yeah, so I mean, it's quite reassuring. I have made money historically with some cycles like in stocks or so, like taking directions, but through previous verbs, not through, not through, not through, not necessarily through interview. As VC's as the venture arm is doing quite well, but it's very much like venture investment. So again, to separate like, I think what you refer to as trading is much more liquid investments. But on the private side, private side is, it's, private side is, private side is, private side is easier and harder.

Private side is essentially access and filter. Can you get access to the right deals? And when you have access to the right deals, can you say this is a good deal I want to invest in or not? And that's venture for you. The problem usually of venture or in crypto and some of those spaces is just that you're married to the position. The good thing with it is that you don't tend to have any leverage. So if it goes down to zero, it goes down to zero.

but you get psychologically to much more used to things going down to zero. Now you'll understand why I mentioned this for trading is I think most people should consider even when it's liquid crypto, they should consider it like a venture bet. They should consider that they're actually making an investment that actually should be pretty much risen down to zero. And they also should look at the stats of actually venture investments. So venture investments for like, I don't have the stats for crypto. But like for Web 2, Angel, like even 10, 15 years ago,

you could already get all the stats where you needed to have at least 14 investments to see your money back. And usually the first 7 or 8, so just go down to zero. You have three or four or five that basically returned your money or give you a bit more. Then you tend to have one investment every less than 10 that actually just yields 80% of your result. And that causes some challenges when you think,

of how people trade which means that the winners should essentially return 10 plus times the winning and i think it's very very hard psychologically for most people to think of like keeping something that does 10x and not not sell it before it reaches 10x another parallel with this is that um do you know what valuation the uber investors invested seed it's 2008 so 2008 do you know what valuation they invested? I don't know, no. $3 million.

So essentially when Uber listed, people had a $5,000.000. So whatever, J-Kall and his friends and so on, made like $25,000 into $125,000 into $125,000, essentially. A bit more. But that's basically the math. So imagine if Uber had been liquid before that,

I'm pretty sure they would have holes, you know, sold some of it. And it's a bit of the challenge of like thinking of investing in crypto. Is, you end up a liquor venture and then you need to find a way to trade maybe, you know, but like if you sell your five, if you have a hundred X but then it turns into a 5,000 X, it's quite a big miss. So it brings us of the challenges to like comparing sort of venture and like treating trying to find the best way to trade is. is actually pretty hard. So with the market making that you guys do at Intermute, how do you make money? We basically are forced into a position we don't want.

We call it position and basically being long or short. So long as you make money if things go up, short to make money if things go down. And we're forced into a position by providing, you know, liquidity, by just basically saying if you want to buy a Bitcoin for me, yeah. Because let's say there's a particular coin and then you have, when you have buy orders and you have sell orders. And so that means you have to hold both sides.

What costs us money in the first place is infrastructure, people to, you know, run algos to send the orders and so on, cost of capital to, cost of capital to borrow, usually borrow the currents on each side. And then even if sometimes we get slightly cheaper borrowers, but there's still commitments, there's still some things that are associated with it. And the borrowers are often from the team or foundation or whoever is issuing the token.

That's much less than half of what we have in the balance sheet. But yeah, some of the boroughs are from foundations. Some of the boroughs are used to be from the lending going platforms, you know, like Blockfire and the rest. And most of them actually wouldn't pass. So we have some boroughs in Defy. that you'll know through like wildcap, the maple of the world and so on.

But essentially, yeah, a lot of boroughs come from, you know, some of our shareholders or so, just direct from family offices and so. So we borrow directly from foundations and other people. So we have a certain cost of capital. And then we make money by essentially being in the order book and China capture as much as possible of the spread. So we essentially get paid over time to take risk

because we pushed as a saying idea we pushed into a position because you want to buy we don't necessarily want to sell but necessarily sell that price and then we hope

that we can hedge it as in we can buy back whatever we sold to you we hope we can buy it back a slightly dollar price but let's say I want to buy a token and then

you guys have to sell order so now you're buying that token at that sell order and then Do you hope that maybe you can sell it at a different exchange at a better price than or buy it, buy it at a better price than you sold it to me or do you hope that the price moves? Marketmaking is actually, let's summarize it, it's quite simple. It's quite simple to explain, but quite difficult to implement.

The market making is just what do I think this and the likes of this, the Bitcoin is worth that time cheap? how wide do I want to quote and what sort of size do I want to quote it? So you just have width, quote size, and then your mid-price or what I think the theoretical value of the token is. And then we quote around this. And as yes, there's small amounts of money that come from arbitraging. So basically be able to sell, you know, near enough at the same time, sell on one exchange, the same asset and just buy another exchange at a lower price.

But yeah, often it's just very much trying to price things as well as possible. So it turns out to be like it's much more about it's quite a competitive space in the way that why to be able to trade both sides we need to be really within the spread. So we need to be, you know, the best offer on one side and the best bid on the other side. And it's very infrastructure difference. It means that we need to be able to adjust the orders safely. So we don't get taken out by other people. So there's some infrastructure cost in that.

And obviously, there's capital constraints. There's this cost of capital that, you know, because we borrow all these assets. Yeah, long story short is that we make money by taking a risk by, you know, we don't necessarily want to be short. This is a Bitcoin when you want to buy Bitcoin. And now if you have different companies that compete, different market makers that compete, a different market maker that compete.

