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Exchanges are S-tier software businesses.

With AI rapidly eroding engineering moats (we run one with a grand total of 5 engineers), network effects are the only things that matter for long-term retention.

Any trading product that is building a UI/frontend/broker/B-Book is doomed to compete in an ever-tightening noose of CAC.

Liquidity is the only option for viability. Matching models that do not maximize for passive liquidity from a differentiated user base are unviable.

CLOBs are one example that work, put they suffer from a 'leaky hand' problem.

Sophisticated trading firms don't want to place alpha-based orders into an order book with public market data, for fear of 'leaking' their model edge before they get filled.

In this case, alternative trading systems (aka dark pools) can provide genuinely better liquidity inside the spread. Everyone wins.

Something for @QFEX to think about as we scale.

Sign up ASAP to secure the final few spots!

If you're tired of losing money in crypto, come make it back on QFEX

A pleasure to be covered here by the legendary @FourPillarsFP regarding one of our fastest growing products: Quantitative Managed Account.

Just over a year ago, I messaged a senior exec who I really respected in the 'tradfi' exchange space with some innocent questions ahead of our private beta.

Attached is his response.

By the way, the (major) tradfi futures exchange in question is a household name amongst the quant community, known, amongst other things, for their repeated and disastrous efforts to fix trivial design flaws that allow HFTs to extract mid-6 figures every single day.

This is not 'liquidity as a service', just pure rent-seeking and extraction, plain and simple.

Further sins committed by 'tradfi' futures exchanges globally, either through engineering incompetence or worse:

> Expiring futures (outside physical commodities);
> Failures to implement speedbumps;
> Failures to innovate margin systems and liquidation cascades.

None of the above is impossible to fix. Unfortunately, senior execs like the one below:
> Fail to understand how;
> Are too cozied up to their paymasters to cause them any trouble;
> Want to build a moat around their failed technology via regulatory capture.

Every week, we hit new ATHs in DAUs, revenue and volume. Clearly, a large number of people disagree with the senior exec. To everyone who has given us their vote of confidence so far: thank you, you're still early.