The Agentic Era of Finance: Co-Invest and Beyond

Transcript

It's a pleasure to be here. It's always nice to be in Singapore again. I'm in the exact same stage as last year at around like the same time. I'm Franklin, CEO of Liquid, and today I'm super excited to talk about Liquid co-invest and beyond. Does anyone know who this guy is? Anyone? Come on, is Does anyone know who this is? This is Adam Smith, the founder of modern capitalism.

He wrote The Wealth of Nations, which is widely viewed as one of the greatest works of Western civilization. Now, we all know the word capitalism, but what is capitalism really? Capitalism is the idea that the invisible hand of the market finds the optimal allocation of resources in the economy. Now, this seems obvious to many, but before this I was actually a mathematician by training. And that This was a very strange concept to me. In math, it's really whoever has the best idea wins. It's not who has the most money or whatever else.

But it turns out in the world, if you have an idea but no capital, it stays like that. It's just an idea. It's never anything more. Capital is incredibly important. It determines which founders get backed, what gets invented, and what infrastructure gets built. It doesn't have to be this way. There are things like in a command economy where everything is allocated by one central planner. But the idea of capitalism is that this produces the best possible outcomes for the world.

Now, that seems like a great idea, but does it always happen? There's one thing that complicates this. It's people. People often make deeply irrational decisions. If there's a place with an optimal strategy and an irrational decision, people can often be reliably counted on to choose the irrational decision. If people didn't make irrational decisions, capitalism would be perfect, but instead, it's slightly flawed. Fundamentally, the reason why capitalism doesn't always work is because everything runs on asymmetric information.

I think it's very clear and very easy to explain to crypto people why this is. An influencer might shill a meme coin and then dump on their followers. A person very close to me was actually scammed of a million dollars. A scammer contacted their grandma and said, "You need to wire some money here, or else your grandson is going to disappear." There's things like insider trading. Someone is told that some merger is happening, and then someone makes a trade directly on top of it. Now, some of this is legal.

Some of it is illegal. But they all have one thing in common. Someone knows something that you don't. In finance, for better or worse, the money always goes from those with less sophistication to those with more sophistication. The current market dynamics, I think, really epitomize this. Market makers have better data, better intelligence, and better execution than almost any retail trader. This leads to higher fees, slippage, and generally involves in the market makers making a lot of money and the retail not having a lot of money at all.

What's interesting here is that the slide show could just end here, and you could be like, "Oh, yeah, this is just how things are." But that would be a very boring talk. Instead, I think AI can flip the script. As you guys know, AI has solved a tremendous amount of great problems unknown to man as of recently. All these math problems, the Navier-Stokes problem, Claude's mathematical capabilities, opening AI earning a gold medal at the IMO. These show that AI in many ways is much stronger than people are at cognitive abilities. I used to work at Two Sigma, one of the largest quant funds in the world.

And one of the things we believed was that we were really good at math. So, we were always going to beat everyone. But that's different now. You could clearly see that AI was getting better and better at math and soon it would overtake people. That's when I left Two Sigma because I thought there'd be no way we could outcompete people in the future. Like, you everyone would have AI and we'd all be equally smart. These funds used to be able to hire the best mathematicians in the world. And you probably couldn't hire the best mathematicians in the world.

But you use the same AI that they all do. And that gives you a chance to level the playing field. We thought about this idea last April. It was April, we were thinking about, you know, Bitcoin was down and we were sort of thinking about where the future of AI was going to lead us. And I got really excited about this idea of the singularity of capitalism. All of finance is just people with more information taking money from people with less information. But suddenly with AI, it seemed like there was a real chance to change that. With AI, somehow everyone would be roughly equally smart cuz no matter how smart you are, you aren't smarter than AI.

And I thought that was very powerful. And I thought that could lead to a singularity of capitalism. For those of you who are familiar with cosmology, a singularity is a point of no return. Once you go through a singularity, there's no way to go back. You go in and everything beyond there is completely unpredictable from what comes before. We're starting to see this in many fields like coding. And I think trading is about to hit that moment as well. Liquid is already building this vision at scale. We have We have 70,000 plus users. These are actually old slides, we're now at 75,000. We have users in 170 countries.

We process $5 of trading volume and we've raised over $26 million to build this vision. Liquid lets you trade anything, anytime, anyhow. Using Liquid, you can trade stocks, pre-IPO instruments, indices, commodities, FX, crypto, and prediction markets. It lets you trade them 24/7 with markets that never close, and it lets you trade anyhow. Yeah, we support up to 50x max leverage across all of our markets. On the AI front, we built Co-invest, the first ever way to trade directly through AI assistants like Claude and ChatGPT.

Furthermore, it's completely free. Via official partnerships with OpenAI and SpaceX, we have first-party integrations inside of ChatGPT and Grok Bot. For example, if you go to ChatGPT right now or Grok Bot and say, "Install Co-invest," you can instantly start using Co-invest inside your ChatGPT or your Grok Bot. We're very proud of these collaborations. They took many months to come to fruition, but we truly believe that if AI is going to let everyone make superpowered financial decisions, we should put the financial decisions exactly where people already use their AI, in ChatGPT and Grok Bot.

Furthermore, our platform works with Claude, Meta Muse, SMS, and Gemini. It's been really amazing watching Co-invest come to fruition. It took us about 3 months for Co-invest to reach 1 million tool calls. That's like messages sent to Co-invest. But as of recently, we found that every 3 days, Co-invest is invoked millions of times. This has been super exciting to us, and we're really excited to be furthering the mission that everyone should be able to use superintelligence to to make all of their financial decisions.

Furthermore, Co-invest is kind of a special product in that it lets you make personal decisions. Using Co-invest, you can say, "Let me buy this." But you have to make the final decision. For safety reasons, this is kind of the most we can do in many interfaces. We told ChatGPT, "Can we let people trade automatically? And they were like, no, that's too powerful. We don't want to take responsibility. But we've also shown the power of what you can do if you let Coin vest run wild and run automatically. Using Coin vest, we built a prediction market strategy. This was not something we did very seriously. I spent a weekend and used Coin vest to build a prediction market strategy.

It's been about 3 weeks since we built this strategy. Within those 3 weeks, we've already reached a sharp ratio of eight and we're number two on the outcome.xyz leaderboard. With this strategy, you're able to just turn it on and you just see positions and trades happen automatically. You aren't doing anything. It's kind of like being a quant fund, but instead of needing thousands of people and math PhDs, you can do this with just one person. It's really quite remarkable and we think it's a glimpse into what the future looks like. Uh we have here a video of what it looks like to be trading 15-minute up-downs with AI. You can see the orders going in and out. All These are all completely automated. As you can see, you know, you're not doing anything. You're just

watching trades happen in and out and in and out. It's really quite remarkable. This is what trading could look like in the future. You won't need to click the buttons. The orders will just appear. The positions will appear. And I think in this case, you know, you might not always win, but you know, it happens. This is what we think the future of trading could look like. You're not pressing any buttons. You're having an AI make all the trades for you. As a fun fact, in the history of Liquid processed about 2 million trades total. Within about 3 weeks, our agent made 500,000 trades leaving leading to like multiple rate limits and other associated properties with scaling.

We yearn for a world in which the best in which everyone has access to the most powerful systems to invest. Crypto is universal trading and we think that universal trading deserves universal intelligence. We think better trading will yield a better form of capitalism as we've just described. If you're interested, feel free to get in touch with me at franklin@liquid.trade or talk to me afterwards. Thank you, and it's a great pleasure to be here.