I mean, you mentioned, you know, you need to be the top or top three and stuff to make money, but what differentiates, you know, the top from the other players? So, that's an interesting discussion

that I had even in TrotFi when I was at my first venture in trading in 2011 and I exited in 2014 and I was looking at trying some of the TrotFive firms and just trying to learn from other people. Basically, my first venture was the one senior trader there and I thought I didn't

really learn enough. And I think a lot of it is actually much more about a cultural differentiation. I think if you can attract them, I tell it, because people are very honest and it can actually just bail. I think there's an aspect of people being aligned and being there and being traders for the right reasons. Often people don't actually stay at traders just for money. It can be quite rewarding financially, but it's actually often people just get, if you are just interested in money, they just get the first bonus and they sort of leave and they do something else that's a lot less trustful. So either people can like math, they like whatever problem solving, they like, there's other aspects that make it interesting. The math comes in like because when you, it's basically

around determining this, oh, the midpoint, the width and things like that, that's when you use some kind of data analysis. Yeah. You try to predict as well as possible. It's never an exact science, which is why infrastructure comes into play quite heavily, where it becomes a more exact science because you end up trading very high frequency.

I think some people know the term of JFTE is sort of high frequency trading as a fact. And you end up trading, it ended up making money every day, at least at the start, and ideally every day, hour because you trade very, very high frequency here. They're trading, I think we trade four, five, six million times a day these days.

So it becomes very granular. So it just, it also becomes very infrastructure dependent. So it means you need to, you need to have essentially 50 plus people to go in a cover, just make sure that everything is running smoothly. And especially in a crypto space between sort of between C-5D-Far, between the OTC side of the business, between an API offering, you end up crossing quite a few things. Getting into this a little bit, like, what if you compare market making in a traditional market versus crypto, what are the biggest things that you need to be good at, you know, specifically to do well in the

crypto markets? So I can tell you what I think is a good differentiation for the business is that we build very good brand and reputation by being honest people and not looking for like the short term optimal but really which will for a long time so i think that was that was quite key so maybe you can explain why that matters because you think if oh if you just have the orders in the exchange and you know it just takes the best order i don't even know who's on the other side so on that side it sort of shouldn't matter right so as soon as you try to see you face counterparties we call counterparties They're not really customers as such.

They're just because we try to what we call as principles, we try to own capital. So essentially, you want to be reliable. Like when you show a price, basically, you're all there for a certain price, for a certain size, for X amount of time. So reliability is, like being more predictable, is worth something. So market making can be done.

I think people in crypto space are used to hear the term towards foundations, but it's also towards, exchanges. So if you're reliable towards exchanges do that when things move around but so on, then the exchange is, the exchange is just the room essentially. And then you need, the exchange needs people like us to be in the room to tread with some of the many of their users. And if you're reliable as a market maker on an exchange and you're there when things move and so on, essentially their users will have better execution, will have a better experience in general. And that's quite, that's quite valuable.

to an exchange. And then you just build a good relationship with us. It's more akin to a partnership with an exchange than anything else. And then do the exchanges also pay directly for the liquidity you provide? Very nice in ones do, but usually they don't. You want to be in a situation where they're big enough, they're big enough so the opportunities they show are just, yeah, they're there to take risk with our money

and take risk, you know, providing liquidity as such. But then the exchange should be there to, what, to bring new users onboard and do the onboarding into the crypto space, essentially. One thing I didn't mention that's really, really key to how we build the business is that and especially the difference between crypto and the crypto and the trade-fire space is that there's a whole defy a limit that we actually focused on early on, especially from 2000. And we found it was quite a good differentiation to the business, but also it's something that we could only do because we were much longer term focus. So essentially we took VC money and we very much pitched ourselves and we still see ourselves as a tech company first before being a trading company.

So we essentially took venture money, which is just quite different from having investors from a hedge fund space or trading space, which is quite different from having investors from a hedge fund space or trading space, which is that we didn't have actually people on a. now back asking every day what the results were and we had more people, much more patient to spieling, letting us build infrastructure first. So 2019, we started on DIYDX, for example, in around August 2019. And that enabled the rest of the business to actually be more robust around essentially on chain transfers to the point that we're probably driving Nansen users quite crazy at some point thinking that they were following small members. but they're just seeing transfers going back. So if you have tens of thousands of transfers,

I don't know what sort of signal they can get from it, but probably not knowledge from us. So I think there's a big differentiation of being able to trade on-chain is quite a differentiation from the Trout fight. What's the biggest difference about trading on-chain versus on-central exchanges? There's aspects around obviously just direct integration with the chain, but there's aspects of while managing your own custody,

thinking of potential sandwich attacks as such, thinking of the risk of actually not really being failed as well if the cost of just pushing for a transaction and not always knowing exactly when the block is going to be confirmed. There's quite different level of uncertainty in terms of what you traded and what you didn't trade between defy and essentially C-fine like the traditional finance. So these things are quite different. On the other side, once you've made the effort to integrate

and to build a certain amount of defined knowledge, then there's, you know, if it's a barrier to entry for you, it's a barrier to entry for the people as well. So yeah, it becomes a competitive advantage. There's some aspects that we realized later as we were starting to invest. So we started to invest in different projects from relate 2020, essentially from the summer 2020. I think Airways was probably DYDX with a, I don't know if it was a series A or series B at the time already. But essentially, because of the operational experience and training experience and dealing with these DFI protocols,

we had a good amount of insights on just doing technical due diligence for investing. So we ended up just, we ended up building like different relationships with VC firms, for example, which is basically coming to us and like not only from a potential trading perspective to help, you know, build some of the volumes for them, but also in terms of just getting feedback on due diligence or just how robust was a certain protocol, for example. Well, what do you feel like were the key things that allowed to intermute to get, you know, it becomes so big? I mean, it's a very competitive space, right? A full alignment of planet. Full alignment of.

