semaji.eth

@0xFudrick The word bond is retarded and should never have entered the parlance. These are not bonds. Their risk profile is totally different.

The mental gymnastics Polymarket traders go through with their bonding strategies are just ridiculous. Just because you take a trade with high probability and it earns you 1% doesn't mean you can extrapolate that to an annual return "I get 48% APR with this if I do it every day" You are literally risking getting zeroed out every time you do this.

@imotw2 I would very much want to read no matter what, we're absolutely starved for reads from practitioners.

Writing an article on order execution in market making. Would you rather get it as a series or one long read? Or should I not bother? Lmk.

@MarkBestForex Precisely. Just like selling deep OTM puts, the hit rate over a short sample size is so misleading as to be worse than meaningless.

@semajeth return on capital and what a bad day looks like.

A useful test for the reader: does this PnL chart show that the trader has an unbeatable strategy? Does it show that it is even profitable in the long run? If it were not a profitable strategy, would we expect a streak like this to be possible? What information are we missing?

@AgustinLebron3 @OwlKeeper @andrewcourt1 @0xDmitry @annanay The first remark is meant to indicate that in modernity, there are no prominent philosophical counterweights to vice in the capitalist spirit, not that I endorse said vice.

@AgustinLebron3 @OwlKeeper @andrewcourt1 @0xDmitry @annanay In short, it's in the zeitgeist of our time, and has huge financial backing. Secondly, even if a pendulum swing is preordained, it's entirely possible to me that Kalshi etc maximise via flooring it w greed here and now, as they will likely get crushed post-swing no matter what.

What is the difference between investing and gambling? To answer that, I'll answer a different question. What makes a financial market function? I read a great article by @AgustinLebron3 which argued that markets need participants other than short-term profit maxxers to function. In other word, exchanges are like any other product; somebody needs to get more value (that isn't cash) than they pay (in cash). This passes a canonical sanity check: if the market only consisted of HFT firms, the worst-performing firm would by definition be incurring losses and turn off, then the next-worst, and so on... In traditional assets, retail and institutional traders can buy real companies with real revenues, invest in real macro trends, and hedge genuine market risks. They can make profit over the long run from a growing economy. None of these are true in prediction markets. So who are the bait here? The volume numbers give away the game: it's gamblers. Gamblers routinely head back to the casino despite incurring loss, after loss, after loss. Kudos to @emilyjnicolle for her rigorous piece on Polymarket's 'product market fit'.

@allquantor @michael_lwy @VitalikButerin @DaedalusRsch @probaaron @aradtski @functionspaceHQ @TideMarkets @ZEITFinance @Jake_Nyquist @Nekt_0 @Ranger_Global @jeff__opinion @masonnystrom @RohOnChain Appreciate it! Read yours earlier and it was a great read, think we had very similar feelings about the whole situation. Appreciate your work in policing the commons for rampant clickbait and slop!

@semajeth @michael_lwy @VitalikButerin @DaedalusRsch @probaaron @aradtski @functionspaceHQ @TideMarkets @ZEITFinance @Jake_Nyquist @Nekt_0 @Ranger_Global @jeff__opinion @masonnystrom @RohOnChain Just read it. Thank you for the intellectual work. Im happy that I was not the only person calling this out!

Here's who to follow if you want actually good takes on prediction markets: @VitalikButerin @DaedalusRsch @probaaron @aradtski @functionspaceHQ @TideMarkets @ZEITFinance @Jake_Nyquist @Nekt_0 @Ranger_Global @sybilpm @nic__carter @jeff__opinion @masonnystrom @RohOnChain @aaronjmars @klos @voliti_co @gemchange_ltd @hyperstiti0ns @benfielding @semajeth @0xjacobzhao @0xnagu @SolSt1ne @mikhryc0x @mikita_crypto @marvellousdefi @theoddchain @curiouscamilo @linfluence @jolimmmm @outpxce @socialgraphvc @DougieDeLuca @BetBreakNews @dbarabander @sidbharth @smaaaaliy @thejay @trashman18 @drNeyo @13_niakris @Baheet @a1research__ @akshayraj_v0 @reachavci @njokuScript

@allquantor @michael_lwy @VitalikButerin @DaedalusRsch @probaaron @aradtski @functionspaceHQ @TideMarkets @ZEITFinance @Jake_Nyquist @Nekt_0 @Ranger_Global @jeff__opinion @masonnystrom @RohOnChain Had never read this before, great job. Totally independently I rage posted about this exact individual: x.com/semajeth/statu…

@michael_lwy @VitalikButerin @DaedalusRsch @probaaron @aradtski @functionspaceHQ @TideMarkets @ZEITFinance @Jake_Nyquist @Nekt_0 @Ranger_Global @jeff__opinion @masonnystrom @RohOnChain Thanks for the mention of @ZEITFinance I think its a mistake to tag RohOnChain its just quant cosplay. Wrote about it here x.com/ZEITFinance/st…

@Walodja1987 Very nice, will take a look!

