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Omni Progress Update w/ @variational_lvs
Recorded: July 31, 2025 Duration: 0:50:40Space Recording
Short Summary
Omni is experiencing explosive growth with a billion in trading volume and all-time highs in user engagement, while actively hiring to support its rapid expansion. The introduction of innovative features like loss refunds and spread discounts positions Omni as a leading platform for traders, promising sustainable yields and exciting new opportunities.
Full Transcription
Thank you. All right, mic check, one, two, Lucas.
Mic check, one, two.
Hello.
Sounds good to me.
How are you doing?
Good.
It's a little bit late on this side of the world, but excited to give some updates about
where we are with Omni.
Nice.
It's a little bit early on this side of the world.
So yeah, glad that we could both make it.
I think early and late are always relative terms
to the time zone and also to the sleep schedule rhythm.
So I like to joke that our team doesn't really sleep anyway.
I think you can probably corroborate that.
Yeah.
There's a few of us online at
any given time, and the time zones don't overlap like that. There shouldn't be, but there are.
Yeah, and we've been expanding a little bit. You want to speak to that at all? Are we still
looking for anyone else? Yeah. I really should do an ex-post on that sometime soon, but we're
hiring across the board. We're expanding the team pretty rapidly. As some people are aware, Variational is a tight-knit group of very senior
folks shipping things quickly, but the core engineering team is around 10 people right now.
And I think we want to keep it small and lean, but it's also time as we've really hit our scaling
stride, we'll cover that in a second, time to you know get some more help in here so
we're hiring exceptional and experienced rust developers on the back end full stack developers
kind of across the board and svelte typescript or react typescript on the front end side
as well as uh you know a little birdie told me we might still be looking for a little talent on the
growth and marketing side if there's any exceptional people. I think the real moral of the story is if you're experienced and think you have a lot to add, then always get in
touch. Definitely. You guys know where to find us. You can always DM us here on Twitter or email us
hello at variational.io. But yeah, let's jump into the meat of the Twitter space today, which is the progress update.
I think obviously over the past month or so since our last Twitter space, a lot has happened.
We hit a billion in volume.
We saw all-time high 24-hour volume.
We saw all-time high open interest users, everything. So for people who are not obsessively staring at Omni's metrics,
you know, how has activity on Omni looked, Lucas, since our last, you know, Twitter space? What
has been most exciting to you? Well, I think you summed it up. But the short answer to Omni
activity over the last, you know, two to four weeks is ridiculous and growing more ridiculous by the day.
I like to joke, I've been asking people
to pump the brakes, like calm down a little bit.
And even Max and kind of the growth team,
we've been chatting internally.
We still have so many of our core features yet to ship,
but pre-incentives and pre-points, et cetera, but just seeing
the amount of interest that there is in the product and sustaining that into volumes,
like, that's awesome. In particular, over the last two to four weeks, we shipped some major changes.
We shipped a new spread model, we shipped a new order entry UI, we shipped configurable leverage,
amongst many others, you know, we can enumerate a few later. And I really think we saw an immediate and large uptick from that.
We've also been experimenting a tiny bit with organic growth strategies running very, very
small like competitions really to just drive testing out new features.
Like I think we did a few hundred dollars for a prize for a share out competition, for
example.
We're getting a lot of good feedback there.
And these these like tiny experiments, I think think are emblematic of our strategy right now,
is to just make sure that the growth is organic and make sure that the adoption is also organic
and really dial in the product to, you know, get people excited. And then I think we can take growth
strategies up to 11 once there's kind of that excitement about the product. But in short,
you know, metrics wise, I think the top line number speaks for itself,
a billion dollars in lifetime volume.
But really, you know, I'd point to a chart
that I think both Ed and I posted on Twitter
maybe a week or two ago that shows volumes,
open interest, daily active users,
really every metric is going exponential.
So we're roughly doubling on every like two weeks,
1.5 week basis.
You know, it took us many weeks, 1.5 week basis.
You know, it took us many weeks, if not actually a couple months to go from, you know, zero dollars in volume to say like 100 million. And then we've gone from this roughly 100 million dollar mark or a few hundred million dollars to a billion dollars in just under a month, if I'm not misquoting.
These days, I think our new normal has changed.
We used to get excited on the platform,
again, because this is so early.
Whenever we were doing a $1 million a day,
then a $5 million a day, then a $10 million a night.
Now a $20 million a day or under feels a little small to us.
And I think our new normal is going to be 100.
So the next kind of rung once we ship our core two features in these coming couple of weeks is probably going to be a billion So the next kind of rung once we ship our, you know, core two features in these
coming couple weeks is probably going to be a billion dollars in daily volume. But across the
board, open interest is up. TVL is up. Daily active users are up substantially. I think we're getting
great feedback from that. And it's super exciting traction. Yeah, so you actually touched on my next
question a little bit early. But I wanted to ask, like, we've gotten from that $0 to $10 mil a day kind of pretty comfortably, and we've started to taste what it takes to go from $10 mil to $100 mil a day.
