Ever since the announcement, there's been some interesting ideas shared about how Nvidia is functioning like a central bank of the AI industrial/infra build out. One main criticism is that there's increasing concentration risk. A liquid and robust derivatives market would do a lot to mitigate concentration risk. It's fascinating to see in real time because similar stories were prominent case studies from my formal education. The GPU residual value floor reminds me of similar terms that are common in the airline industry, big ag heavy machinery, and the auto industry. There are fair criticisms of circular financing, concentration risk. This is ultimately why a third party exchange like The AI Exchange would be a more sustainable way to legitimize chips and make AI infra an investible asset class. It would also give Nvidia an opportunity to offset these types of risks.

The top trading firms in compute markets are going to be firms that are already leasing GPU compute, training their own models, managing their own infra. It's an incredibly young market with no way to warehouse risk. Having skin is the only way to get the invaluable experience with the nuances of the market as it's developing. Firms that hesitate will be too far behind considering that this experience is the byproduct of training bespoke models.

If you’ve only traded perps, there’s a lot about traditional market structure that doesn't make intuitive sense. The best example is market data fees. I will never understand the rationale behind making customers pay to see the price. And when you look at other key differences, it certainly feels like the advantages are tilted towards the big incumbents (colocation, infra costs). At the same time, there's plenty of things that the digital asset industry was probably forced to do initially, but probably should have dropped a long time ago. Even culturally, there's still a PvP mentality that is focused more on PnL and winning than price discovery and healthy markets. Auto-liquidation is a blunt instrument that may solve the current problem but often creates more down the line. The industry has trained it's users to farm airdrops and points which incentivizes wash trading, artificially tight spreads, winner's curse, and on-chain chicanery. Transparent margin access is good, but under no circumstances does someone need 100x leverage. For all of the criticisms of Tradfi, some of what crypto does is pretty insane. The primary purpose of any exchange is price discovery. Increasing market participants is the only way to meaningfully improve price discovery. At AX, our RWA perp exchange, we tried a hybrid approach to solve some of the key problems that we think are keeping market participants on the sidelines. AX is most similar to a modern CEX with the more innovative features that everyone loves: stable coin settlement, integrated exchange+clearing house, free market data and open apis. However we're more aligned to Tradfi in a few key areas: 1. No auto-liquidation for institutional accounts - for many trading firms, auto-liquidation is a complete non-starter. The thought of getting auto-liquidated on a Sunday night when there's no liquidity, only for prices rebound at market open, is completely unpalatable. 2. Fully licensed and regulated in every jurisdiction we operate -- no exceptions. This is the only way to have staying power. Sometimes experience is the best teacher. 3. 3rd party, non-manipulatable data sources from the most liquid spot markets (where possible) for funding calculations - RWAs are currently a speculator driven derivative that sits on top of extremely liquid, economically critical markets. It seems like a missed opportunity to not take advantage of that. Even the threat of something that is "decentralized in name only" will dampen liquidity over the long haul. There's also many instances of circular contract design which creates more opportunities for manipulation. Architect tries to use the price you'd look up if you thought your screen was wrong. If there's not 100% trust in the benchmark price, derivative liquidity will fail to grow. 4. Uniform fees, latency, and access to information - There's so much paranoia in digital assets that other market makers have faster data feeds, lower fees, faster notifications from a friend at the exchange they've known for years. In tradfi you know what the advantages cost, even if you cannot afford it. But in crypto you don't know if or what the advantages are. Every AX MM has the same fee schedule, the same latency profile, the same incentive programs, and we use automated messaging bots for new listings, downtime, and other alerts. We're hoping that some of these minor tweaks provide better and more sustainable order book conditions. Ultimately we want people to trust that Architect is a good steward of the capital and liquidity that customers post to the exchange. And if that gets us the marginal perp trader, then our prices and spreads will improve. Everything else is downstream from that. One day before we know it, perpetual futures markets will be the preeminent markets for price discovery in RWAs. But liquidity doesn't move overnight! If you're interested in checking it out, onboard at We're hoping to bring as many of these innovations--including GPU Compute price discovery--to our upcoming US-regulated exchange, the AI Exchange. Pre-onboard at