$300 million to plug the hole in Wormhole, exploring the low-profile Wall Street giant Jump Trading in crypto venture capital

Author: Mary Liu, BiTui

After the $320 million hack of the cross-chain protocol Wormhole, Jump Crypto — the crypto investment arm of Jump Trading — stepped in promptly to "rescue" the situation, "digging into its own pockets" to supplement 120,000 ETH. Just a day later, the Wormhole bridge was back online. Jump Trading's actions prevented a potential domino effect that could have impacted the entire Solana DeFi space. Notably, Jump Trading acquired the Wormhole development team Certus One last August.

Jump Trading is known as one of Wall Street's most mysterious high-frequency trading firms, with its executive team rarely appearing in the public media. However, the company has long extended its business reach into the crypto space and is currently a significant supporter of the Solana ecosystem. BiTui will take you on a journey to understand this most mysterious and low-profile Wall Street giant.

High-Frequency Trading Giant

Over the past few decades, high-frequency traders have been at the forefront of the wave of transformation in the U.S. financial markets. They leverage cutting-edge computer technology and regulatory changes to enhance trading efficiency by compressing stock margins/commissions and exploiting price differences for the same assets across different venues, rapidly accumulating vast wealth.

Jump Trading is headquartered in Chicago and was founded in 1999 by two former Chicago Mercantile Exchange (CME) floor traders, Bill DiSomma and Paul Gurinas, with the aim of minimizing trading execution time in financial markets. The company quickly grew to become one of the largest high-frequency trading firms globally, active in futures, options, and securities exchanges around the world, and is a major trader in U.S. Treasuries and cryptocurrencies. Jump Trading has over 1,000 employees and offices in the U.S., Europe, and Asia.

As a privately held company, Jump has not disclosed its financial data, and its founders have remained tight-lipped about its operational status, traditionally staying out of the public eye. The company's website only provides some recruitment information and legal document disclosures. As the company's business diversifies, this financial giant may become increasingly prominent.

Online Brokerage Business

Jump Trading executes crypto trades for the popular stock and crypto platform Robinhood. Simply put, Jump pays Robinhood, and in return, Robinhood sends its customers' crypto trades to Jump, which is responsible for executing these trades. This partnership has allowed Jump to establish a foothold in the online brokerage space.

According to documents from the U.S. Securities and Exchange Commission, in the first three quarters of 2021, payments made by Jump to Robinhood accounted for 17% of the broker's total revenue, meaning Jump spent approximately $247 million to gain the right to execute Robinhood's orders, and Jump's profits likely exceeded this figure.

A Decade of Dormancy, Expanding the Crypto Investment Landscape

Jump Capital, the venture capital affiliate of Jump Trading, is headquartered in Chicago and has nearly a decade of operational history. Peter Johnson, one of its partners and head of crypto strategy, revealed that the company has been secretly deploying crypto strategies for years. In an interview with the Financial Times, he stated, "Cryptocurrency is becoming real, and the pace of adoption is indeed accelerating."

In July 2021, Jump Capital launched its largest fund since its inception, with a total capital commitment of $350 million, attracting 167 investors. This is Jump Capital's seventh venture fund, with a capital amount 75% higher than its sixth fund of $200 million. The fund focuses more on the evolving crypto ecosystem, targeting areas including DeFi, financial applications, blockchain infrastructure, and stocks and tokens in the Web 3.0 space.

The BiTui editor has compiled a list of crypto companies invested in by Jump Capital based on publicly available information (not all are covered due to limited information):

It can be seen that leveraging Jump Trading's strong trading background, Jump Capital's crypto investment reach has extended into various sub-sectors such as trading platforms, distributed systems, infrastructure, DAOs, crypto compliance, and security, making it one of the largest participants in the crypto market.

Jump Trading has also made undisclosed equity investments in blockchain-based fan token issuer Chiliz, a Malta-based company that issues tokens and grants exclusive access to loyal fans of various sports clubs and teams, having struck deals with sports giants such as Manchester City, Juventus, AC Milan, Paris Saint-Germain, and FC Barcelona.

Protocol Participation

DeFi

In addition to investing billions in the crypto market, Jump Trading is also seeking to expand its efforts in DeFi and on-chain governance, actively participating in the Solana ecosystem:

• Liquidity provider for the decentralized exchange Serum in the Solana ecosystem;
• Founding member of the decentralized data project Pyth based on the Solana blockchain. The Pyth Network is a dedicated oracle network focused on obtaining continuous real-world and crypto-related market data from off-chain sources and transmitting it at sub-second speeds for use in smart contracts, aiming to publish high-fidelity, streaming, and easily accessible market data through major blockchains with the fastest block times;
• As a strategic partner and market maker, providing liquidity for the Solana-based DeFi brokerage platform Oxygen.

Infrastructure Development

It is certain that deep involvement in infrastructure development also gives Jump a head start when investing in companies and tokens in this field. BiTui previously reported that Jump acquired the blockchain company Certus One, which helped develop Wormhole, in August 2021 as part of its expansion into the crypto space. Certus One provides infrastructure services for proof-of-stake blockchains and has been actively involved in decentralized networks, including Cosmos, Terra, and Solana. Jump has stated that it was an initial code contributor to Wormhole.

In September 2021, Jump Trading launched Jump Crypto, a team focused on blockchain ecosystems and crypto development that had been in preparation for six years. The team is primarily responsible for participating in building software infrastructure for blockchain ecosystems, validation, trading, liquidity provision, protocol governance design, and development activities.

Jump Crypto's participation in crypto protocols includes:

• Terra governance proposals — Jump's data engineering channels and market competition experience enable it to analyze these complex systems and contribute meaningfully to discussions.
• Validator for the liquid staking protocol Lido on Ethereum, Terra, and Solana. Lido launched in December 2021 for liquid staking on Ethereum. Since its launch, the protocol has seen over $1.18 billion in staked assets across Ethereum, Terra, and Solana, paying over $216 million in staking rewards to more than 55,000 stakers.
• Jump Crypto is also venturing into the NFT space. The team has collaborated with Candy Machine and the Solana NFT platform Metaplex, as well as Impossible Finance, to create the largest NFT collection on Solana — 1 million NFTs, with Jump Crypto also contributing to the code.

Token Holdings

Data from the Messari platform shows that Jump Trading also holds a significant amount of cryptocurrencies. In addition to Bitcoin and Ethereum, Jump Trading holds various altcoins, including platform tokens BNB and HT, MKR from the decentralized lending protocol MakerDAO, COMP from the lending protocol Compound, SRM from the leading Solana DEX Serum, KEEP from the privacy protocol layer project Keep Network, HXRO, Numeraire (NMR), Orchid Protocol (OXT), and Synthetix (SNX), although the specific amounts held are not clear.

Conclusion

Twitter influencer @IamNomad commented on the Jump Crypto rescue event, stating, "I learned that some crypto people don't know who Jump Trading is. Jump ranks among the top five largest and most capitalized trading firms globally, with a team of 40 dedicated to cryptocurrency." Kanav Kariya, who became the head of Jump Crypto at 25, replied, "Our team is now close to 140 people."

No one can succeed alone in this new world of crypto; contribution means making the pie bigger for every participant. Public blockchains open up new, incredible resource coordination models by establishing trust among parties that do not trust each other, uniting communities into true stakeholders. While Jump has always positioned itself as a low-profile builder, strong voices in open-source development are becoming increasingly important in this community-driven new world. It is believed that in the near future, we will see Jump Trading evolve into the brightest star in the crypto world.