What does it take to get to that, you know, one bill daily volume level?
bill, daily volume level? Well, for me, I mean, again, all of our growth right now is organic,
and that's been really important to the team. You know, I think volume is a statistic that can be
manipulated a bit. It can be definitely incentivized. And we want all the growth to be organic.
We don't want, you know, the product to be pumping stats. We want them to be reflecting
how much people are enjoying the product. So what I thought was particularly emblematic, what took us from that $10 million a day range to
edging up on 100 was when we shipped these core product improvements, our V2 UI, substantially
tightening spreads, configurable leverage, et cetera. I think what's going to take us from
100 to a billion is honestly loss refunds. We've been teasing that a little bit on Twitter very recently.
It's very much in late stage development.
We were just getting some community feedback on the exact incentive and kind of mechanism design.
And that's something that we're incredibly excited about.
So I think that's really when the full package of Omni comes together and the value prop is out there.
I think that combined with our V2 UI and us taking our first stab at taking the shackles off of Max and making a little bit of noise on the growth side, that's going to take us sailing towards a billion dollars in daily volume.
You know, there is a little bit of elbow grease. It's a competitive space and we need to get that the word out there. But I'm also really excited that there's going to be a lot of virality to the marketing of, you know, oh, I just got, you know, $10,000 loss refund on Omni, and that's going to put a lot of eyeballs
on us very quickly. So it's a super exciting time. And I honestly think the best situation
you can be in when you're running a product is for the product to sell itself. So we've grown
thus far on organic growth and people loving the product. And, you know, we have these major
features plan that we're rolling out. So I think that's really what's going to take us into that next big push that
rung up. Not to mention taking off the invite-only beta, but we're only going to do that once the
product is in a point where, you know, I think it's a 10 out of 10 and there's a few more still
left to go, a few more releases left to go for that. Okay, so you mentioned loss refunds, and I think this is something that a lot of people have been excited about.
It's something that we've been positioning as one of our flagship features.
So what does the model look like that y'all have been testing against historical data?
And what do the numbers look like?
What percent of losses end up getting refunded?
You know, what percent chance do people have to get a loss refund?
You know, what can people expect whenever that starts to go in?
Yeah, let's actually, to answer this question, let's start from first principles, because
I think what's important to understand with loss refunds is that it's a sustainable and
core part of the product rather than a part of the product that's, you know,
a temporary like incentive just for us to grow early. Loss refunds are something that we're
doing now and continuously into the future. It's a core feature of Omni. And the main reason why
loss refunds and some of these other reward mechanisms are sustainable on Omni and perhaps
difficult to implement on other platforms is because we capture so much more
revenue per dollar traded. And that's because the Omni liquidity provider, rather than leaking
profits to external market makers that are in the order books, is capturing that spread for
every retail trade, despite quoting a very tight spread and a very fair depth for all of our retail
users. So the starting point for any of these mechanisms is thinking, OK, that's where the revenue is coming from. Even when I'm diligencing a new platform or looking into
other ideas in the space, I ask myself, how sustainable is this? Is this like burning VC
cash? Is this relying on some type of rapidly inflating token reward? And the answer for us,
for us again is like it's actually revenue being generated on a daily basis by the platform.
again, is like, it's actually revenue being generated on a daily basis by the platform.
So let's move back to how loss refunds, we're actually envisioning them working.
We essentially are taking a portion of this revenue that we're generating in Omni Liquidity
Provider in real time and we're allocating it to what we call a loss refund pool. This happens
behind the scenes but you know I just want to mention this is kind of where we earmark or get
the capital in the first place that we're actually using to do the refunds with. In terms of how it
works for traders, the point of a loss refund is to refund just that losses. So when you generate
a loss, which we define as when you realize negative P&L, so if you have a position open
that's in the red, if you close part of that position or the entire position, that generates realized losses. Then we run a little algorithm to determine how much of a loss refund the user
will get. And this is essentially tuned to be like a dice roll. The loss refund can be anywhere
between zero and 100% of the entirety of the loss. And this algorithm is tuned in such a way that there's kind of a chance for many users to win.
And we can scale this based on things
like users' volume tiers, time since last run, et cetera.
This is the final piece
that we're gathering community feedback on to tweak.
But the high-level stats,
when we ran this on our historical data,
which is all the users who have traded on Omni private
beta from the launch until now, this around billion dollars in volume, we see average odds
of winning is around like 4.4%. So another way of thinking about that is around 4.4% on average is
like the loss refund. But the average refund notional is actually quite exciting. It's $100.
It's $100 and 3.56. I'm reading from statistics that Edward, my co-founder, shared a few days ago when we were soliciting feedback. So that's the average amount that our users are getting back
per closed trade or per kind of realized negative P&L. I think that's a pretty exciting number,
to be honest, for all types of account sizes from small retail up to, you know, daily power traders.
And that's a substantial amount, as is, you know, before 4.4 or 4.5%. The max refund,
interestingly, that we saw was about $13,000. It was 12.9K specifically. So this means that
our loss refund system can scale even to refund relatively large
losses for kind of power users or very active guys. The average refund over the loss size,
so thinking through, okay, for the winners, like how much of a refund did they actually get?