I share your view. Got really bad over time, especially after adding Solana and Bitcoin. That’s why I built the x2xPay payments app to facilitate simple and safe crypto payments using human-readable names. As it’s an app, it works with any wallet. So you can just quickly sign the transaction in Metamask and close it immediately. 😄

Incredible that MetaMask's UI has actively deteriorated from 5 years ago. From a colossal lead, they threw it all away via half a decade of degrading the product. Could just have copied Rabby but refused. Everyone who works for their team should be shot for criminal incompetence.

@michael_lwy @VitalikButerin @DaedalusRsch @probaaron @aradtski @functionspaceHQ @TideMarkets @ZEITFinance @Jake_Nyquist @Nekt_0 @Ranger_Global @jeff__opinion @masonnystrom @RohOnChain Cheers brother, appreciate it. In turn, I'll mention @deepvaluebettor @andrewcourt1 @defiance_cr as good follows. In the interests of full honesty for the reader, I also believe RohOnChain (tagged above) is a total liar and charlatan, and that his posts are outright LLM slop.

@benwfreeman1 Sure, my bad on that. Consider it rephrased with "Kalshi Partner". In most worlds you would be delighted if Polymarket evaporated tomorrow, right?

@semajeth Lol. I'm not a Kalshi employee and I definitely don't have equity. My badge says "Kalshi trader"

I truly want Kalshi, Polymarket, and other prediction markets all to succeed, but when lawmakers are threatening to curb prediction markets for all government action, it’s critical to point out that this is a Polymarket problem (which isn’t legal in the US), not a Kalshi one

@CaffeineTrading @liquiditygoblin Mine. Refresh?

@liquiditygoblin I'm quoting all Polymarket tweets being BS 99.5 at 99.9

polymarket runs on polygon, jito runs on solana the level of bs here is off the charts

This. Young people go into the hedge fund industry thinking they'll leave rich. Every year, salaries gets compressed, non-competes get longer, you won't make partner at top firms. Alpha decay exists for industries too. You are too late for this game to be anything but a cog.

@finn_hulse ...often hubristic horrible decision-making where something being nominally "+EV" in the AM sense justifies an absolutely horrible bet on it in terms of sizing etc. The job gives you this incredibly powerful lens (EV not outcome), but it can induce an unconscious zealotry.

@finn_hulse Agreed on all esp. the bias part - and would actually say it creates a blind spot (it definitely did for me) where you exclusively view things in terms of arithmetic mean. Which makes sense for a trading firm (infinite uncorr bets), but not for an individual - and leads to...

people outside of quant rarely understand how religious top market makers are about expectancy to give you an example, there are some firms where traders will DROOL over their buddy who took a trade for positive expectancy, despite the fact that the trade ended up losing millions of dollars read that again. top traders will be jealous over someone who lost money, just because on average it should've done really well it goes deeper than that if you trade any differently when you're in the red vs. when you're in the green, you get booted the next day you will almost never see a stock chart over time, let alone a chart of your pnl over time. charts only create cognitive lookback biases, and the present/future are the only things that matter this is not life or financial advice. it is only possible because these firms put on so many uncorrelated bets that individual outcomes are completely unimportant. over time, traders who reliably find maximum edge do fabulously well, as does the firm it does create a weird lifelong bias in traders though. outside of the market, they tend to either take next to no risk (reminds them of work) or they have near-infinite risk appetite

@ZEITFinance mechanism is the source of the netting loss of efficiency, and concretely how would one fix it? Cheers again for writing.

@ZEITFinance Genuinely criminal that this only gets 1k views. Great work. Not intuitive to me why "deeper levels are systematically skewed towards asks" btw, don't see any reason for symmetry not to hold here. Also think the netting point would be helpful to flesh out more: what specific...