Update: I assume the majority of SBF's net worth is from FTX not Alameda, so my question is where does FTX's money come from. I assume it's from wrecking retail traders.
Coinbase did a direct listing of its shares at a $100bn valuation, with extremely low revenue numbers, which are still great numbers.
Anyone that:
A) Has similar volume
B) Has similar growth
C) Offers more ways of accruing value - such as perpetuals
D) Retains greater ownership of their own company
is simply going to have a lot of money. Its not that mysterious. Keeping a few $billion in crypto provides many opportunities for the same price appreciation as everyone else.
Alameda is also known as being quite a shark when it comes to deal making, if you don't get something in writing they are going to do the most profitable thing at you/your community's expense as soon as the opportunity arises.
Their OTC desk also likely has more volume than their lit exchange exchange, and OTC desks enjoy wider spreads in the trades.
And remember, they have nonstop trading sessions, 24/7, so more than 3x as many sessions as a stock or options exchange, and slightly more than futures and currency exchanges.
Basically what happens is that they grow soooo fast that they arent able to handle customer support, cant list new assets that customers want fast enough, that even institutions want.
So then the next startup crypto exchange lists the newly desired assets and attracts the whole network and people fearing missing out.
And it keeps going. Thats the primary way they compete. There is a bunch of stuff behind the scenes for market depth and liquidity, but it reduces the need for exchanges to compete with each other on liquidity so its not really a factor just like trading commissions are really how they compete.
Boom town.
Liquidations, not margin calls, are where the money is. And they definitely do have their own special fees.
https://www.coindesk.com/business/2021/03/16/80m-deal-gone-w...
Most others do not because voicing anything means no exchange listing, no potential of support from Alameda/FTX and their partners
Many token founders are fine with it for the payday (like in Ren/Republic protocol) while all the tokens get dumped on their community
It is very common in the crypto exchange/advisor space for contractual arrangements to go “I’ll buy your illiquid treasury and wont immediately sell, trust me bro” and then they sell once the partnership announcement creates a bunch of fomo and liquidity to sell into, Alameda has the reputation of being that way. And then when confronted they say “it wasnt in the contract and there was no vesting smart contract to prevent selling either, we’re not in the wrong”
Not the most community collaborative to say the least, its very lucrative for them
[Edit: Typo]
You hang out in the muck, folks are going to assume you have some on you.
I'm not saying they do necessarily, just that that's where the assumption more than likely comes from.