That was 89% of their loss. So again, substantial. And I want to emphasize this isn't a paltry little, oh,
I'll get a few cents back if I close thousands of dollars in the loss. There's a substantial
chance here, both on average and in the success scenario of that dice roll, to get a pretty
substantial portion back. And the final piece is the overall percentage of realized P&L that was
refunded across the platform was 8.44%.
And that's really underscoring, again, sustainability.
We're generating a lot of revenue.
We have a pretty substantial cash flow that we're sharing back with the users.
And I think this is an incredibly exciting mechanism for that.
So that's the high level.
Again, let me just briefly summarize.
It's not a one-time thing or growth mechanism.
It's a sustainable core part of Omni,
and it will be one of our flagship features going forward.
Loss refunds occur whenever you realize a loss.
So it's not based on UP&L,
but when you close a trade in the red,
whether it's a partial close or full close,
we'll kind of throw the dice each time, so to speak,
to determine a loss refund.
And you have an average outcome,
which is pretty good. Again, using our historical
data, around $100 refund, 4.4% odds of winning that. And you have, let's call it an upside case
scenario of getting the entirety of your loss refunded. And that can be in our sample data up
to like many, many thousands of dollars, again, that 12.9K. So again, I think this is going to be fantastic.
And like, it's a feature that's only possible on Omni. It's one of the ones we designed around
actually for a long time. And I think this is coming in the very, very near future. And it's
going to be our killer feature. So going back to what's going to take us from 100 million daily
volume to a billion, it's people getting excited about this, in my opinion. Got it. Okay. And then generally, like, what is
the status of tiers and rewards? And do you have any updates on what those will look like? Since,
you know, I imagine they've been worked on quite a bit since our last call.
Yeah, so same thing. Let's go back to first principles and talk about what are tiers and
rewards? And why do they exist exist and what do they do.
So firstly, what is a tier and reward?
Well, you know, I see a bunch of our listeners here, some of the faces I recognize from Discord and elsewhere.
You know, you guys have been around in crypto, you know, you know the drill or even in video
games and everything else.
Tiers and rewards are based on your progression on platform and they're meant to incentivize
and reward our most active users.
So if you are a guy who's logging in every day to do trades across a multitude of markets, or if you're a big fish and you're doing lots of volume, or if you're someone who's
a big depositor into OLP or any of these kind of other pieces, we're trying to build
incentive mechanisms or tiers that promote you through and give you better scaling of
these reward systems.
So some of the types of things that you can expect for reward tiers are modulations or increases in
your referral, your reward, your spread discount, your loss rate back odds, your loss rate back,
like other types of cuts and more allocation to OLP capacity. We're cooking up some pretty
interesting things here. You know, we're not on the naming side so capacity. We're cooking up some pretty interesting things here.
You know, we're not on the naming side so far. We're thinking, you know, bronze, silver, gold,
platinum, diamond, and grandmaster, referencing back my childhood passion, Starcraft. And,
but, you know, I think we're thinking about some really interesting unlocks. For example,
as you hit certain lifetime volume milestones we're going to give you
certain types of one-time rewards as you unlock different uh kind of reward rates and
different tiers we're going to give you everything from like aesthetic things like
colors on the leaderboard and card themes and discord roles up to again i think the thing that
really moves the needle is changing the uh rate of refund or kind of the rate of outcomes on your
loss refund. So there's pieces here that are really built to reward our early community members,
our most active community members, and essentially make them have a more rewarding time trading on
Omni. Okay. And the other thing, obviously, there's a lot of excitement for lost refunds and all
these reward mechanisms. The other thing that I've heard people very excited and very much
looking forward to is what we've called the UI v2, the new UI with brand new skin for the site.
What is the status of that? How has progress on completely revamping the UI then?
status of that, you know, how is progress on completely revamping the UI then?
Progress is great. Let's say I have the front-end engineers locked in the dungeon
and expecting to ship it very, very soon. The designs are mostly finalized. They're looking
great. I expect us, you know, once we even have it on testnet to solicit feedback from our broader
community, our power users, et cetera, make sure it's dialed
in to be exactly what we want it. I want trading on Omni, even just from the UX perspective,
to be as 10 out of 10 as the underlying infrastructure that we have for OLP and
these amazing things like loss refunds and our spread infrastructure, et cetera.
I think what we have right now is going to be a nine. We're going to take a little bit of
community feedback to get it to a 10,
but I'm really excited to share it.
We tease a little bit on the Twitter.
I think Max will tease a little bit more probably heading into the end of the week.
Front end guys are locked in the dungeon.
I expect actually, I hope and expect to have it on testnet this coming week.
So I want everyone to give it a try, give us their genuine feedback.
And then as soon as essentially we're happy with it and we're happy that the community is enjoying it, it'll go straight up to mainnet.
But people can really publicly kind of participate in that process and help give us feedback as early as next week.
And again, you know, assuming everyone's liking it, I see no reason why we couldn't put it in mainnet as early as two weeks out from now.
So we're talking in the order of days, which is really exciting. And at the very least, we'll have it up there for feedback very soon.
And that's how we operate, as a lot of people know. Even for our flagship feature,
loss refunds, we're soliciting feedback directly from the community in terms of
how to tweak these values, how to think about the rates and just the psychology behind it.