So full alignment of planet where you want to get into position. There's a bit of an execution plate in terms of, because we had a really good team to start with in terms of the experience we had in sunset. I had experience raising money. Evgeny built essentially, it's the first company you've been ever built, but he had,

he built the EETF arm of a large market maker, or trying to try to market maker in Europe. So he had good experience in ETFs. And I had good experience in not only option trading, but also just raising funding and such. And our first tier was quite good in terms of getting the first skeleton of infrastructure. So we had some de-risking there. One factor that was interesting is because we ended up closing the first round of funding with quite a lot of difficulty in the middle of 2018 crypto winter.

We ended up in a space that was actually quite empty. and then we ended up dealing with 30 you know OG groups in crypto life blockchain of climate and so on who are quite happy to have us around and you know in winters basically the pond is very small

so you only have like a few fish that survives there and then it's actually quite a good is this pretty healthy interaction just the if you're resilient enough of you just quite quite happy I think you guys you guys started during the same time

you were about six and a half seven years old as well not yeah yeah of course when we started that basically start of 2018. I think it's excellent for that, like in terms of the base, because you're just very focused on billing. You're not really distracted with just like,

like we are nowadays. It's very distracting. But it's fine. I'm just more than happy to see like new eyes and so on. It's just, the prices do the marketing for us, essentially. But in general,

it's kind of easier to start. I think having this pretty good history even in Web 2 and Web 1 and so on. in terms of people building successful companies starting in cross this years. So that was helpful. I think it was really helpful that two things. It was really helpful that you had a really clear idea of being tech fast and being like very much product driven and being everything being automated.

And we never really had trader roles. We've always had dev slash guan slash trader roles. so anyone basically just codes and everything gets into play very very very very very soon very quickly you mean so this this basically means that like it was always the focus on like you know building a system building algorithms as opposed to because i mean i guess it's always algorithm with market making no i mean i guess the people not doing this manually no but you'd be surprised there's a lot of transfire firms who who have very separate roles between people who

there's quant roles people who build the algers they're actually traders who do like little more manual trading actually so you'd be surprised that we still have even in crypto we start of competitors who are actually trading a lot more manually than

you would think so I think there was a strong tech focus there and the tech the motto is things being reliable and scalable essentially on my side I had good experience with raising equity and raising debt so we had the capital that access to capital sorted and we were all very aligned in the vision of having

like in terms of the culture having essentially it was more startup like when we started than now we had to find them we had to compensate people with a hybrid of like bonus and shares over time because they were just getting pushed a bit too much by essentially hedge funds and anyone who wanted to enter the space. Because the shares were too much of a long-term thing. Yeah, so it's still a balancing act, but I think we've got something quite nice nowadays where I think you'll end up with something like a program where people have a few shares but they get some bonus once a year or so

and then they can reinvest that bonus as they choose and we start to need to have basically some secondary round here. Like reinvest a bonus in buying shares or in like lending into the company or something. Yeah, yeah, essentially so. And we very much want to, we have some VC shareholding as such

but we really want to be as employee owned as possible. And it makes a ton of sense for companies that trade their own capital, essentially. Because you want best alignment possible between people who trade and people who own the capital. These things we got right, some of the things were difficult to fully align on Adler style because some of the things are much longer term in terms of building the brand, building the BD side of the business versus building, building the day-to-day algal and trading side of the business. But I think we clicked around late 19, early 2020, when we had the first COVID hits and

marching the first big dips in the first big dips in the Bitcoin at the time. Well, actually, we saw all the algal is actually quite robust. And we started to study, study to make real money. But essentially, we started to, we were building. the rocket for two years. We only started to really put show in the rocket two and a half years in or so. So that took some time.

Was that because the algorithms weren't good enough? Some of it was because of this. Some of it was because we didn't, we had not, we are not rich enough of a critical mass between what we could show exchanges that what we could become. Because essentially, you know, exchanges,

you need to build a certain volume to actually get into better and better fish schedules. That was a challenge. And then it's simply like we had not built enough in terms of getting, yeah, getting cheap enough access to debt as well. So we're using, you know, equity fundraising to, you know, higher and, you know, build a tech. But actually for trading itself, we needed to borrow.

And getting slowly getting access to adventure was a, it becomes a bit, binary, basically. Nowadays, we're one of the two to three firms to get essentially first steps on access to inventory because we're quite reliable and because we try to do things quite important. When you say access to inventory, what do you mean? Your ability to borrow tokens from other teams or other people in general. So inventory says we trade what we call market neutral, so we don't make money if things go up and down. But it means we need to, we can't we can't buy inventory all the time. We can't buy the tokens themselves.

