“After all, it was the nature of twentieth-century capitalism that everyone should scam everyone, and he who scammed the most ultimately won the game. On that basis, I was the undefeated world champ.”
– Jordan Belfort.
The famous line above from The Wolf of Wall Street, a fiction movie, could not be more accurate if you have watched the fifth episode of The Problem with Jon Stewart: Stock Market.
Our old Jon started the show by telling the modern version of the David v.s. Goliath story: Redditors as David, the incumbent financial institutions like CITADEL Goliath. He dissected how Robinhood earns hundreds of millions of dollars by selling users’ orders to CITADEL, a market maker. Then market makers like CITADEL purchase “order flow” and slip orders into the “dark pools,” the actual name, which “are private exchanges where the big boys trade stocks in the dark.”
Well, how dark are these pools? It turns out the payment for order flow is among “the MOST TRANSPARENT, WELL-REGULATED, AND STRAIGHT FROWARD part of American stock market. There’s a whole other backroom of derivatives and swaps and less transparent transactions, subsidized by public union pension funds,” to which Joe concluded: “It’s unsustainable”!
Being a kind and responsible person who want to build a better world, you may ask: why the complexity? In the episode’s panel section, Dave Lauer, the founder of Urvin.finance and INVESTOR BILL OF RIGHTS, explained that the complexity is purposeful to lead to inequality and exploitation for a few big firms to take advantage of the complexity.
In other words, the stock market is meant to be confusing so that the insiders can exploit it.
The burden of vested interests and status quo sparked Jon’s outcry like:
How to fix the problem?
Transparency Generates Equity
The first request by the INVESTOR BILL OF RIGHTS is: we want transparency.
Investors should be able to gather all important information regarding their brokers’ practices, how their securities are held, execution and other costs, conflicts-of-interest and trading activity.
It is hard to push for the change in the real world’s stock market. However, transparency is the intrinsic principle and attribute of DeFi. All the transaction data are there for scrutinization, as long as you know where to find them and how to interpret them.
Consistent with the transparency request of the INVESTOR BILL OF RIGHTS, aligning the same goal with projects like flashbots, by just releasing the Liquidity Pool details feature, EigenPhi provides comprehensive information regarding DeFi’s MEV and arbitrages. As a result, user can hop around amid the three linchpins of DeFi deals: liquidity pools, contracts, and transactions, all of which constitutes the fundamental structures of DeFi, laying bare broker’s operations and their cost and profit framework.
Let us walk through the process.
Tour Among the Cornerstones
We can open the №1 most frequently used pool of the last seven days on EigenPhi’s Frequently Used Pools.
There are three sections on the page. The first is Liquidity Pool Overview, which shows the tokens pair and the remaining tokens.
The following section is the Arbitrage Transaction Leaderboard. The top 10 most profitable transactions here happened in the selected period in the top right corner of the page. The profit and cost structures and the types of this arbitrage are in the same row of the transaction.
Sometimes we would wonder what kind of MEV is occurring now in this pool. Latest Arbitrage Transaction section delivers the data needed.
Right beside the transaction columns in the last two sections are the contracts. Clicking on the transaction address will open the detail page showing the Token Flow Chart of it, in which comment is welcome.
You can also open the contract detail page by clicking the contract address. A quick tour of EigenPhi is here for you to explore.
Above all of these, our data engineering team is using EigenPhi’s unique algorithms to connect the liquidity pools with protocols and projects. We will share the result in next to no time.
To all intents and purposes, we are hammering away at crystallizing the data and information of DeFi to dedicate the wisdom of it to all, to get the guys like Ken Griffin, the CEO of CITADEL, to acknowledge the disruptive innovation of cryptocurrency, eventually, their inevitable destiny of accountability.
“Greed is good” is the most famous line of Gordon Gekko in Wall Street. The less known line, which becomes more and more significant in the DeFi era, is:
The most valuable commodity I know of is information.
You can watch the “dark pools” part of The Problem with Jon Steward here on Youtube.
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