So I think the same
is exactly true for Omni V2 like participate give us your feedback no
little feature suggestion is too big or too small and I want to make the type of
trading UI that everyone wants to see I want people to be excited to log in and
say hey wow Omni that's beautiful and I think we're gonna get there very soon
yeah I think we just need subway surfers behind the chart, and we're in a pretty good spot.
Yeah, the so-called Zoomer mode, I know you've been advocating for it.
Don't worry, it's in the queue.
It's just behind shipping the rewards page for lost refunds and all these other exciting pieces.
Priorities, I get it for sure.
Yeah, so obviously a lot of things upcoming.
Is there anything that's like super, super near term?
Like, is there any release going out today that people can expect?
There is a release going out today.
I would expect it to be a relatively smaller quality of life changes across the board,
really laying the groundwork and the
feature set that we need for a loss refunds to be enabled shortly. And, you know, I just want to be
clear about the timeline on rewards since we just talked about UIV2 timeline. The rewards page is
live on UIV2, so that'll be on Testnet shortly for feedback. And I hope to enable some form of the
rewards page and some form of the rewards as early as when we put that out.
So again, talking about like a one-ish week timeline
to have it in Testnet for feedback
and a two-ish week timeline to have it on Mainnet,
again, depending on the quality of feedback we get
and how many changes we want to make.
So I am very excited to share that with our community.
I mean, honestly,
that's what we've been working towards for so long.
This is going to be the true unlock of Omni as a platform. And I think people are already seeing our value, and that's why we're kind of scaling volumes exponentially these last few weeks.
But it's really, you know, fully enabling this feature set that's going to take us to the next level, because this is what Omni has been designed for since day one.
because this is what Omni has been designed for since day one.
All right.
And now that we're seeing a lot of this growth,
people are starting to spread the word about Omni.
Referrals are starting to pick up a little bit.
What kinds of things do you want people to share,
emphasize whenever they're like introducing Omni to someone new?
I think it's a great question because, you know,
I will apologize to our community. We've had the shackles on for so long. You know, we've talked about question because, you know, I will apologize to our community.
We've had the shackles on for so long.
You know, we've talked about, wow, you know, this is an amazing new kind of paradigm of, you know, doing trading, right?
RFQ versus one liquidity provider.
We can capture all this spread.
all the spread, we can avoid leaking all this revenue to external participants.
We can avoid leaking all this revenue to external participants.
And so far, people have been able to see the benefits of that in terms of the tight spreads,
the depth of liquidity, the ease of use.
And I think that's great.
And don't get me wrong.
I think that's actually what's leading to our volume spiking, even with just the small
organic growth.
But I'm particularly excited and I want to shift the narrative entirely to Omni is the
most rewarding place to trade.
And what that means in practice is Omni is the only platform that's going to give you a loss refund. Omni is the only platform
that's going to give you, you know, two or three basis points spread that are, you know, tight
until you're trading like million dollar or $5 million tickets on like majors, for example. Omni
is, you know, the only one that can do that sustainably with zero fees. So I want those things to be highlighted.
I think Omni is the most rewarding place to trade.
Omni is one of the most liquid and cheapest place to trade.
And we like to think we list everything that you want to.
We still have that, you know, it's 500 plus listings from my last recollection.
And it is our intention to add even more over time.
But those are really what's getting me excited.
And I think if I were pitching it right now, I'd say Omni is going to be the most rewarding place to trade.
But if I'm pitching it in two weeks, which I hope all of you guys are, I think the proof is going to be in the pudding.
I want you guys to take your loss refunds and spread them across the world and say, hey, I moved all my've been, I moved on my trading to Omni, you know, why are you trading somewhere else where you're not getting
a loss refund? You know, I think that's going to be an amazing and easy pitch for us.
So I think one thing to take a step back and like it really address even more is where do,
where does all the money for, you know, these kinds of rewards and benefits come from? And,
where does all the money for, you know, these kinds of rewards and benefits come from? And,
you know, how do, you know, OLP, LP still get paid? How does the team get paid? So if we,
you know, assume that OLP has one kind of revenue input, which is making money from market making
activities, what are the outputs? Like what, where's all of that money going? What does the
split look like? Is that something that you all have decided on yet yeah um roughly so i can definitely share that and i think it's a great
question so i just want to emphasize you know we we don't take fees but the platform still generates
revenue and it generates revenue off of the spread right so this is uh the same reason why citadel
and wintermute and rob you know h and Hudson River Trading and everyone else makes money.
It's that market making on the other side of flow is a profitable business.
And we've built a fully functioning market making system as sophisticated as many of the other strategies at some of these top firms and generate substantial revenues sitting on the other side.
substantial revenues sitting on the other side. So despite the fact that we can offer retail trading
at a very attractive spread and depth on hundreds of different assets, we can still generate quite
a lot of revenue from the market making side. And that all goes, let's say to start, that's all
revenue generated within OLP. I'll leak a little bit of alpha on this call. We ran these numbers actually yesterday. The current 90-day annualized
APR for OLP is 412%. The SHARP is just under five. And there's about $2 million of TVL there
supporting this about $400 million in volume we've seen over the last week to week and a half.
