The JDB Report is diving deep into crypto market structure to understand why things went haywire on October 10, causing $19 billion in liquidations of positions that should have been solvent. Read our summary here.
Is this it? Is this just the way things will always be in crypto markets? Or should the industry move quickly to make changes – or let regulators act first? Adam Morgan McCarthy is a Paris-based analyst at Kaiko Research. He makes the unpopular argument that the flash crash makes clear the need for a regulatory response.
Related interviews: Joshua Tobkin of Supra, on oracles.
Brian Norman and David Qian of Auros, on market makers.
Timecodes:
0:00 - Adam Morgan McCarthy, Kaiko Research
1:04 - Dissecting the crash and market immaturities
3:52 - Use of altcoins as collateral and how they get priced
7:09 - Who has the capacity and incentives to drive improvements, current initiatives, lack of regulation around pricing and transparency especially on perpetual futures
10:30 - Leverage’s role and need to regulate systemic risks
12:58 - How to further connect onchain finance and TradFi incrementally not dramatically
15:08 - Explaining Tether’s trading premium during the crash and implications for large stablecoins
17:00 - Fragmentation of liquidity and possibilities for unifying prices across venues
20:05 - TradFi models that might be relevant
22:18 - Regulatory arbitrage here to stay
