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FTX Future Fund

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93 pointstmychow71 comments

If people are interested in where these ideas come from, please look at these links:

https://www.givingwhatwecan.org

https://www.effectivealtruism.org

If you're thinking about how you can contribute more than you currently are but don't want to leave a comfy FAANG job, I highly recommend reading a little about giving what we can. Disclaimer: I pledged with GWWC and am involved in some EA groups.

If you're in the New York City, this is the philosophy the Robinhood Foundation [1] pursues.

[1] https://www.robinhood.org

I'm actually curious what makes you say the philosophies are similar? I see that the robinhood foundation site says "Last year, we invested $172 million in over 900 of the most impactful nonprofits across New York City, including over $80 million for COVID-19 relief."

One idea I see expressed in Effective Altruism circles a lot is that a life overseas in some poor country is worth as much as a life here (in NYC where I live). Wondering how giving in NYC is more impactful than giving to unsexy causes like malaria nets abroad, given how expensive everything is in NYC.

I'm always skeptical of company's philanthropic arms because it's so easy to give to causes that make the company looks good instead of giving to causes based the most good you can do.

Although, I thank my direct parent for sharing that link, don't mean to come across as argumentative.

> One idea I see expressed in Effective Altruism circles a lot is that a life overseas in some poor country is worth as much as a life here (in NYC where I live).

Exactly this - it's not a perfect science but it is also a little more complex taking into account QALYs which are quality adjusted life years. Given two options for your $100 donation where one would give 100 QALYs in a poorer country, that is give 100 years of good quality life in total, verses 1 QALY in the West EA argues you should go for the former. It's hard though because people like charity they can see (local) and feel an obligation to donate to their own areas first (which I totally get and feel myself).

I view it the same way I view my stock investments - how do I get the most bang for my dollar, how do I get the most QALYs for my charitable giving. There is huge room for error here but the differences tend to be in orders of magnitude so you can be fairly certain the option is 'better' when you compare, but it gets really complex when you start to speculate on what that person might then do (for example thought experiments like wether you should save the lives of 10 children or one old philantrophist who is about to make a huge donation that will save 10,000 children but whose family won't make that donation if he dies).

> a life overseas in some poor country is worth as much as a life here (in NYC where I live)

Similar methodology, perhaps, not philosophy.

Both seek to objectively measure impact across multiple causes e.g. healthcare, education and other disparate philanthropic domains.

The scoping is, however, as you note, different. Robinhood holds that a life nearby is more valuable to the people near it than one faraway. (There is also an institutional component to this argument. A life elevated in New York has a higher chance of producing multi-generational change than one in an intermittent war zone. Though the war zone is in part a product of that depression.) So helping one person in the Bronx at the cost of five in Sub-Saharan Africa is okay, but helping one person in Manhattan over two in Queens is not. (Drastically oversimplifying, but you get the point.)

> company's philanthropic arms

The Foundation has nothing to do with Robinhood, the company.

Cool, thanks for the link! :)

Anyone else oddly skeptical of FTX? They seemingly came out of no where with ungodly amounts of money, and began slapping their name on anything and everything.

No. I have some mutual acquaintances with the owner through effective altruism and I've heard good things. It's pretty insane that he left Jane Street to try make more money to give to effective charities and now at 29 is worth $22.5 Billion! So they have the money to spend on these things and the fact he's running a future fund makes total sense based on what his original goals were.

Where did that money come from, though? People getting margin called on their life savings?

Update: I assume the majority of SBF's net worth is from FTX not Alameda, so my question is where does FTX's money come from. I assume it's from wrecking retail traders.

Crypto exchanges make a lot of money. Just from trading fees. Margin calls don't typically have their own special fees, although the perpetuals products (that one can get margin called on to begin with) typically have daily fees.

Coinbase did a direct listing of its shares at a $100bn valuation, with extremely low revenue numbers, which are still great numbers.

Anyone that:

A) Has similar volume

B) Has similar growth

C) Offers more ways of accruing value - such as perpetuals

D) Retains greater ownership of their own company

is simply going to have a lot of money. Its not that mysterious. Keeping a few $billion in crypto provides many opportunities for the same price appreciation as everyone else.

Alameda is also known as being quite a shark when it comes to deal making, if you don't get something in writing they are going to do the most profitable thing at you/your community's expense as soon as the opportunity arises.