So I think this demonstrates the scalability and the size of
performance. Now, I will mention the current APR, the kind of the current return of OLP is pre us
enabling these returns. But that's, you know, these rewards. But that's where the funds are
coming from. Market making is very profitable. We have a really sophisticated system that's generating awesome revenues. And I expect to split that, you know, APR rate that I just mentioned, roughly like a third, a third, a third between protocol fee, which is going to pay for at scale, at least we'll enable it later.
going to pay for the sustainability of the team, things like token buybacks, things like
platform operations, et cetera. A third going to roughly, again, we're tweaking these numbers,
a third going to platform rewards. So this is where that pool for loss refunds comes,
as well as other different types of rewards and commissions to users. And then roughly a third
is going to be retained within OLP. And as a reminder, the team's not keeping this long-term,
the point of OLP is to open it up as a public vault. So the rest will go back to OLP
depositors, which I expect to still be very strong in terms of APY or APR. So, you know, this is kind
of the rough revenue model, but think of it as a waterfall, right? Users trade on the platform. OLP,
Omni doesn't take fees, but OLP generates revenue from market making.
And OLP's revenue is really strong because it's a sophisticated system.
So then we have this, you know, kind of pot of revenue that we then split amongst, you
know, three or four different pieces, the most important of which are the user rewards
like loss refunds to fund that loss refund pool, as well as funding the platform operations,
things like token buyback, and also, again, the server and the team.
And this makes the platform sustainable.
So we can offer, again, loss refunds, zero fees, et cetera, very sustainably and long
term.
And that's because of the sophisticated market making strategy that's generating the returns.
Yeah.
And so I'd love to hear actually a little bit more about how you're thinking about OLP
deposits and rationing those.
So I think a lot of people have seen the trend of like whenever a vault is at very low capacity,
say a couple hundred thousand dollars or a couple million, its APY is incredible, has
great performance, but then it ends up balancing out to like kind of a market rate as deposits
flood in and,
you know, dilute that APY.
What are your thoughts there?
Are we planning to protect OLP's APY?
And if so, how are you thinking about giving away those deposits?
We are.
And the short answer is market making is a capital, what we call like a capacity constrained
strategy, which means the more volume there is on platform, the more capacity we have in OLP and the more revenue we generate.
But at the end of the day, you know, there is some upper bound to the volume we have on platform, even if that's a billion dollars a day, even if that's 10 billion dollars a day, might be a relatively large number that we target to be the TVL of OLP.
large number that we target to be the TVL of OLP, but eventually it will cap out on capacity.
And that's especially true just to be transparent at these relatively early stages. It's also why,
as of yet, we've been able to fund it off of Variational's own balance sheet, which I'll
remind people is primarily capital we generated when we were a proprietary market maker over the
last few years. So we're funding it, self-funding currently,
as we open it up to public deposits. We want to make sure that our community is able to deposit.
I would not prefer OLP returns to be diluted by a huge whale coming in and putting, you know,
$50 million of TVL into the pool. So we are going to take steps to align OLP deposits
with platform activity and likely roughly correlated with tiers. So what this means is
those who are very active, those who are again trading on platform, who are doing volume,
who are generating losses, who are maybe doing referrals, any of these types of activities that
are helping to gain kind of tier or activity,
let's say on the platform, we're looking to tie those to essentially allocation to OLP TVL.
So we'll constrain it to be try to focus on giving our community allocation rather than just letting
it be diluted into, you know, tens and hundreds of millions from large institutions. So that's the
high level idea.
And to put a pin in this, it will be capacity constrained. And I think that'll be especially true in the relatively earlier stages, as we are still scaling up volumes right now,
we can support, let's say $100 million of volume, I would expect us to have somewhere between five
and $10 million in OLP. So I want to make sure that this is protected,
so that the depositors, which are going to be our community, are able to generate quite a nice APR.
Got it. And how do you think about the capital efficiency of OLP? I know this is something that
has become more of a topic for our team recently, as we saw those big OI spikes, you know, how much, how much capital
does it take for OLP to sustain, you know, 10 mil OI, a hundred mil OI, et cetera?
Yeah. The answer to that depends on a few, a few factors, which are, which do evolve over time.
So I won't quote an exact specifics. For example, you know, just what mix of assets are people trading on platform?
Are they trading things at 50x leverage, at 20x leverage, etc.?
It does also affect in some instances how much capital OLP needs to keep on Omni.
And then it also depends on what types of assets people are trading and what types of hedges we have on external venues.
we have on external venues. So for example, for a very good reason, but Hyperliquid in many cases
might have slightly lower allowable leverage than say external hedges on a Bybit or maybe a Binance.
So the mix and composition there do roughly affect things. But just using rough numbers,
OLP is highly capital efficient, primarily because, you know, we can trade with leverage just like retail users can.
