Jeff Yan - High Frequency Crypto Market Making & the Hyperliquid Exchange (S6E2)

In this episode of Flirting with Models, Jeff Yan, the founder of Chameleon Trading, shares his journey in high-frequency trading (HFT) across both traditional finance and the cryptocurrency landscape. He explains the key differences between "making" and "taking" strategies in HFT, highlighting the critical role of infrastructure and data normalization. Yan also sheds light on the unique challenges posed by crypto exchanges, such as unreliable technology and competitive algorithms, while offering his insights on how to identify and manage risks. He introduces his latest venture, Hyperliquid, a decentralized exchange designed on its own blockchain to provide efficient order book execution for perpetual futures, and discusses how it stands out from current decentralized exchange models. To wrap up, Yan reveals an intriguing discovery: his firm's HFT profit and loss show a negative correlation with mid-frequency price movements, suggesting a potentially valuable, though complex, predictive signal.