Editor of this issue | Colin Wu
Editor of this issue | Colin Wu
With more than 2 billion US dollars in mining funds, controlling platform coins worth tens of billions, and Alameda Research, which has invested in a large number of projects, SAM can control assets exceeding tens of billions. But can these assets get out of the way when the bear market comes?
At the beginning of April, FTX disclosed that it named the Miami Arena with a large sum of 135 million US dollars. This news did not cause much sensation, but FTX boss Sam Bankman-Fried (hereinafter referred to as SBF), has been relying on his legendary wealth myth , and the iconic explosive head, frequently created various news in the circle, for example, he claimed in February that his personal net worth had reached an astonishing $10 billion. On the list of the world's richest people just released by Forbes, SBF, which has only been in the currency circle for three years, ranks 274th with $87 in assets, which is almost the same as Zong Qinghou's wealth scale. (The data in this article are all before April 14)
Not only that, judging from the crazy counterfeit market in the past two months, SBF's wealth territory has been greatly expanded, which may have far exceeded the figures disclosed by the media before.
According to the exposed address, in February, Sam invested US$1.4 billion in mining on 1inch and SushiSwap. The main fund pool is ETH/WETH+ stable currency, and the annualized rate of return ranges from 10% to 70%. It is speculated that Sam's single-day mining income can reach 2 million knives per day. By April, the number of assets on this address soared to 2.3 billion US dollars, of which the assets on the Ethereum chain were 500 million US dollars, and there were as many as 1.8 billion US dollars of encrypted assets on the Binance chain. These funds are mainly in Venus, Lending and mining are carried out on the three major projects of MDEX and Belt.fi. In just two months, SBF's assets have increased by nearly US$1 billion on this address alone.
Since liquidity mining became popular last summer, the ferocity of Sam mining has been well-known in the circle. Shenyu once ridiculed SBF as a "vampire". Because of the huge amount of mining funds, APY dropped sharply wherever it went. All "shivering".
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Earn the first pot of gold through cross-exchange arbitrage
As a former quantitative trader on Wall Street, SBF is not a hoarder who entered the circle early. According to stories reported by major media, SBF's first pot of gold mainly comes from cross-exchange arbitrage. At the beginning of 2018, SBF found that there was a price difference between exchanges in different countries. Among them, the bitcoin on the South Korean exchange had a premium of about 30% compared with the US market. However, due to foreign exchange control, if the bitcoin purchased in the U.S. market is sold on a Korean exchange, it is difficult to exchange the Korean won for the U.S. dollar.
Therefore, SBF set its sights on Japan, a country that also has a price difference between bitcoins, but has canceled foreign exchange controls in name. During this period, the Bitcoin premium in Japan lasted for a month, and the daily arbitrage income could reach 25 million U.S. dollars. If operating costs were not considered, SBF’s first pot of gold income reached as much as 750 million U.S. dollars.
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Operate the exchange to obtain daily cash flow
FTX is an encrypted derivatives exchange managed by SBF. According to the official website data, the current 24-hour transaction volume of FTX is about 7.5 billion US dollars, of which BTC and ETH account for more than 50% of the transaction volume. FTX's Maker Fee and Taker Fee are roughly between 0-0.07%. If calculated according to the median of 0.035%, the weekly fee income can reach 14 million US dollars. According to this data calculation, under the net interest rate of 60%, FTX's annual net profit can reach 460 million US dollars.
This data is also close to the income reversed by the weekly burning amount of the platform currency FTT. FTX will use 33% of the service fee, 10% of the social income and 5% of other income to destroy FTT. According to the data released on April 8, 3.8483 million USD worth of FTT was officially destroyed that week. Assuming that all the burned amount comes from FTX, then the weekly income of FTX is estimated to be approximately 11.63 million USD.
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Accumulate capital through platform currency
In addition to issuing the platform currency FTT in the name of its own exchange, SBF’s most well-known identities include the Serum consultant and the owner of SushiSwap’s time lock control, and the issuance of FTT and Serum is personally led by SBF. The total issuance of FTT is 350 million pieces, of which 175 million pieces belong to the team, which is worth tens of billions of dollars based on the currency price of 57 US dollars.
In addition, the Serum project is very tightly bound to FTT. At the beginning of Serum's launch, 5% of Serum's native tokens were allocated to FTT holders, and the total amount of SRM was 10 billion, which means that the SBF team can get at least $3.5 billion worth of SRM by holding FTT . At the same time, 20% of the total amount of SRM will be allocated to the Serum team and consultants. SBF, as a project consultant, is also behind this $14 billion fund.
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Layout ecology through encrypted asset management
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(Top 25 Traders, data source: BitMex)
Through the SBF fortune-making code we compiled, we can see that it is not easy for anyone to copy this path. The accumulation of SBF's original capital mainly comes from the following points: looking for cross-border trading opportunities, issuing platform currency, and having top-notch trading strategies. The magic of SBF lies in its wide industrial layout and strong execution ability, which is beyond ordinary people. Therefore, it took only 3 years to complete the journey that most people on the Forbes list took decades to complete.
However, SBF has also mentioned that most of his holdings are illiquid. I don’t know if SBF can survive the bear market, or is it just a short-lived “legend” in the current bull market cycle?