So the mental model is, you know, we don't need $100 million of TVL to support $100 million of OI, nor to support $100 million of, you know, making reasonable assumptions about the mix of assets traded, but especially not to support $100 million of daily volume. Right now, again, OLP is around
$2 million of TVL, and that's supporting daily volumes that have spiked up towards, you know,
50 to even 80 million. So I expect us to try to keep the TVL, you know, somewhere again in the
single digit millions for the smallest foreseeable future. But as we scale very rapidly, I think,
with the rollout of some of these new platform features
like loss refunds,
we will continue to add a little bit more funds to OLP
and hopefully in the near future,
open it up to user deposits,
again, following a community-first approach
so that we can share the performance
and some of this constrained capacity with the community
as we raise more
capital to support my way. Got it. Okay. Taking it back to rewards for a quick second. I know we
talked about loss refunds for a good amount, but one other reward that I think is just as big
as the loss refunds that we haven't covered as much as is spread discounts. So I'm curious,
you know, how, first of all, how is it possible for Omni to be able to offer spread discounts?
Like, I think that's something that, you know, has never even has never happened on any other
exchange. And then how aggressive are you expecting to be able to get with those discounts?
Yeah, those are two good questions.
The answer to the former, why can we offer spread discounts, is because in an RFQ system,
we know who we're trading against.
So when you trade on an order book, let's say the other party who's the maker putting the level in the order book doesn't know that it's max on the other side doesn't know
that it's you know luke on the other side all they see is price levels and numbers on screen
so in this way they have to be relatively defensive when they quote on the top of the
book they have to assume that someone can come in and take the price with relatively informed flow. Now, when we're quoting on Omni for our
most active users, guys at higher tiers or higher reward tiers, people who are active and we can see
are great in good faith day traders and so on, we can get quite competitive with the quotes we
showed to them. And that's primarily again because we can see who we're trading against. That's a benefit of an RFQ system that's not really possible on a limit order based
exchange. And it's also something that's possible, as I mentioned, because, you know,
OLP is a sophisticated market making strategy. It can generate pretty strong performance and
returns at a variety of different spread levels. So there is a little bit of room to, you know,
bring those even tighter, especially on certain assets, while still maintaining good performance. So we want to do this sparingly. I
mean, the whole point of OLP is to generate also strong returns for the OLP depositors, strong
returns to fund our programs like loss refunds and others. But there is some room, again, at the
higher tiers to play with spread discounts. And I think that's going to be a really powerful feature for the day traders, the power users, guys who are maybe even doing API-based trading or funding rate arbitrage and other types of strategies where they want to execute very frequently and are constantly crossing the spread.
I think that's going to help further reduce their execution costs, which I'm proud to say on Omni, I think, is already one of the lowest, especially if you're trading in size.
Okay. And then the last thing that I wanted to cover right now is yesterday we saw that Ed's podcast with Corey called Flirting with Models, Ed was on an episode of it.
You know, what is Flirting with Models for the people who an episode of it. What is Flirting with Models
for the people who have never heard of it or watched an episode? And then what did they talk
about in there? Do you have any cool things to summarize? And then can we expect any more
podcast appearances from either of you two? Oh, yeah, there's a lot of questions there. So
I'll put the middle one actually back on you in a second
which is what were your favorite things i covered you know i think the funny thing when i'm listening
to uh podcasts and ed speaking i i talked to ed my co-founder all all day every day and uh you know
i i can almost quote exactly what he's going to say in response to something we've been working
together for 10 years um and i you know i i like to think because of that, I've absorbed a lot of his thoughts and opinions and specialties even on the quant trading side. But for, you know,
to take even two steps back before we get there, for listeners who aren't familiar,
you know, I'm the founder of a variation along with Ed. I'm an engineer by training. I do a
little bit on the business side these days, but primarily I write code and try to make it high
performance and do things in high frequency trading and distributed systems.
My co-founder, Ed, is a quant by training.
We've been kind of a team working together for a very, very long time where I build the engineering side and he builds a lot of the models, risk systems, quoting all the fun statistics and math.
So, you know, this kind of ties into Flirting with Models. It's a podcast that actually meets some investors and like quants and others who manage particularly like automated trading strategies, quant trading strategies, really mathy, really smart guys.
Guys like, for example, Jeff from Hyperliquid were on Flirting with Models.
He was actually on there in the early days of Hyperliquid talking about his vision, talking about his own background as a quantitative trader.
So we honestly do compare ourselves in certain ways to the backgrounds there.
We love Jeff and team, and we love that they came from Quant Finance.
That's the same as us.
So I think it's kind of a fun full circle moment that Ed was on there recently as well.
Also, as Variational and Omni are in relatively early in our growth cycle and life cycle.
And he was sharing his thoughts and lessons from our 10 years nowadays in OTC trading
in crypto and high frequency trading and market making.
And I think they also had a very nice conversation about Variational and Omni and the market
and differentiation.
But Max, I'll ask you, what was your favorite part of the podcast and what they covered?
Oh, yeah. I mean, there were a couple great moments to me. I think one of which was
when Ed was talking about some of the early instruments in crypto. And he was talking about
just some crazy things like ETH squared, where you just get the returns of ETH squared.
And he was talking about, I think it was BitMEX, like one of the first
perfect exchanges, like had a horrible liquidation engine. So you could end up getting like really
deep negative balances, like just all kinds of like insane things to hear about. In like the
early days of crypto. Because I guess for me, like I'd heard about crypto around the same time,
but certainly was not as deep into the trading world at all.