Because if we buy the tokens, they're sensitive to things going down, but often we can quote a lot larger size by simply borrowing the tokens and trade around it. Yeah. Yeah, I mean, I guess you can see also here the sort of advantages of size, you know, because like, yeah, you trade more

and then because you're trading so much, I guess the exchange trading fees matter a lot. and then makes it hard for someone to compete. Yeah, 2019, we still had the down year because 80 plus percent of the money we were making trading was going into fees. Wow. But it was just, and something like a roller thumb

that kind of works for me, like for poor sums, I don't know exactly why we are nowadays, but it was more like, if a third of the money, if you make like $1 on a trade and you spend 30 cents in fees, you can kind of run a business. Because you start have financing costs because you start having to pay your people. You still have some, you know, if you start having money, you have to start to pay finances and taxes and stuff. So like one third is maybe like moderately, it's where you can start scaling. But yeah, 2019 was essentially 80% of the money going to exchange.

issues. In terms of the interviews company culture, I mean, you mentioned some things, while you mentioned this thing of like, you know, trying to be a sort of startup mentality, having like sense of ownership and also this like long-term focus. Do you feel like there are other things about the interviews culture or maybe the way you've hired people that have been crucial? There's a bit of, um, so for further background, I mentioned, uh, maybe I didn't make you But, Evgenia and I used to work for a company called Optiba in Amsterdam, so they're quite a large firm still,

very much an option firm in Trudeville. And it's very much, the Dutch culture is 100% imprinted in that company and how, you know, brutally honest Dutch people are. And essentially, it's part of the culture. There's also a big differentiation where we took the best from it

in the way that it's a community. simply the company-wide bonus pool. And we took the same thing, which is what I noticed that in a lot of training firms are structured very differently. A lot of training firms have like little silo teams and no one shares information. But actually when you're in a firm and trading firm that actually has a company-wide bonus pool, people do behave a lot more like shareholders as such or at least think that if they share knowledge with, you know, the senior people are sharing knowledge with junior people, it just, there's deserve. a lot more of that dynamic when people are happy to teach other people.

And that's basically some percentage of the profits go into this bonus pool, and then how do you determine who gets how much of that bonus pool? There's still something that we're working on the two to perfect. But there's this philosophy that even people, like with us, there's even people are like illegal, so like all, can't take like everyone is a P&L contributor to a degree. we have internal recruiters and so on and external recruiters but we also assume that everyone helps recruiting

so I think there's a few functions like this work obviously that we want people to feel that owners as much as possible and I think that that has worked well I think I'm in a general advice for how many people do you have nowadays in the course one?

Coralore like 60-ish, 65, something like that. And when did you, I'm assuming at the start you were always involved with hiring, when did you stop being involved with hiring? Oh, I still am. I'm still interviewing. Yeah, I'm still interviewing. Yeah, I'm still interviewing, basically everybody. My rule of thumb is like the first 20 people or so.

It's really, really key to get right, because then you imprint the culture of the company risk on the first maybe five, 10, 20 people. And then they actually do. Then there's actually people you hired who help you scale in that way, and they scale like your training. Yeah, I know. I'm still, for me, I see, like, interviewing is, like, just really crucial.

And I think I'm pretty good at it. So I focus quite a lot on it. And at the same time, I feel we haven't figured out. Well. Or like I Like one of the things I still Really want to do and I don't think we're there Is sort of to figure out how to

Formalize or systematize like The injuries I do so that I feel like okay I can have like other people do it I mean there was just there's a few people Last year I was out for like a few months Or like a month and a half because that's like health issue So then there was a few people we hired that I didn't interview But I've interviewed it

Except for like three or four people I've interviewed everybody. That's interesting. I get less and less involved with it. I don't know. I mean, I need to check with the beginning. I'm pretty sure he goes and get involved with everyone. But I think we're very structured. Maybe we've got too many rounds of interviews and stuff, maybe now.

How many rounds do you guys have? Like for a beauty person, it's about five. They go through like a use case and so on. For technical interviews for like some of the options. some of the infrastructure guys, I'm not too sure. But I think, I mean, beyond that, I think cultural fit is still really a key path of it. I think, yeah, if they fit in the culture. And it's kind of the challenge of the question now that we're expanding across Asia.

Is this maintaining that culture? You may say, see that they fit in the culture, like how do you, how do you, what questions you ask or how do you assess that cultural fit? Well, yeah, so it depends on the role. often for like traders who move from joint fight to crypto, we know we'll have some ex-colleges, we'll know people who know them, we can get a lot of third-party validation.

I think there's a, there's a red line around like, really like honesty. That's quite key. Long-term focus. Yeah, people being entrepreneurial, being quite self-reliant, to be honest, like quite, I like to see self-rebeled. Like you just don't really need to just push

much. We have a lot of people in the company that I can just go and think at 3, 4 a.m. Like, I need to tell him good to bet. So my head of training is like this. There's a few people like this. I think there's a strain of workaholism, but I like to think it's well-placed enough, but then you need to force people to be on holidays. Quite a few people in the beauty team in Singapore like this. Yeah, I think there's this, this, this, this, there's a few elements like this and, like, sort of the work ethics. It's very cute. and thinking long-term enough and being much more mission-driven than mercenaries and so on. The challenge is, I think, hiring, like, the interview process is often not sufficient.

