Conversation

Breaking news!

runs Index products & also acts as the market maker. Anyone know how Index's work? HINT: If a customer sells the DeFi Index, FTX has to sell the underlying or something similar to beta-hedge. You have to borrow tokens to sell if you don't have them.

Quote Tweet

Red Li

@redtheminer

Oct 7, 2020

As per cryptoapprentice, @SBF_Alameda deposit lots of $ftt $srm on $cream as collateral to borrow $uni $yfi $crv and dump on binance.

Replying to

and

FTX has to sell the underlying or Alameda?

Replying to

and

whatever MM takes positions -- wouldn't be FTX itself, could be Alameda

5:35 PM · Oct 7, 2020Twitter Web App

Replying to

Is that allowed in legacy markets?

Replying to

and

Right, so just wondering if Jeff is conflating FTX and Alameda or if there's some other play here. "If a customer sells the DeFi Index, FTX has to sell the underlying or something similar to beta-hedge."

Replying to

and

Poor choice of words by me. Sam's clarification is correct. If you are a market maker, you are constantly buying/selling to keep betas in check. If Alameda is dumping certain DeFi tokens, very likely it's because they are getting hit on those tokens or other similar tokens.