So it's cool to see what people were doing there around that time. And then, of course,
I think we don't really talk about this too much because we're so focused on Omni, but
the things that Pro can unlock and just the generic protocol can unlock are actually really
cool to hear Ed opine on and share some thoughts
on like, okay, you know, what could people build with the underlying infrastructure? Or what do
you expect people to do on pro? Those are all, you know, I think great. He had some great answers to
those. So I would definitely encourage everyone to check those out. But yeah, I thought it was a
great podcast. I imagine I'll be going back to it to listen some more. But yeah, I thought it was great.
Yeah, I think that's a good point on the pro side. You know, something Ed and I probably don't even talk about enough like options, you know, OTC structured products and people making up kind of crazy new types of instruments doing things like, I mean, these are somewhat common in TradFi, but in crypto, they're just getting started.
Things like interest rate swaps, other types of structured products, variance swaps, etc.
I think this is fascinating.
And there's so many directions that we can take pro just to match the wrapped like trillion
dollar OTC market where it currently is and help bring that on chain, but also longer
term to really drive, you know, I think a lot of financial innovation.
So I'm super excited for that.
I know it's something that we try to balance, you know, how much we talk about Omni, which
is what we're shipping over the next quarter into and then pro, which is coming next year.
But I'm sure there's plenty of fun tidbits
about both our OTC trading experience
and also where we see Pro fitting into the market.
But yeah, again, Corey at Flirting with Models
is an amazing host.
I think he has a really strong following
in the quant trading community specifically.
And again, like Jeff from Hyperliquid
was on there in the early days of Hyperliquid.
They had a great chat. I actually remember us listening to that back in the day
and I really enjoy the fact that we're kind of coming full circle
now Ed's on there talking about Omni as we're early on
so I hope that people will give it a listen
I think there was a lot of high quality stuff discussed there
maybe you'll uncover some alpha like we did when we listened to the early interview with Jeff back in the day.
So if Ed's, you know, the quant side of the team, you're more of the engineering side of the team.
We put Ed on Flirting with Models, which is a quant podcast.
If you were to pick, you know, what is your dream podcast that you would love to get on someday?
Oh, I don't know if I can answer that question because I feel like I might hurt some feelings.
I think there's a lot of really high quality crypto podcasts.
There's a lot of really high quality engineering podcasts.
I try not to pick favorites, but we always take introductions to kind of any podcast
out there and happy to. But if I were to pick
a couple or let's just say, I won't say the name, but I'll nudge in a specific direction.
We've known, for example, Tom and Dragonfly for a very long time. He's an investor.
We've known Tarun through the Bain Capital ecosystem for a very long time. They're an
investor and we've gone to many events with them.
Little Birdie told me they do a podcast together that is a fun one to have a lot of chats about crypto retail adoption, especially. So maybe that one might be interesting at some point,
but we'll see where the wind takes us. And then right before you start closing things out,
I actually just saw this, you know, I'm still waking up here getting locked in for the day, but I just saw that Circle is now like native to Hyperliquid.
How do you think that's going to impact both Hyperliquid and Arbitrum?
Well, that's a good question. I think it's a little bit of a loaded question. I think for Arbitrum, maybe that's not the best news overall. You know, I think native USDC on Hyperliquid might sap a little bit
of their TVL over. Although, obviously, I think there's still a good relationship between Hyperliquid
and Arbitrum, and they're still frequent, you know, A, there's a lot of still Arbitrum USDC
locked there, and B, that's still a main place for their bridge, amongst other tailwinds.
I think Arbitrum has been killing it recently across the board, but that's a story for another time.
In terms of Hyperliquid, I think it allowed them to build much more seamless rails.
I think actually they might move eventually towards doing their own kind of card or fiat on-ramps. The ability to have native USDC starts to unlock questions
of creation and redemption.
And the creation of redemption of USDC occurs in fiat in USD.
So that's a pretty exciting path forward.
I know we've been on some calls exploring some partnerships,
let's just say across various ecosystems where we might have our own versions of some of these types of integrations coming.
And I look forward to a future where we're knocking down as many barriers as possible to users onboarding onto Variational, onto Omni, depositing funds from any source that they have and going off to the races.
that they have and going off to the races.
But we are very happy in Arbitrum
and I foresee us hopefully being, you know,
now maybe one of the main drivers of TVL
if Hyperliquid is moving away from native Arbitrum USDC.
All right, good answer there.
Didn't step on any toes, I don't think.
But all right, that's really all that I have for, like, planned topics.
But I'm curious if you have anything that we didn't cover yet about, you know,
anything we're shipping in the next week,
anything you're personally excited to see, you know,
happening on the platform recently.
I'll note, I just saw someone in the past 24 hours on the leaderboard
is up, like, 35K or something, which is pretty awesome
to see. But yeah, anything you want to share? Wow, awesome. Well, I'll give just a few,
a few little, you know, tidbits from what I'm noticing in the community. Number one is,
I'm noticing we're scaling the community out, but the community is remaining really great and
supportive in terms of providing feedback, you know, providing good
vibes even to each other on the Discord, you know, sharing. I've seen some guys starting to
share strategies trading on variational on Omni on Twitter, for example, certain types of like
funding rate opportunities, certain types of flags when Omni has much better execution than other
platforms for those who are interested in certain communities and certain tokens and certain day trading.