So I think it's just like, you know, the first one, two, three, first month is often key to make sure that we didn't make a mistake. But we don't. I think we've done a good enough job, to be honest, like, surprisingly enough in the hiring, because we don't. like we don't have many people even leaving that much or we did hire fairly slowly think about it like founded in you know july 2017 we had the first hire in september we officially october and then finished the year with like basically five people total finished 2020 or barely 10 or 12 finished 2021.

We did all of 2021 with between 20 and 25 people. And now they really started to hire more because we turned much more into a product company from 2022. And I think we finished with 50 people, 2022 or so, so slowly really, really slowly hiring. But thanks to that, we never had any rounds of layoffs or so. Yeah. Yeah, it's very similar with us.

One of the things that I've noticed of course one in terms of hiring that I feel like it's been one of the most reliable predictors is whether people are really passionate about crypto and it happened a bunch of times that we hired people who were you know they seemed like a good fit in other regards are like you know we really needed someone for the position but they didn't really seem to care much about crypto and then none of these have worked out they all ended up leaving basically yeah we had this with uh it was more 2022 as such like i think people some people are a bit too optimistic i think maybe they had some

fumble from 21 and then it's sort of like start and then it just come in and then the winter starts or something like this and um we have people who sometimes tempted by tried fire as well and it's true that 22 maybe only 23 was actually quite busy in effects and commodities and it's like that's fine like there's a few people leaving but it's far from being new role, like usually people stay and, you know, understand, understand the cycles and whatever, this pros and goes to any side of the cycle, to be honest. It's a bit of a filter as well. And I'm with you that people only to have some passion or bind to the vision of the space,

at least in terms of either democratization or be a bit like, slightly libertarians, whatever, like, you know, they need to buy to the vision of the space at least. They don't have to be as like crypto believers as, you know, if you're, Guinea and I, while we're quite strongly but I went into the crypto thinking that basically crowdfunding at a bitch failed. I was really into crowdfunding this in 2012. In terms of democratizing, investing and so on,

I felt I was quite interesting. And it's so many roles around being a sophisticated investor and so like, especially in the US. Like if you try it crowd funding in the US, it's a bit of a, it's not really crowdfunding. You need $5 million on your bank account

outside of your house to qualify to be able to, to invest in thoughts. I mean, different dollars and different rules. I want to qualify. I was just thinking about what I said before. I want to qualify it a little bit.

I think it's passionate or at least make curious about it. I think we've also had people who worked out who were like, I'm kind of skeptical about crypto, but I'm also very interested in it. And like, I'm trying to understand it. And like, that, that I think is also. So something indifference is probably more

than a thing of like, that is like, okay, if people have, feel like, It's just a sense of indifference about it and then they didn't work. Yeah, that's a bit worrying that it's probably massive red, like the bears. We've had people who, depending on the roles, we've had good success with people who actually came from Trot Fly, who are used to like too much structure to a degree. Like they work at banks or so and they were frustrated of like not being able to do enough. And we've had good success with them because they, you know,

Some of them had traded crypto like PA or so. And I know this is a balance because we actually, we want people to understand regulation. We understand people that I understand like a good long-term framework. So sometimes people who just purely crypto-native are not a good fit. They don't understand how, you know, markets should work, and so on and how it works long-term. But you need a balance.

And it's good if people have gone through, you know, both both have some experience with crypto, some experience with drought fire. I think it just ends up yielding the best profiles. We have pretty good experience hiring straight from university as well, but for more technical roles you see, it's, it's, yeah, it's for it depends on the roles. So you mentioned building, right? And I guess one of the things that, you know, that you guys have been building that has, you has become pretty significant is R-Sync, which is, is it the, I guess, the largest block building

theorem or certainly one of the largest? It's one of three large, I think this is a very-largest, certainly, yeah. I think it is 25% of block building. I don't know the latest numbers, but I think you should know that better than me. Yeah, well, I know it's one of the largest. I know exactly right now. But so why did you guys decide to do that? And what's sort of the connection between the block builder and the market making?

I think it's a good representation of the fact that we tech fast, that we very much build us fast. An analogy that I like to use and you probably have me say this if you does, but I'm not necessarily a fan of Google, but like Google is a good example that if you think of Google it's a tech firm it's a tech firm fast and they happen to make money from advertising essentially and then we want to be and we are tech fast and we happen to make money from trading but essentially what we do day to day is is tech building so there's only a now there's about 10 people like like more like me who's just more like externally facing and do the more commercial aspects of the business but most other people are basically product buildings, infrastructure building, and so on.

So our thing comes into place as a subsidiary as such to help with block building. And it's just making sure that we part of the block confirmations as such. We are quite cautious of not being too vertically integrated. So I think the good example of that is on DODXV4. For example, we made sure that we actually lend a lot of their tokens as well. So we help other people to confirm transactions, for example. And we want to keep things, you know, we want to keep things being a fair game. So, yeah, while having some control on block building not to be completely squeezed out of trade.

