Ex Jane Street Veteran's Journey To Crypto | Thomas Uhm
🎯 Summary
Podcast Episode Summary: Ex Jane Street Veteran’s Journey To Crypto | Thomas Uhm
This 46-minute episode features Thomas Uhm, the new Chief Commercial Officer at the Gido Foundation, discussing his transition from the traditional finance (TradFi) giant Jane Street to the Solana DeFi infrastructure space, focusing heavily on institutional adoption and value capture in Web3.
1. Focus Area: The primary focus is the intersection of TradFi infrastructure expertise and the Solana DeFi ecosystem, specifically through the lens of the Gido Foundation. Key themes include institutional onboarding, the role of infrastructure providers (like market makers/Jito), and the structural differences between various investment wrappers (ETFs vs. corporate treasury plays).
2. Key Technical Insights:
- Infrastructure Analogy: Jito’s role in Solana is analogous to market makers at Jane Street: providing liquidity, risk warehousing, and bridging time gaps to ensure fair, orderly, and efficient markets, resulting in tighter spreads and better user experience for Solana participants.
- JitoSOL Scalability: The autonomous delegation of stake via smart contracts in JitoSOL suggests a much flatter decay curve for yield compared to other staking providers, mitigating concentration risk associated with individual validator reliance.
- Value Capture in Yield: Institutions scrutinize yield sources, differentiating between yield derived from structural efficiency/scale (sustainable) versus yield derived purely from taking on increased risk (less sustainable/scalable).
3. Market/Investment Angle:
- Institutional Barriers: Key hurdles for institutional adoption include domicile restrictions, fiduciary responsibility levels, and the degree of centralization in decision-making (decentralized structures require broader buy-in, slowing crypto adoption).
- Segmenting Institutions: Effective commercial strategy requires segmenting institutions into Buy Side (asset managers, RIAs), Sell Side (banks, brokers), and Market Architects (trading firms, custodians) as their value propositions differ significantly.
- ETFs vs. Treasury Plays: ETFs offer a regulated claim on the underlying asset basket with built-in protections (e.g., claim cannot go below asset value), whereas “MicroStrategy-style” leveraged treasury plays (using debt to buy crypto) represent a riskier, levered equity position junior to bondholders.
4. Notable Companies/People:
- Thomas Uhm: Former digital assets lead at Jane Street, now CCO at Gido Foundation.
- Gido Foundation: Focus on Solana infrastructure, staking, liquid staking, and re-staking.
- JitoBTC/JitoRock: Mentioned as a key product leveraging JitoRock’s decentralized custody network for Bitcoin exposure with yield on Solana.
- Cheyenne (Gido): Mentioned for providing an excellent interview on Gido’s proposition and value capture.
5. Regulatory/Policy Discussion: The discussion touched upon how US regulatory uncertainty (mentioned as a reason for scaling back Jane Street’s digital asset business in Q2 ‘23) influences institutional comfort levels, particularly regarding domicile and operational requirements. The structural differences between ETFs and corporate treasury holdings also imply different regulatory frameworks and investor protections.
6. Future Implications: The future success of Solana hinges on massive user base growth, and institutional capital is seen as a critical component of this expansion. Gido’s role is to build the necessary infrastructure and commercial framework to make Solana conducive to larger capital allocations and more complex applications.
7. Target Audience: This episode is highly valuable for Crypto/DeFi professionals, Infrastructure Builders, TradFi professionals looking to transition, and Institutional Investors seeking nuanced insights into Solana’s ecosystem and institutional onboarding challenges.
Comprehensive Narrative Arc:
Thomas Uhm details his journey from leading digital assets at Jane Street, where he experienced the scaling challenges and regulatory headwinds that led to a temporary pivot, to joining Gido to commercialize its core Solana infrastructure offerings. A humorous anecdote highlights how a Lightspeed founder survey, which ranked Gido as the most desirable employer, inadvertently led to his current role.
The core of the discussion centers on institutional readiness. Uhm breaks down the complex factors influencing institutional adoption—domicile, fiduciary duty, and decision-making centralization—and outlines Gido’s strategy to tailor its value proposition across Buy Side, Sell Side, and Market Architect segments. He draws a strong parallel between Jane Street’s role as a market infrastructure provider (generating value through tighter spreads and efficiency) and Jito’s role in stabilizing and optimizing the Solana network for users and validators.
A significant segment addresses value capture and revenue generation beyond simple spread capture (market making). Uhm argues that while market making generates daily cash flow, scaling requires expanding risk profiles, analogous to how DeFi protocols must look beyond headline yield to sustainable sources derived from structural efficiency rather than concentrated risk.
Finally, the conversation contrasts regulated investment wrappers: ETFs offer safety and a direct claim on assets, whereas MicroStrategy-style leveraged treasury plays offer higher beta but expose equity holders to junior risk relative to debt financing costs. Uhm concludes that genuine institutional interest requires a clearly articulated investment thesis for the underlying asset (like Solana) that goes beyond simple price speculation.
🏢 Companies Mentioned
💬 Key Insights
"if the way that they are getting paid is via a token unlock, as opposed to making sensible markets, then it feels like a lot of these arrangements are actually not incentivizing valuable market-making services."
"there is a point at which you bootstrap liquidity in a way that builds something, and there are short-term incentives that just at some point fall away. And when the incentives fall away, then you're just left with architecture."
"I think fundamentally when it comes to Solana, like the idea of a high-bandwidth or high-throughput chain that has very, very low costs, that is responsive enough to the users that there's active upgrades that are being done... I think makes it a very compelling case for institutions."
"how your entitlement increases every day but rewards are paid out at the end of every epoch, like how does that change the way that you price these things? Now, what is the forward curve of JitoSOL versus the forward curve of Solana, and can you do some sort of enhanced basis trade which includes like embedded call on future network activity that doesn't exist if you're doing like a vanilla basis trade of long SOL and in some future?"
"I think everybody is very clearly on board with the idea that yield-bearing collateral is just a far superior way of posting margin or posting collateral than just using cash."
"the fact that it's essentially a continuously compounded total return product means that it has a very different kind of forward curve and just like a linearly increasing, there's much more convexity in the forward curve of JitoSOL there."