Their OTC desk also likely has more volume than their lit exchange exchange, and OTC desks enjoy wider spreads in the trades.

And remember, they have nonstop trading sessions, 24/7, so more than 3x as many sessions as a stock or options exchange, and slightly more than futures and currency exchanges.

When I see a crypto exchange with tens of billions of daily volume and almost no marketing, I assume they are dealing with institutions, governments and probably organized crime.

Yes all are on crypto exchanges, alongside retail. They grow fast because they provide an immediate service.

Basically what happens is that they grow soooo fast that they arent able to handle customer support, cant list new assets that customers want fast enough, that even institutions want.

So then the next startup crypto exchange lists the newly desired assets and attracts the whole network and people fearing missing out.

And it keeps going. Thats the primary way they compete. There is a bunch of stuff behind the scenes for market depth and liquidity, but it reduces the need for exchanges to compete with each other on liquidity so its not really a factor just like trading commissions are really how they compete.

Boom town.

> Margin calls don't typically have their own special fees

Liquidations, not margin calls, are where the money is. And they definitely do have their own special fees.

Cool, what’s the current fee schedule, for myself and anyone passing by?

vmception - I get that you have massive crypto bags, because you're active on every crypto thread. But give it a rest sometimes.

Liquidations absolutely have implicit fees, as you don't have control over execution. There's a reason why every major exchange OWNS a market making unit...and it's for liquidations.

Your smug attitude in every thread towards everyone is really tiresome. I feel sorry for someone who has drank so much koolaid.

Good explanation. I wasn't aware of that part of Alameda's reputation though, where can I find more data?

This is one company that went public with their disagreement

https://www.coindesk.com/business/2021/03/16/80m-deal-gone-w...

Most others do not because voicing anything means no exchange listing, no potential of support from Alameda/FTX and their partners

Many token founders are fine with it for the payday (like in Ren/Republic protocol) while all the tokens get dumped on their community

It is very common in the crypto exchange/advisor space for contractual arrangements to go “I’ll buy your illiquid treasury and wont immediately sell, trust me bro” and then they sell once the partnership announcement creates a bunch of fomo and liquidity to sell into, Alameda has the reputation of being that way. And then when confronted they say “it wasnt in the contract and there was no vesting smart contract to prevent selling either, we’re not in the wrong”

Not the most community collaborative to say the least, its very lucrative for them

Dang, I wonder how easy it is for the Alameda EA folks to rationalize this as being for the greater good.

"We're reallocating surplus speculator dollars towards AI safety?"

Probably helps that many token founders don't seem too virtuous when many are just looking to make a quick buck through copycat apps. But sounds like some earnest people are getting burned, too.

> Probably helps that many token founders don't seem too virtuous

This perception is exacerbated because this kind of stuff has been happening behind the scenes for half a decade

Many founders do want to collaborate with their community, a community that expects and begs for exchange listings, which the founders cant talk about in advance and the exchanges know that and basically extort them and dump on the community, making the founder look bad and radioactive from then on.

Many/most want their project to organically grow and get help from large whales along the way, but it's more likely that tokens which have high value and many coveted exchange listings have nothing organic about them at all and cannot be emulated. Any founder trying to emulate it get into these token crashing toxic arrangements leaving many community bagholders.

It is nearly impossible to tell the difference between founders, the best thing that has occurred is that nobody needs these exchanges anymore. liquidity went onchain.

I personally don't see the issue with this assuming you're not running scams or building projects but purely trading.

Crypto trading with his own money and then his own fund. I believe it was Alameda Research which is still going. Basically a bunch of young Jane Street/MIT/Stanford mathematicians who've made a killing. You can read a little more about it here: https://80000hours.org/stories/sam-bankman-fried/

They did name it "Alameda Research" because they wanted to trick banks into servicing them.

exdsq is right in the sibling comment. Alameda also made a lot of money (probably still does) with arbitrage. BTC in Korea costs more than BTC in the US. It's not easy to convert KRW to USD freely but they seemed to have found a way around it.

[Edit: Typo]

Is the assumption that just because SBF made money, it must have been through "some evil"? What's the basis for that assumption (versus anything else, like ICOing a new token).

Nah the assumption that they made money in crypto which is just a cesspool of fraud, grift and crime - is what gives some folks the assumption that it could have been through fraud, grift or crime.

