Why Perps Are Taking Over | Kaledora Kiernan-Linn

Summary

• The founding thesis of Ostium (rendered “Austerium” in the captions): consumer trading apps evolved between the 2008 crisis and COVID under zero inflation, predictable rates, and geopolitical calm — and COVID was a paradigm shift that inverts all three for the next 10–15 years. Her receipt: markets swung from three expected rate cuts to one hike in a week, “one of the fastest reversals in a decade.”
• Two tradeable consequences follow. Retail now trades the second-order effects of events — speculating on the Strait of Hormuz and trading the Brent/WTI spread, behavior that “was not the realm of consumer trading” five years ago — with prediction markets as the “gateway drug.” And traders are cross-asset by default: Bitcoin, gold, oil, Nvidia in the same day, in the same instrument. Perps are that instrument — “the perpification of everything,” her counter-slogan to tokenization.
• The structural call: the biggest opportunity in DeFi is not rebuilding the exchange stack from scratch (the standard crypto-perps approach) but doing “for global markets basically what stablecoins did for the dollar” — Circle and Tether, crypto’s most profitable companies, take the existing dollar and put it on chain. Ostium is the broker layer, not a DEX: no order book, an instant-settlement liquidity pool, directional flows hedged in the underlying market with daily mark-to-market. Jonah says it seems like 80% of volume comes from RWAs.
• Positioning signal worth stealing: since end of January Ostium’s traders have been extremely net long oil, net long gold, lightly short S&P — a stagflation trade they were “very early” to. Normally you fade retail platforms, but this is “protail” — single whales moving size — and “our traders are like quite good,” albeit with wild P&L swings.
• Her market-structure read: this is “postmodern investing,” the “revenge of the super online” — tradfi now behaves like crypto, “so momentum-driven, so sentiment-driven, so reflexive,” and there’s genuine alpha in understanding viral loops, including agents hooked to Twitter accounts trading pivotal news programmatically. Avi’s corollary: volatility favors small fish — if you must flip on a dime, better to manage $1M than $1B.
• Founder-quality lens for investors: 20 years of ballet gave her 10–15-year time horizons (“insane alpha”) but she had to unlearn perfectionism — “being decisive is often more important than being right.” Ostium’s first three years were “conviction hell, not pivot hell”: one thesis, no market feedback, survive until the market matures — “there’s huge alpha in just not getting injured.”

Deep dive

1. Ballet made the founder — minus the perfectionism

• Kaledora danced from age 3, then five professional years (Boston Ballet, Royal Danish Ballet). The transferable edge is time horizon: you train 15–20 years for a shot at a dream, so in a world “where most people are operating on a very short time horizon,” she argues “it’s like insane alpha to be able to think on a 10-to-15-year time scale.”
• What she had to unlearn: ballet is “practicing the same move for two or three decades” toward perfection, while business is 80/20 — “being decisive is often more important than being right.” Building the company, she says, fundamentally changed her philosophy on perfection versus good enough.
• Avi’s investor heuristic, offered as a screen for listeners: bet on founders who did competitive sports — Novogratz “loved hiring Princeton wrestlers” — because the signal is determination to see things through.
• Her survival framing: startups need two opposed modes — memetic, dopamine-driven momentum-chasing, and “literally not dying.” Longevity means being around long enough to get lucky: “there’s huge alpha in just not getting injured.”

2. Why she left the stage: get on the technology train

• The retirement was “extremely first principles,” not injury or burnout — she loved ballet. Reading The Black Swan (while still dancing) and Sapiens convinced her the world would change faster in her lifetime than ever, framing a fork: preserve an art form — “incredibly noble” — or “be close to driving the train” of technology. She knew nothing about AI or crypto at the time.
• The Taleb exchange is good comedy with a real point. Avi: “everyone successful and intelligent at one point [had] a Taleb” phase; the books weren’t mid-curve when she read them — “too many people read them and then they became mid curve.” She takes it: “I was so ahead of the curve.”
• Her book pick, defended as a “normie stance,” is likely Sapiens — she frames it as philosophy: how paradigm shifts happen and how to think about tail risk.

3. Conviction hell, not pivot hell

• Origin as told: she met co-founder Marco the first week of freshman fall in Ec 10 at Harvard — “the two most opinionated kids in the class” — after returning to school post-ballet. Both interned at Bridgewater (she on a CIO’s team, he in commodities), and they spent late nights in Dunster dining hall on markets, philosophy, geopolitics: “we were the meme of that.”
• Her contrarian description of the early years: most startups live in pivot hell; Ostium’s first three years were “conviction hell” — one core thesis, incredible conviction, a crypto market “definitely not mature enough” to confirm it. Her line to the team: “you have to pass through conviction purgatory, soon we’ll be in conviction heaven.”
• The most jarring transition of her founder life: from scarcity-mindset runway preservation to — once the thesis proved out — “throw everything at the wall as quickly as possible” to keep first-mover advantage. Two very different mindsets, and stage determines which you need.

