Loris

been a while - dinnerbot roulette - iara, tonight Thurs Oct 29, party of 2 @ 7:30pm, dining room free of charge. if you want it, please DM i can't make it (i'm under the weather). probably the buzziest new restaurant opening in NYC right now brazilian, infatuation hit list, chef is theodora alum hit me up

gossip (read) priority fees on hyperliquid are broken currently the team that is benefitting the most is wintermute (insert fist shaking red emoji guy meme) this is not publicly known but can be determined with certainty by mapping out transfers to labeled wallets from the top winner of the gossip priority fee auctions (they have won 79% of the slot 0 auctions in the past 24h) tldr; wahhh wahhhh wahhh hl gossip priority, not fair. add more slots or scrap the gossip auction my proposed solution: 1) increase gossip priority to 20 equal-priority slots 2) make it so winning an auction slot grants IP whitelisting to a foundation-run peering slot i think this basically solves it and would likely *increase* total gossip priority fees --- some context the purported intention, as stated in the docs, is to "reduce the need for market makers to hyper-optimize their infrastructure to remain competitive" if you win the gossip auction slot, you get order book / node data 50ms (!!) faster than anyone else. yes. one IP, across the *entire network*, gets the feeds 50ms faster. it's the whole ballgame so in theory you could just buy the faster data slot instead of spending 10s of thousands monthly on high octane ec2 instances and [insert hft magic] or you can do BOTH, which is what wintermute is doing so despite the stated intentions it does the exact opposite and gives 1 wallet a dominant advantage over every other participant further reducing the democratization of this mechanism is the fact that, practically speaking, you can only use a won gossip slot if you have a direct peering relationship with the foundation node. multiple providers we work with couldn’t pass gossip priority benefits through to us without slowing their other peers (all independently confirmed this behavior - strange design) and to get a foundation peering you to do 0.5% of the 14d HL maker volume (we don't quite meet this threshold so our application was rejected) as well as stake 10,000 HYPE ($780,000 here), or be like, a node service provider --- without revealing too much i can say with 100% certainty that wintermute has maxed out BOTH the infrastructure optimization + expenditure AND is monopolizing the gossip fee auction they're spending on average $26,000 *per day* ($10M/yr) to win this auction so rn they're just eating everyone else's lunch and the only way that approach is economic is if you are MM at the scale that they are, which only a handful of wallets are doing

the problem with products where the farm is the product is they die when the arb goes away

within 30 seconds of opening a support ticket on hyperliquid discord i had 17 support agents ready to help! everyone is so darn friendly around here splendid hospitality

boy math: liquid personal net worth: $859 PAPER indicative price $0.028 PAPER balance, my wallet: 100,000,000 probability PAPER becomes transferrable some day: 12% EV-adjusted PNW: $336,859

funny how every serious quant trader type on the tl quickly identified / agreed upon serious fatal "unresolved vectors" (sheesh) and set a p(protocol death) = 1 for papertrade several variations on the thinking but it boils down to the fact that you can't have a pool of LP money being the counterparty providing 0 slippage trading at large size the pool will get arbed to zero eventually. the current footgun likely means usage dwindles rapidly but even if PAPER was transferrable i feel strongly it was doomed from the outset and oh, btw even the non-transferability of PAPER does NOT guarantee someone doesn't make a synthetic perp or prediction market that would benefit an attacker enough to establish the mechanic papertrade is currently trying to avoid anyway --- a reasonable assumption in any serious trading (and especially shark-infested quant trading) is if you give someone an edge, they will exploit to the maximum extent possible until all of the money has been transferred from your wallet into theirs it might not happen today, or tomorrow, but it will happen oi caps were never a realistic solution, although that's what jez DMd me they were implementing (right after he unfollowed me for posting about the protocol design flaw) whack-a-mole efforts and wallet blacklisting also not a solution and neither of those is sybil resistant there is no solution other than a fundamental redesign of the protocol. but if you can't provide massive size at 0 slippage, you don't get the cartoonishly large metrics, and the hairbrained experiment is less enticing to avg retail participant --- and yet here we are with shocked pikachu faces and $2,000 trousers sucks that people are getting hurt again. and it shouldn't be on them to understand edge case mechanics that put their funds at risk --- ps this is the 2nd time i've pointed out an arb embedded in a mechanism designed by jez, the 1st being the multi-million dollar Lighter funding rate rebate where funding losses got refunded the arb was to open long+short legs on the same asset on separate accounts and collect risk-free funding loss refunds on the losing leg, delta neutral. know 1 party who made 6 figures on this!