You hang out in the muck, folks are going to assume you have some on you.

I'm not saying they do necessarily, just that that's where the assumption more than likely comes from.

Liquidation fees are an very small portion of FTX's revenue.

"good things" is someone who claims to want to give his money away yet keeps getting richer, and is also getting a lot of his wealth by running an ethically dubious crypto exchange that is plastering its name on anything that will take their money?

He does give money away but it's hard to give quickly unless you just spray and pray which is against his ideals. And I don't agree that FTX is dubious, I think they're a genuine legit exchange. I take from your comment that your issue is with crypto, which is fine, but people are making money in that space and if someone wants to use that to their advantage to make a load of money for charitable causes I'm all for it.

So essentially, as long as he says he is only making all of this money so he can donate it, he gets the prestige of having already donated it without having done so yet, as well as a free pass to make the money however he sees fit?

He keeps getting richer because he owns a large stake in a company that's grown massively in a few years. He's given away millions of dollars by age 29.

Your criticism is he isn't giving away his money fast enough? Get a grip.

There’s incredible amounts of capital going into the crypto industry and FTX is one of the biggest players. There may be some froth but they seem like one of the least shady players in the space to me.

Well that is a low bar. I am curious why their US destination wires arrive from "West Realm Shires Services Inc" instead of, like FTX.

The question is how and why FTX became big given that BitMEX already existed.

Bitmex is very much a niche exchange, it only offers a handful of perps. FTX will let you trade pretty much any thing you can think of (crypto perps/spot, stocks, political elections, etc.)

BitMEX was engulfed in controversy (lawsuits and investigation) around the time FTX launched.

Bitmex and its liquidation engine is why.

The story is that their founder made billions of a crypto trade a couple years ago so I think they might have the funding to do stuff like this.

To extend on that, he’s done a couple ho hour interview with Sam Harris on ‘earning to do good’

I first heard about them when they began to sponsor a Magic: the Gathering related podcast and about a month(?) later, they're everywhere.

But I'm wary of the crypto space in general. A lot of bad faith actors.

Their growth was reasonably organic if you were following the popularity of exchanges

I've "followed exchanges" since Mt Gox, got screwed by Mintpal, saw the fall of cryptsy, the rise and eventual irrelevance of Bittrex, the rise and eventual irrelevance of Poloniex... Even with all of that, I still don't immediately know where FTX came from.

Tether

textbook greenwashing. if they want to make the world a better place, shut down FTX and stop enabling the insane, planet incinerating, fraud enabling, money laundering, rogue regime financing, fake tech breakthrough called "crypto". crypto companies like FTX should be viewed with the same disdain as Big Oil and Big Tobacco. this is like investing with ExxonMobil to stop climate change. don't fall for it.

https://corporate.exxonmobil.com/Sustainability/Environmenta...

https://www.bbc.com/news/world-asia-60281129

I would add the fact that the company is based in Antigua. So the overall picture is a very profitable company, in a domain which, as of now, mostly enables fraud at an insane energy cost, based in a tax haven. But somehow, this is for the greater good. With the challenges ahead, we, all of us, will have to decrease our consumption of most if not all resources. This can not be achieved by just pouring money from the penthouse of a skyscraper of a capital city.

Mostly True: "planet incinerating, fraud enabling, money laundering, rogue regime financing"

Totally False: "fake tech breakthrough called "crypto""

It's hard to look at this founder and say he isn't extremely well intentioned.

For a very young guy in this scene you'd expect expensive watches and cars, but instead he drives a budget car, is giving away a great majority of his wealth, and seems to truly care.

The reason he's keeping FTX open is to earn more money to give away to environmental, socioeconomic, and health organizations and research. His track record speaks for itself.

> The reason he's keeping FTX open is to earn more money to give away to environmental, socioeconomic, and health organizations and research.

There is no way you posted that with a straight face.

It's worth giving this a read [0].

[0] https://80000hours.org/stories/sam-bankman-fried/

If telling people you were going to do something was actually doing it, we wouldn't need contracts

And he's actually doing it, so what's your point?

How do you know? Has he shown you his bank statements?

The information you're looking for is accessible. I don't argue with people who say Bill Gates doesn't donate much money, either.

I haven't seen Bill's bank statements, but I believe he does donate for the same reasons I believe Sam does.

