From Quantitative Funds to On-Chain Asset Management: A PhD Economist's Journey in Web3 Entrepreneurship

Recently, an economics PhD shared his career transition from traditional quantitative funds to Web3 entrepreneurship.

This doctor graduated from the University of Oxford and the University of Bristol, obtained a postdoctoral degree from Oxford, was formerly a partner at a certain UK exchange, and is currently a co-founder of a certain quantitative platform. His academic background is mainly in econometrics and quantitative fields, and during his doctoral studies, he researched "transaction cost theory."

He believes that the essence of Web3 is to disrupt traditional economic models and significantly reduce transaction costs, especially at the institutional cost level. However, this process will be extremely lengthy, as it involves a conflict between the traditional and the future, and institutional evolution takes time.

Speaking of the opportunity for transformation, he mentioned that when he came into contact with cryptocurrency in 2016, Satoshi Nakamoto's Bitcoin white paper completely overturned his understanding of traditional economics. As a scholar studying transaction costs and monetary theory, this impact solidified his decision to enter the Web3 space.

From traditional quant to Web3 entrepreneurship, he stated that there is a strong correlation between academic research, investment banking practices, and entrepreneurship. However, as the scale of the enterprise expands, decision-makers must be fully committed, making it difficult to balance other responsibilities.

When discussing how to balance risk and return, he emphasized two main considerations: first, the "survival issue," which is to control baseline risk; second, the "incremental issue," which is to create more stable cash flow to withstand black swan risks. He believes that in the current highly dynamic and nonlinear market environment, it is very difficult to accurately predict medium- to long-term trends.

Regarding future plans, he stated that he is promoting deep transformation and integration of his two institutions. On one hand, they are launching financial products that leverage Hong Kong's asset management advantages; on the other hand, they are supporting the tokenization and issuance of physical assets. In the long run, they hope to bridge the trading channels between cryptocurrencies and traditional assets.

In terms of risk control, he emphasized the importance of the underlying technology and matching strategies according to customer risk preferences. As for capital management, they adhere to no leverage, with futures at most 1x, and will never allow customers to be liquidated.

When discussing his insights on entrepreneurship, he stated that the core of starting a business is to help people understand themselves, learn humility and integrity. At the same time, one should adhere to long-termism and not forget their original intentions. He believes that being able to do what you love makes life worthwhile.

Finally, he suggested adhering to first principles, believing in mathematics and physics, and not being overly reliant on economic models. He believes that 95% of economic models are based on unfounded assumptions, human behavior is difficult to predict accurately, and models can easily fail.