So I think that's great to see.
And, you know, I'm particularly interested.
We've said this before on many of our past podcasts, but for new listeners, you know,
I'm particularly interested in being really accessible as a founder.
Like I think products get better when the founders and the team are watching the community
feedback every single day.
So something Max and I go over and really the whole rest of the team is constantly active in Discord, on Twitter, etc.
We watch as much feedback as we can and we try to integrate it directly into the product. So the thing that I've noticed, which is really positive, is as we've made a little bit more noise, as we've gotten amplified by Marana and by Arbitrum and by
flirting with models, Corey and everyone else. It's brought more people into the fold. It's made
some more people aware of what we're doing. They've been looking for invite codes, getting on
there and testing it out. And they've been providing feedback. And honest feedback, even
brutally honest, is welcomed. And it's something that I read every day in the Discord. That's the
best way to get to us. It's something I read on Twitter and I encourage everyone to have fun with the platform,
actively help shape it, give us your feedback. And especially when we're releasing V2 on Testnet,
which hopefully is very, very soon and rewards as well. I want you guys to go crazy, play with it,
enjoy it, but give us your thoughts on it. And we're going to make those an amazing feature, like a very new thing to introduce to crypto trading.
I'm super excited.
Okay.
The last thing, I have one thing that the community has been bugging me to ask about, and that is trading competitions.
We did a couple during our testnet era way back in the day that some people might remember.
But I've had a lot of people start hitting me up and start wondering when mainnet trading competitions,
when can we start using that leaderboard for some prod trading competitions, have some fun rewards.
Is there anything in particular that we're waiting for, like new UI or rewards or anything like that to kick those off?
we're waiting for like, you know, new UI or rewards or anything like that to kick those off?
Well, both, to be honest, I think it is infinitely better to use UI v2 and just stare at it every day and have a great time, you know, trading on there.
And when we're doing a trading competition, people are punting, you know, left and right and trying to, you know, make those biggest gains sometimes by trading more volatile stuff.
I want our community to be doing that when loss refunds are live, because I think those will be
very helpful, to be entirely honest. So that's my mental model. I think we are interested in doing
some. I roughly want to do them after we ship these two big feature improvements that are kind
of on the radar. And also just speaking transparently as a founder, I think these types of competitions for us
are not ways to just drive sporadic volume,
but they're ways to get the community active
and engaged on the platform, especially with new features
so that we can test them out and get feedback.
So it's most useful to us when you guys are enjoying it
and testing something new
and especially using some of these core features
like loss refunds.
So I wanna make sure we put those, let's say through the ringer,
and we'll do that primarily after, again, like the next week on the testnet,
and then probably two, three weeks out when we're enabling some of them onto mainnet.
I'm super excited for that.
All right.
I think that covers it all then for this Twitter space.
at all then for this Twitter space.
We have gone through quite a bit.
And yeah, I'll just say broadly,
yeah, we've seen a lot of great activity.
We're going to be expanding referral codes
continually even more.
A lot of stuff is right around the corner.
We've got tiers, rewards,
all kinds of fun stuff,
competitions, as Lucas was talking about.
Lots of things coming.
So definitely stay tuned for the next, what, as Lucas was talking about, lots of things coming. So definitely stay
tuned for the next, what, month or so of updates. I think things will be pretty cool by the end of
the month. For sure. I've been banging the drum calling it occasionally on Twitter, like Omni
Summer, but we've already shipped so much over the last few weeks. We have another month plus of just insane shipping speed for some of these biggest new
product features.
And we're never going to stop shipping.
We're never going to stop improving and tweaking the product.
But we are rapidly approaching the point at which I will say at least our main banner
features are all live.
UIV2 loss refunds are the main ones amongst some other UX improvements. So I think
at that point, I will say Omni should be a killer feature. It should be an easy pitch, as we talked
about earlier. It's the most rewarding place to trade by a mile. Some of the cheapest of execution,
zero fees, and then importantly, loss refunds, spread discounts, and all the other things to go
with tiers. I think it's going to really get people people super excited and that's the point at which you
know the gloves are coming off and we're scaling into the sunset so um it's uh it is the summer of
omni in my view not to be too cliche about it and uh i got the the devs locked in the dungeon they're
still shipping but you guys will see some of this over the next week or two and it's going to be
amazing give us your feedback yes always you guys know where to find us in Discord.
We're always keeping an eye on that.
And then, yeah, I think this has been a great progress update.
And we'll have another one for you in a couple weeks with our next Twitter space.
But thanks, everyone, for hanging out with us today. We appreciate it.
And yeah, like we've said, you can always find us in the Discord.
So we're there.
And yeah, on that note, we'll call it. Thanks, Lucas, for the time. Thanks, everyone, for joining. And we'll see you in the discord so we're there um and yeah on that note we'll call it thanks
lucas for the time thanks everyone for joining and we'll see you in the next one bye guys
