What is capital efficiency?

For such a commonly discussed concept, capital efficiency is poorly defined, particularly for trading purposes in cryptocurrency. Traditionally, capital efficiency is the ratio of how much revenue is being generated by a company’s spending. Let’s explore some approaches to measure it for our arbitrage trading friends. (although we appreciate the different schools of thought!)

Let’s measure it.

We’ll subscribe to a measurement of capital efficiency across two metrics for now:

  1. A firm’s buying power, averaged over time, as a percentage of their AUM.
  2. A firm’s ability to rapidly respond to critical market events.


About This Content

Floating Point Group’s research team endeavors to bring quantitative insights to our institutional audience in short, easily communicable pieces of written content. Questions you’d like examined or questions about this article and its associated data can be sent to research@floating.group

Published by Kevin March and Natalia Gadjieva, January 11th, 2021

Introduction

SushiSwap’s short history has been nothing but dramatic since its fork from UniSwap on August 26th, 2020. With the question of “How do protocol-level changes affect market dynamics,” Floating Point Group Research examined all major protocol events since SUSHI’s listing on Binance and the beginning of…


By: Floating Point Group’s Merav Shor (VP Legal & Compliance) and Kevin March (Co-founder, Head of Business Development).

Updated: 12:30 PM ET, Thur October 15, 2020

Questions? Content to add? Thoughts? Please send them to press@floating.group and if we include them, we will add you as a collaborator.

CFTC Chairman Heath Tarbert speaking to Coindesk’s Michael Casey via Zoom

CFTC Chairman, Heath Tarbert, talked about ETH, Defi, and staking at Coindesk’s “Invest: Ethereum Economy”


A reflection of our time in MIT’s deltaV accelerator

Yesterday I had the pleasure of participating, on behalf of Floating Point Group, in the demo day put on by MIT’s Martin Trust Center for its summer accelerator, deltaV.

It was incredible.

(Watch the 5 minute pitch here starting at 2:09:20)

The breadth of ideas, talent, and success on display was humbling. Energy flowed from every corner of the building, even as the 1000+ crowd that had packed into the auditorium sat with bated breath between their cheers and applause. Every speaker that pitched their company was suited for a TED talk and was showered with thunderous approval from the…

Kevin March

Founder at Floating Point Group. NY metro area. Will write about quant trading, magic internet money, startups, and dogs.

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