[rwissmann]

Exciting implementation of a really cool concept.

> Today's market structure costs institutional investors (and by extension households) at least a trillion dollars annually (and Smart Markets hold the potential to eliminate that loss).

How does one get to this estimate? That is ~5% of US GDP. Everything else was easy to follow - this seemed high, at least intuitively.

[lpage]

It's a huge number that only makes context when looking at the absurd scale of capital markets globally. BlackRock has written on the cost of liquidity [1]. Unfortunately, much of the institutional research on this topic is in a walled garden, so we plan on publishing on this when we have our own data. Treating it as a Fermi problem, the market cap of US equities is ~50T and 140T notional of US equities traded in 2021. The global market cap is 125T (I don't have trading volumes there). FICC is much larger than equities.

Portfolio returns compound exponentially, so even small inefficiencies matter big time.

[1] https://www.blackrock.com/corporate/literature/whitepaper/vi...

[rwissmann]

You can get to big numbers on global capital markets, for sure. I was wondering whether you a consulting/VC-style estimate given how specific the statements was: "Smart Markets hold the potential to eliminate that loss" of "at least a trillion dollars annually".

How do you think about it? Let's say we expect half the benefit to come from equities.

>> 0.5T / 125 T = 0.004

>> Smart Markets would need to raise portfolio returns by an average of .4% (net of trading costs) annually.