So it's part of the, yeah, being very much part of the defy ecosystem in general. You need to have some infrastructure built to be able to participate in trading. And so block building basically means, right, that it's an entity, right, that basically gets transactions either from the mempool or that people directly send to this block builder and then, you know, basically put it together in a block and then, you know, sends that to, you know, relayers and validators and the one that sort of has the highest monetary value that implied that it's the one that goes in there. and sort of the attractiveness here is for example that you can sort of construct your own blocks and put in all of the arbitrage all of the transactions, the on-chain transactions that you guys want to do

and I guess you can also prevent being sandwiched in that block is that sort of domain? Because you guys would still, would you still submit transactions to other block builders or like all of the interview transactions that you guys do. That's a good question.

You need to ask one of my Defar guys to get the full answer. But I'm assuming we do because we're still like if another block builder is performing better, the trading team can still independently just push this to a better block builder.

Like many in the space, we used flashbots in the past and others. I'm sure it works a bit like an auction, but it needs to stay competitive enough to a degree there's enough competition in-house to make things more efficient. Because if we don't keep things efficient enough, even if it's between different teams basically in-house, then some of the competition will take it away.

You know what I mean? If we only favor our own blocks, then it doesn't, at some point it becomes inefficient. It's a good question. And I'm assuming we'll use of the blocks, but it's true that in terms of defending ourselves with against Sanders, you want to have some control

there as well. So I'm curious also a bit about your thoughts and sort of the long term evolution, both with crypto

and of like what it means for a company like Windermute and maybe like some of the topics I'm curious your opinion

about. You know, one is you know, do you think that in the future you know sort of like

most assets will be blockchain based and that's how markets work, do you think that decentralized exchanges are going to overtake centralized exchanges and those will be the largest exchanges in marketplace in the future? Or like, where do you see things going? Yeah. So it's funny because I've had different answers to those questions over the yes. It's one thing is I'm one of these guys who's cautious where like, you know, people like

Larry Fink, for example, they're saying everything will be tokenized. I think a lot of things. will be tokenized but I think for some aspects like around our WA for example so what assets are like sort of like tokenized equity and stuff it's been tried before and in some of it if it doesn't bring a sufficient like factor of improvement it's this quite difficult to distribute and just to get to get adoption um so I think I think it will happen but it won't happen all at the same time there's a few things in the crypto space that I'm so really I have to see you like, so I'm in Asia now for six months because we trade derivatives from Singapore, from Singapore office. And I think there's a big thing that's still not happening.

If you compare to crypto space with Trad Phi, there's still very, very little volumes in options, for example. So essentially, options in Tradfai trade about, it's 25% of the total volumes. And in crypto, it's like a tiny percentage. It's just a very low single digits. And I think there's a few factors to explain that. But I think it's just like, like with a bit more. That actually positively is digitalization of the space. There will be more people around the table and actually will get more derivatives.

More derivatives mean a better price discovery down to the line token, so down to the base spot token as well. That's the second trend, so that more derivative is, more tokenization for sure. I think it was 25th of April 2022. I gave a talk in Davos about D5, Freeping, C5. Now, it's quite happy to describe token.

You have such a memory with dates. Whenever you were like mentioning date, you were like exactly, okay, it was incorporated on the 5th of July 2007. There used to be a smallest the quest like

there's very few things I'm good at. So just remembering people and remembering dates. Yeah. It's funny because I was at this I don't know, I don't know, I'm going to name the foundation because they invited me to speak there, but one inch of like a,

little booth and so on. I had like pretty, pretty nice discussion there. And we were just right next to WEF and they were all, you know, WV guys that are basically all talk about all 90% of the money is D5% of the money is all rubbish. We all know it's rubbish. But I was happy

to talk about like potentially what we needed for DFI to flip Zipar. And it was interesting because there was like, so April 22 as I mentioned, obviously we had FTCS in November. And then my first reaction when FDX went down was like, oh, people will realize that the Fed is because of centralization and that people would just go for default and so. And the problem is that I was talking about this with a partner at the time was that it's like actually CFI is very good for adoption.

CFI, CFI, basically, centralizing changes regardless of, you know, risk of fraud and centralization and salt. It's very much data to onboard. They actually onboard the new users. and when people get sufficiently familiar with the tech and so on and get sufficiently incentivized to basically do custody themselves and essentially confident enough and like the tech to actually send funds on chain then they really are part of defy. But at the time it was about so,

Trento was about 400 million total users across the crypto space and you had about 6 million, 4.5, whatever, let's call it. I think, sorry, it was 300 million total users in the crypto space, and there was about 4.5 million defy users per se. And now it's doubled across the board, but I see the percentage of defy users are the same. And it's a bit of like, there's a bit of a failure in terms of, like, defy in the way that we did have, like, good traction around defy summer

because there was like zero yield everywhere or negative yields, most of the places and basically DFI was able to to attract some users through through you know having some yield but essentially there was a whole phase afterwards where well Tradfy actually get it up and it of getting yield again and I think the defy space and essentially crypto was just a bit struggling on the on the on the on the yield front so not not super attractive there I think there's still a lot of things to solve in terms of UXUI getting that leverage and DFI that's some sort of you know credit scoring in the meantime and so. A lot of people are building pretty cool things to help solve these

things, but I think we still end up with this sort of bottleneck from the, for Defy to really flip C-Fi is actually still quite challenging because if you see how people are aboard into the cryptospace, don't ever see Fy first and then. But if you think like, you know, 20 years or 10, like a long-term future. So I think DeFi can be more much more prevalent once you get, like, Once you get robots everywhere, once you get like proper internet of things, because then whenever your fridge buying your food automatically based on what you've eaten the day before and stuff,

your fridge is not scared of like sending funds online. Well, your fridge is not scared of doing the custody or stuff. Like probably does this, maybe you just have your house wallet or whatever you want to phrase it. Yeah, you can have your fridge, fridge sandwiched the heating system. It's like disproportionate like hacking risk as well

but but I think it's like the machine to machine trade and it's also like this in 20 years time I think you're I think it's pretty normal but

I think I think that's that's probably pushes D5 first and it's surprisingly if you talk to institutions a lot of them and like there's a few even three years ago

had this side chat this sort of chat house like chat after Pannell at a London conference. And they were like traditional finance.

