2/ Disclaimer: This is just our experience and not an endorsement of any of these exchanges. I'm an investor in some of these exchanges, but was not paid to write any of this.

3/ First up, Binance: Not much to be said. If you want to trade at scale, start here. If your strategy works on Binance, it has a great chance of generalizing to other exchanges Binance is well run despite allegations and lack of regulatory clarity. Volume speaks for itself

4/ OKX: This exchange has been through some ups and downs. From some of the worst margining logic and clawbacks to a 3 month withdrawal freeze, gotta say they retain their Chinese retail users well. Pretty interesting infra setup, and can definitely find some edge there:

5/ Coinbase: A tough exchange and the closest to tradfi in terms of infrastructure. Fee tiers are aggressively differentiated. They have the most respected and legit compliance. Retail flow during 2021 mass listings was legendary and rivaled Binance at times.

6/ These days I would not recommend crypto natives start here, as the necessary infrastructure investments are massive. However, if you're coming from a tradfi background, maybe things port over easily. We analyzed the infrastructure and latency in depth here:

7/ Kraken: One of the most respected operations in the space. They have a consistent retail base despite not competing on fees. Only place where you can print money with 10bps taker fee (the best) throughout the bull market. They have been piloting some MM stuff finally

8/ Places like Kraken's low volume can be deceptive, as the net fee per notional traded can be an order of magnitude higher than somewhere like Binance with smaller taker fees and maker rebates. Basically, exchange revenue is a better predictor of retail flow than raw volume

9/ Huobi: Not super relevant these days, but including it here as it truly rivaled Binance in retail flow back in the day. The Chinese government crackdown basically sank it overnight. Wouldn't recommend it now, but keep your eyes peeled for where retail in Asia goes

10/ Bybit: Relatively legit and pretty good retail flow. Basically like a mini-Binance. Perhaps they captured some Chinese flow exodus from Huobi like OKX. Their relative dominance in retail flow has also steadily increased, so could be worth additional infra investment now.

11/ FTX: We never traded here. Including it as another lesson to follow your gut. My mental calculation was 10% probability Alameda sees and inspects orders of top clients. Risk of alpha decay across all venues just didn't make sense. We were right, though never expected fraud

12/ Binance US: You mostly hear about this in allegations with CZ. However it was a hidden gem during the bull market. The best trick was that they mirrored the .com infra, so all the tricks carried over. Cutting out all the competition means insane market share for a first mover

13/ It's far less juicy now, as US crypto woes have crushed retail appetite. However, the lesson here is similar to Huobi above: when the mania starts again, look everywhere for outsized alpha. Bull markets are for scaling horizontally. You can sleep when the dust settles

14/ Finally, note that there are many absolute garbage exchanges. Bitget was huge with copy trading for example, but if you try doing HFT you quickly notice their matching engine is dishonest. Does not respect place in queue, clearly just B-Booking through their internal desk

15/ There are many exchanges like this, to varying degrees of dishonesty. Once you confirm it, stay a mile away. The key is to build your HFT infra in a way to quickly onboard new exchanges so that a few duds on the long tails are not crippling.

16/ To summarize, go big and then scale horizontally, or start small and find niche infra quirks. The best tail exchange opportunities will get competed away quickly, so being early is disproportionately advantageous.

17/ Speaking of which, we are building one such tail opportunity @HyperliquidX (closed alpha) We've built the tech for Binance, scalable but fully decentralized. Python SDK hot off the presses, including an end-to-end sample strategy. More coming soon. https://github.com/hyperliquid...

@chameleon_jeff @HyperliquidX This thread is legit amazing. Bravo @threadreaderapp unroll

@chameleon_jeff @HyperliquidX Coded sph