Unchained - A Perp Venue Asked Her to Trade Her Own Benchmark. She Said No

Episode Date: June 30, 2026

Carmen Li thought it was a joke when a perpetual futures marketplace asked her to become the market maker for her own index. It wasn't. In this segment from Bits + Bips: The Interview, she walks Steven Ehrlich through the requests that alarmed her, a daughter analogy for why trading your own benchmark destroys neutrality, the manipulation risks she sees in crypto's index practices, and why she insists any perp venue on her index be regulated and guardrailed. Host: Steven Ehrlich - Host of Bits + Bips and Head of Research at Sharplink Guest: Carmen Li - CEO of Silicon Data and Compute Exchange This clip is from a longer conversation on GPUs, compute markets, and crypto. Full episode here: https://www.youtube.com/live/rYDiPneJv20?si=fjS7bSd-bJ6c6tYb  We go live every Monday - subscribe to catch it live. Sponsors Cape: Your biggest crypto vulnerability isn't your wallet, it's your phone number. Cape is America's privacy-first mobile carrier that rotates your SIM identity daily and blocks SIM swaps before they happen. Get 33% off your first six months at https://cape.co/unchained (use code: UNCHAINED). Chapters 🤝 00:00 The perp venues circling her index, and the request that immediately felt off 🚩 01:27 The ask she thought had to be a joke: become the market maker of your own index 👧 02:47 Carmen's daughter analogy that nails why trading your own index breaks neutrality 🛡️ 04:47 The guardrails that keep it honest: external audits and hard internal trading rules 🔀 05:36 Why you can't just swap one index for another and keep on trading ⚖️ 06:26 Her one demand for any perp venue building on her index: regulated and ring fenced Learn more about your ad choices. Visit megaphone.fm/adchoices

And I want to go a little bit deeper because I know, and you've talked about how you've been courted by many of the, without naming names, many of the major like dexes and perp issuers or perp marketplaces to sort of license your index to them similar to what the S&P 500 did, et cetera. And I'm sure that it's interesting, potentially appealing to you. But you did mention how you were also asked a few, they made a few requests of you that you found very unusual and, dare I say, concerning. So I'd love for you to just kind of walk us through a couple of those experiences. Yes. So again, I'm extremely near to the perverse market.

So it was great to receive that kind of enthusiasm from perpetuity marketplaces. So almost everybody, almost everybody, right? reached out, I'll have conversations. So my question to them is always, hey, love to explore. Tell me what should I do? What kind of product that will be interesting enough for your audiences, right? What kind of relationship you're looking for? A few things I at least all to me from traditional, again, market parties of the point

of view from capital markets is one of the things is so bizarre is you ask me, hey, Carmen, And aside from licensing indices, will you consider become market maker of your own indices? And I thought they were joking, right? Because clearly there's a huge conflict of interest by me treating my own indices that completely rolled the neutrality from an index provider point of view, right? By them asking, I thought they were completely joking and they realized they were not joking. And then I was like, you do realize a big conflict of interest. Are you doing that with any other indices?

they were like, yeah, we do the other indices as well. And I said, did anyone said no? Because by design, it's not supposed to do so. Right. So it's fascinating to me. That was even a discussion to begin with. Right. That is not something I will feel comfortable as a trader, right?

To trade a product, I know the index provider also can trade their own products. Yeah. Yeah. And maybe just to explain. a little bit more. Again, we have a sophisticated audience here and they're quote-unquote like bilingual in terms of crypto and tradfi. But maybe just give like one or two examples for people who perhaps may not understand the significance of you market making on your own index. What are the risks? I'll explain this. It's almost when I tell my daughter, hey, you know, you can go play if,

if I decided that my work can be done by 4 p.m., right? And then I'm the only person who decided if I can work by 4 p.m. or 5 p.m. Then her ability to play or not completely rely on my preferences, right? So, for example, if I have an open interest of a position on my own indices that's long, right? It'd be really hard. It's the natural incentive for me to set up my indices at a higher price. Right? Because I will benefit from this particular position versus others, right? So she keeps conflict interest. And everybody can say, hey, you know, wait, the treating side is different than my index settlement price I said. But it doesn't matter. Your incentive as a company to maximize your P&L, there's a huge, his huge complaint interest. You can give the power of deciding on prices to the provider while you're training at the same time. Yeah, yeah, I appreciate that.

And it's, I mean, it wasn't even a question, right? Yeah, I mean, it really is. I mean, clearly it's in your interest for your necks to keep going up and up and up. And as you're looking to, I mean, potentially license to some of these purp offerings, and many of which, I think the vast vast majority of which are quote unquote, like unregulated and probably geo-fenced around offering or servicing U.S. clients, At the same point, I know that there's, I think there's some ETF issuers that are potentially looking to launch products based on your futures contracts at CME.

And I could only imagine the SEC and CFTC having some real big questions about the fairness of those products if, like, theoretically you have the ability to manipulate the price of your index that everything is based off of. So that's incredibly important for us to make sure that our neutrality stands, right? That's why we're going through external audit on Silicon Data, through RISCO compliance, third-party lens, right? We have very strict internal trading policies, right? Not only you cannot trade my indices, obviously,

but you have disclosed your auto positions, right? For example, you loan the Vedia, right? That can be a potential conflict interest. Everything is taking extremely seriously as Silicon data, as an index provider. As we said, everything in our world, the skill is just unparalleled. compared to other product, adding asset class. That's number one. Number two is, I think it's interesting when I talk to the perpetuity market issuers and market

participants. Another things I would spring up is, how do you make sure the index, you know, obviously they have their choices, right? How do you make sure it's not be manipulated? It's very important, right? When you pick partners. And how do you make sure the trader can actually make sense? Some of them suggest that, hey, by the way, we're going to pay.

into popular indices and mix with other indices. And to me, all right, so when you're going to move from when the industry to the other, they have different methodologies. And they're actually essentially different products, right? How can anyone trade if you just any time can switch from one to the other? How are you going to keep your position open and close? Just sounds like, again, another box of warm just came up, right? I think the lack of understanding of the GPO markets,

the index, the index itself is a big problem for me to pick the right partners. Essentially, when my product become tradable at CME, we have a suite of institutional player. There can't wait to use our industry to hatching. We top of all the banks, Harper-Skillers, Neo-Clouds, big AI companies. We're talking about billions of dollars traded at traditional industry.

traditional fusion options products, right? The energy traders and all the basis of training going to be happening. And then if they're going to, I'm sure some of them want to have a purpose venue, right? I don't blame them for that. How can we make sure they're trading in the purpose markets on my indices and also in a regulated, in a very similar rigorousness as traditional markets? That's something I'm looking for, right? I can't just publish my indices and that people trade without being able to sort of a guardrail

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