You have like these guys who call like religious custodians who hold all the people's money. And so like this top 10 out there that is one of them. But like I'm rooting BN. White. There's a few Australians there as well. And there's a few of these custodians who are completely ready to think of a world where defy is fast.

But basically they want to be the wallet. So they're basically that thing is like, okay, people can trade by actually everywhere. but they want to be, they want to secure the funds, the same say. So there's a future there. I don't know how much we have to pay them, but it's, you know,

I think, I think that can work. The reality is just, it's not, it's not happening yet. It's not happening yet. And maybe one more topic when it comes to sort of, you know, the future. What about AI? Like, what do you think is the impact of AI on, like,

Vintamute? Very little in terms of, pricing and selling every month to listen to what we do is already video to meet it. I think there's a really annoying aspect that I'm trying to get my head around

is on the commercial side. Is around risk of fraud or people impersonating and so on? It's more and more possible the tech is there for you to think that you could have had the podcast with me but you could have had the podcast with

someone else sitting in from the 50 cent army and actually just not using Jim and I. Not using using some AI tool to basically replicate how I move, how I speak and so on. And thinking you have a commercial call and then convince you to send me money for like, you know, for a deal and so on. Yeah, I think we're not too far away from having to go back to like physical locations and like having different offices in different countries and then just having people to just check in that, you know, that we have. this but actually blockchain solves some of this because you think of that you know uh you know

for us to have you know either it's linked with an address that's like we resentiled and not we we have a few points of validation that we can check and we can we can function trustlessly um but it's yeah that's that's that's a bit that's a bit of a concern and because there's aspects of our life in AI or so in tech in general where we we favor convenience of the privacy or with many other things, you know, of security. And I think it's a bit of the risk there as well. So I don't know how do you see AI affecting your business as well. I mean, for us, it's a pretty significant focus.

I mean, we have a team that's, like, focused on basically building sort of like. Well, I think the obvious thing is that I think it could just improve everyone's productivity by like maybe, you know, maybe 20%, maybe 50%, maybe 100%, maybe 100%, maybe 100%. maybe 100% but by a lot. But then I think to do that, you know, it's not like easy. I don't think you would get that just from like using like chat TPT or something, but you actually have to like integrate it into how the entire organization works. So that is like a focus for us. I think that is the sort of thing where it can become like something that's, you know,

very compounding where, okay, maybe maybe this year will help us like 5%, right? But maybe next year it will be 20%. then maybe the year afterwards it will be like 50%. And then I think these effects can just become like massive over time. AI is like, for me, AI is like, so I used to invest in businesses and more in web too. And you can sort of put them in like optimization, automation or discovery. And then if you get, so by the sound of it,

what you think is more optimization this stage is still like a 10, 20%, you know, a marginal improvement on your site. But I think if you just get generally inside, like if you get the discovery aspect about, that's actually quite useful. What do you mean with discovery? Yeah, discovery is like, think of an AI that I can think,

you know, AlphaGo is probably an example of this, like an AI is being completely differently. Or I don't know if you apply AI to like biology and just finding, like, discovering, like, new treatments or so. I think that will probably emerge, right? But I think the first thing is, like, kind of, like, I mean, for example, one thing is, like, in terms of a sort of thing we would like to have.

So right now, you know, we run all this infrastructure for, you know, lots of different blockchains. And then, you know, we have all these engineers on call. And then, you know, systems to, like, alert. And then something happens. And there's someone else to look at it. it and then like respond to it. So like for example, can you build a system that like knows how all of the issues that are

in all the ways they've been resolved and if there is an alert, it can like basically, well, autonomously resolve it. Or maybe at least suggest to the engineer that comes up, hey, this is alert. Probably you should do this, right? And then maybe they can check, but maybe at some point it's not necessary to check. You can just go ahead and do it. So something like that is for example, something we want, yeah, we want to build. But it's not easy.