Because the Gates Foundation publishes its returns? https://www.gatesfoundation.org/about/financials

-_-

Sam's primary motivation to generate money is to fund Effective Altruism.

> planet incinerating

FTX pushes Solana, a PoS coin, very hard. Blockchain doesn’t need to use PoW.

Solana has other issues around scalability, reliability, and decentralization, but it isn’t “planet incinerating”.

Here's how FTX deals with climate: https://www.ftx-climate.com/

Is your stance on the environment what led you to leave the auto industry?

Very little on the site has to do with environmentalism.

The "Project Ideas" section has next to nothing regarding energy. Surprising given the focus on "humanity's long-term prospects".

Energy is a very important problem but also one that is heavily funded and researched. It makes more sense to focus on underfunded issues that offer a high reward. I argue that energy should be more funded for what it's worth, but climate change and renewable energy sources aren't that popular in effective altruism circles.

> but climate change and renewable energy sources aren't that popular in effective altruism circles

What.

Check out some of the fund breakdowns and look at how much is spent on climate change and renewable energy

https://funds.effectivealtruism.org

https://www.givewell.org/maximum-impact-fund

The common argument is that the best way to try and make an impact on climate change is to fund lobbyists to make change at governmental levels https://www.theatlantic.com/newsletters/archive/2021/12/most...

Hi there exdsq, I run a nonprofit, Quill.org, that serves five million students in the United States, and I am building an educational tool that is very similar to the "cognitive aid" goal listed as a project idea. I'm hoping to get some feedback from someone who is familiar with this space, and I was wondering if you had a moment to scan over our application before we send it? If you're interested in taking a look, it'd be a huge help if you could reach out to me at peter (at) quill (dot) org! I'd be really grateful for your input. -- The learning tool we are building now maps to this project idea from the FTX Fund: "AI-based cognitive aids - One of the great hopes for advanced AI systems is that they might enhance human reason—allowing people to explore lines of argument more carefully and efficiently, and to detect important errors in their reasoning. We’d like to kickstart this work, so that it keeps up with AI progress as much as possible. For example, could a fine-tuned version of GPT-3 be trained to identify misleading statements, and provide the best arguments and counterarguments for different views? We’d love to see products with this sort of technology that people will actually want to use."

Maybe it's wrong to place less emphasis on renewable energy but one of the arguments I hear in EA circles is that renewable energy/climate activism is already popular and gaining support. It's not a neglected cause area.

However causes like malaria prevention are pretty unsexy and don't get much love even though it's cheap, easily preventable.

Also, not talked about != not a worthy cause area to pursue.

One of the basic metrics that EA people track is "neglect," so if there's a way to make a big impact that actually seems possible to do, but also there's already a lot of people and money doing it (ie., it's not "neglected"), then EA people will mostly just let the other people do it.

The idea is to spend each marginal dollar in a high impact way, and a marginal dollar into a cause area that is already flush with cash won't make a big difference.

Getting more talent (instead of money) into the field is a different kind of intervention, but the energy field fails a different metric here which is "tractability," in the sense that EA people don't have any particular expertise or advantage in recruiting or training game-changing talent for the field, so it's not "tractable" even though it would hypothetically be nice if more top talent were in the field.

FTX has a dedicated Climate initiative: https://www.ftx-climate.com/

We'd love to see thoughtful plans for how to spend $1-100B to make humanity's future as good as possible. We might learn a great deal from these plans, even when we don't put them into action—and in some cases, we might do that too!

... We'd be excited and grateful to see rigorous criticisms of our priorities and concerns.

Ok, how do we contact you about this? None of the forms here seem appropriate

https://ftxfuturefund.org/apply/

Twitter.

Would a PWA targeting a large niche of underserved users who are accustomed to awful software in their niche be sufficiently altruist to contact them?

I've been procrastinating investment talks due to exhaustion by the state of ethics in the space; Sam's one of the few people I think I'd want to be involved in seeding my business.

God, so much hate on this thread. Damned if he do, damned if he don't. Always amazes me how HN crowd loves to project their ideals on how people with money should spend their money.

Yes because no billionaire has ever actually been as amazingly ethical as they have claimed. It’s not really damned on either side for the guys who got rich off this.

You want to reduce risk? Stop letting people gamble with 20x leverage.

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