Flirting with Models Thao Tran – Market Making Illiquid, Non-Fungible Assets (S7E14)
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Feb 3, 2025 Thao Tran, Co-founding Partner at Vamient Capital, dives into the intriguing world of illiquid, non-fungible assets like NFTs and cryptocurrencies. She explores how the NFT marketplace has evolved over time and shares insights on managing inventory risk. Thao highlights the shift in crypto dynamics post-FTX and the importance of decentralized exchanges. She also discusses how on-chain transparency and metrics are reshaping trading strategies, emphasizing the need for traders to adapt in this rapidly changing landscape.
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Managing NFT Inventory Risk
- Managing inventory risk in NFTs is challenging due to limited hedging options.
- Focus on selling non-rare NFTs at good prices to cover your inventory costs.
NFT Spread Management
- Adjust NFT spreads based on volume and price momentum.
- Quote tighter spreads during high volume, and wider spreads as volume decreases.
NFT Exchange Incentives
- New NFT exchanges like LooksRare and Blur offered token incentives for trading.
- Thao's firm chose not to factor these incentives into their quoting strategies.