4. The regime broke in 2020 — trading apps haven’t caught up

• The core thesis: first-generation consumer trading apps (a Coinbase for crypto, a Robinhood for stocks) evolved 2008–2020 under zero inflation, predictable rates, and geopolitical calm. COVID was a paradigm shift, and the next 10–15 years invert all three. Evidence she cites: the swing from three anticipated rate cuts this year to one hike — “one of the fastest reversals in a decade.”
• Consequence one: consumers trade events, and not just first-order — Twitter is full of people gaming the Strait of Hormuz and trading the Brent/WTI spread, formerly institutional behavior. Prediction markets are “almost like a gateway drug” to this second-order event trading, because “macro is now driving volatility… macro news is the new reality TV.”
• Consequence two: “the trader of tomorrow is cross-asset by default” — Bitcoin, gold, oil, Nvidia in the same day and the same instrument, with perps abstracting away dated futures and options. She points to that morning’s Bloomberg headline — crypto traders pivoting cross-asset — as “just the beginning”: the single-asset-class segmentation “is completely breaking down.”
• Avi corroborates from his own seat: at GoldenTree in 2022–23 his macro trading was limited to betting Fed meetings; now — in what he calls “entertainment finance” — Trump headlines plus a natural rise in world volatility have made macro vastly more interesting than four years ago.

5. Not an exchange — the broker layer that stablecoins the world’s markets

• The claim she opens the episode with: the biggest opportunity in DeFi “is not rebuilding the exchange stack from scratch, which is basically how everybody has approached perps in crypto” — it’s taking liquid, functional existing markets and extending their global reach with on-chain settlement and transparency. The analogy: Bitcoin maxis rebuild fiat from scratch; Circle and Tether — crypto’s most profitable companies — just put the existing dollar on chain. Ostium wants to do “for global markets basically what stablecoins did for the dollar.”
• Hence the common misunderstanding: Ostium is not an exchange, not a DEX — it’s the broker layer. No order book, no matching function. Rebuilding gold’s liquidity from scratch means orders of magnitude worse executable size — “this is just a fact of physics.”
• Mechanics (with her caveat that “a big upgrade is coming very shortly”): two pools — an intraday lending facility sized as a multiple of unrealized P&L so the North Star holds (“any trade can be instantly settled”), while directional flows are hedged in the underlying market through traditional participants competing for flow, with a daily mark-to-market and rebalance.
• Jonah’s refinement, which she concedes as “roughly correct”: for crypto assets already controlled by one or two market makers, this architecture may help larger-liquidity markets bootstrap faster but changes little for long-tail altcoins. Jonah also says it seems like 80% of Ostium’s volume comes from RWAs. Her gradient: gold you might rebuild; copper and beyond, fragmenting liquidity across order books gets tough.

6. Protail whales saw stagflation early

• Who actually trades there: not institutions, not “tiny shrimps,” but “one layer below pro” — single whales and small family offices moving significant size from their own portfolios, late 20s to early 30s, who “trust the internet more than they trust traditional institutions” and need execution because they aren’t filling tiny orders at top of book.
• The positioning data is the episode’s most tradeable nugget: since end of January, extremely net long oil, net long gold, lightly short S&P — “a stagflation trade” they were “very early” to. She flags the usual rule — “almost always retail platforms, you want to go against them” — but this cohort, wild P&L swings aside, “are like quite good.”

7. Postmodern investing: revenge of the super online

• Her framing of the era: as tech was revenge of the nerds, markets now are “revenge of the super online — revenge of Twitter, revenge of 4chan.” Tradfi is converging on crypto’s behavior — “so momentum-driven, so sentiment-driven, so reflexive” — so growing up on the internet and understanding viral loops is genuine edge, down to agents hooked to specific Twitter accounts trading sentiment-pivotal news programmatically.
• Avi’s addendum: volatility is good for the small fish — “if you have to change your opinion on a dime, it’s better to manage $1 million than $1 billion.”
• Closing color that doubles as origin story: her German father grew up in East Germany on family hyperinflation stories, and his phone case was a custom print of the 100-million-Reichsmark note from Weimar — an anti-money-printing, Austrian-economics household. Avi’s kicker: “it’s in her blood to be in love with crypto.”