It's going to take, probably going to take two years or something. What is it? I think it's 83 was neural networks. 2006 was the busmen, how do you call it, busmen machines and stuff? And then, like, it took over really long time. I think a lot of progress has been made in an eye just by, like, doing, just playing around with an optimization curve. I think people were quite surprised with this

how far we went and I don't know I haven't looked at this I played around with chat to PT and so on recently but it's like those other names are quite interesting because essentially anything that deals with words used to be considered very very difficult

like you could before you could build some trees you could build some things that actually just do like chat bots you could build them like in a very narrow in a narrow sort of a lexicon so a narrow set of like very narrow context and now the fact that we can have LLMs is quite quite interesting so I don't know I think it's often the thing you're like we sort of over overestimate where we can get in two years and we are massively underestimated the changes in 10

years time so we'll see here we'll see where we're all there I'm just curious about the last maybe last thing so I understand like you know like a lot of languages and you learn a lot of languages. I'm curious, like, how do you learn languages and how do you maintain the languages that you learn? I learned them fast and I maintain them very difficult. It's very difficult things to maintain them. So I'm still maintaining about five. And when I don't work 24-7, I used to just have, just watch movies or read or trying to read in the language or try to I love Singapore for like Asia languages because you can maintain Chinese, I can maintain some Japanese, I can learn Korean slowly with the limited time I have. There's two to three big dimensions.

There's something in learning that you call schemas. It's sort of like the scaffoldings of like how you learn. So essentially, let's say if you're French, let's say you have similar schemas to like Spanish and Italian and so on. So basically like same sort of framework. I know it's quite easy for you to learn other Latin languages. But once you just like you're European and you learn Asia language, like it takes a while to get there. If you've got good memory for new wires, it's useful.

But there's still a dimension where even you understanding like rough grammar is not sufficient to really just, you know, like to put words and speak perfectly. I think a good way to do things is just consider yourself a child and basically don't be fussed about making mistakes. Like I just half joke about torturing people, not learning a new language, but basically torturing people are going to listen to you, like basically you're going to make mistakes and so on. And I think people are, especially when you learn a new language as an adult,

people are too fast about making mistakes. And I think it's a good lesson for learning in general. Like it applies to languages where it's a visual. When you learn a language, you focus on one at a time, or do you sometimes learn multiple at the same time? Just one of the time, usually. One of the time is much easier. The thing is to get to a level

where you should be able to have a list of conversation or at least watch or read, like this is kind of material or so like simple things. Because you want to be able to maintain it. And you can only maintain it if you can have a mix of active and passive learning. So active learning is really, you literally like learning new words

and so on, learning new sentences and practicing And passive is basically just You watch a K drama show Or so there are You know It's much more passive But at least what's quite key Is get your ears

To hear all the sounds And I found this So I found it difficult for like Korean For example Life for Chinese It's really difficult To get around all the tones I mean just the tones

And they just just Just generally get around it Many people use soft tones In Chinese as well So it's more like You just need to end up having to learn, you know, to say like the same thing, three different ways, and I just make sure you can be understood.

Then just by practicing and be a bit shameless about practicing and just, I think this is, this is the biggest barriers for adults, actually. But in general, it's just, I find this fascinating in terms of language learning because it's usually like 50% of the language is about, gives you good insights on the people's culture. Because this is about, you know, who speaks to who and how they articulate things. things that's on, it's quite, just a mash the top. That's just like, youty exercise, but it was my past tongue for a long time.

I don't know, what's, what's your favorite language or what's that it took to ask very tricky questions? Well, I mean, I, in college, I studied quite a way of Chinese, and then I spent some time in China, too, and I spoke pretty well at the time. So this was a long time ago, this was like 2006. So I was kind of, you know, I could have like a two-hour dinner or someone and talk in Chinese and I could like, you know. And then I did not use it at all for, and I really enjoyed learning Chinese. It just found it fun, like more fun than learning other languages.

And then I basically didn't practice at all and I forgot kind of everything until like when I was in, actually when I was in Singapore, like in January, I started studying again a little bit. And so I've been studying, you know, every day for about, you know, seven, six, seven weeks. And, you know, it's coming back kind of to some extent. Yeah, so I think Chinese is the one I enjoyed learning the most in terms of studying the language. What I found difficult for you for Chinese and Japanese was that if you just really in it and you practice every day, you can get to a really, really good level, just reading and writing as well. but I find that the spoken and so understanding people speaking

and that in a general spoken level is not too difficult to maintain because you can watch shows and stuff and start but I found that maintaining reading and writing in a proper level it gets very difficult with all the Hansa or the kanji to maintain that's something that needs to be a lot more

more active on my side but yeah reading I never managed to get to like I never could get to the level where I could like read a newspaper or something and like understand I can send you some some books can there's a book there's a book by someone called richardson who basically he actually started with a Japanese book the the legend is that he was in the 70s in Japan and basically he learned like all the 1914 whatever official kanji list in Neson 3 month

and he used like a memory palace kind of method so he would just deconstruct the root of the kanji and basically just build around it

and build a little story around it and it's just called remembering kanji and actually there's a Hanza there's a Chinese equivalent

that's been same writer I think it's also Richardson I used this in 2009 and 10 I saw it's all the

positives and the downsize of memory palace and when you build the story around remembering something. It's kind of slow, but you actually remember it. So it's kind of slow to recall, like, signing the whole story around, oh, there's a lad, oh, there's a little, there's something, there's a moon, there's a sun, there's something.

And then you can rebuild the kanji or the Hadza. But it's kind of so, so it's useful in like a first kind of practice. And then you kind of forget about the story and you just, like, it goes into the long-term memory. And once you read it, you just read the right. science as it is. But if you have a bit of a barrier to remember them, it's quite useful. I'll send you the reference. Cool. Well, thanks so much, you. It's really fun that you on. We enjoyed our conversation. Thank you. Same here. Same bit.

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