What is Alameda Research? A startup incubator of Sam Bankman-Fried

In 2021, we witnessed the involvement of venture capitals (VCs) that have been heavily investing in the crypto world. Like everywhere else, the venture capital world can be categorized into tiers. Top-tier VCs can manage billions of dollars in crypto assets.

Alameda Research has made a huge bet on Solana and its ecosystem, which yielded the venture capital a colossal fortune. And in this article, we will walk you through Alameda Research, which covers:

• Alameda Research Overview.
• The portfolio analysis.
• The performance of Alameda Research.
• The investment thesis.

Let’s find out how Alameda Research is led by Sam Bankman-Fried and Sam Trabucco.

Updated Nov 12, 2022: Sam Bankman-Fried has officially resigned as CEO of FTX. FTX, Alameda Research, and other affiliated companies have filed for bankruptcy.

What is Alameda Research?

Alameda Research is a crypto-orientated venture capital founded in late 2017 by Sam Bankman-Fried (SBF) who is the CEO of the centralized exchange FTX. According to the main website of Alameda Research, they’re now managing $1 billion in crypto-assets and trade $1-10 billion in various crypto products (coins, altcoins, and derivatives).

In 2021, Alameda Research was one of the most influential venture capitals in crypto. They participate in investing in crypto projects and trading, OTC, and market-making. However, they’re located in Hong Kong and The Bahamas. The operation range of Alameda Research is at a global scale. They’re able to reach out for leading ideas in need of support.

The highlight investments of Alameda Research are mostly related to Solana and the Solana ecosystem. Therefore, in the following sectors, we will break down the Alameda Research portfolio and the team to glean some valuable insights about the adventurous fund.

Alameda Research Team

Sam Bankman-Fried (SBF)

Sam Bankman-Fried is the CEO of FTX - one of the largest crypto trading platforms. FTX concluded a $420M investment deal in a Series B-1 funding round, increasing the valuation of the company to $25B. In the 2021 Forbes 400 list, he is ranked 32nd with a net worth of over $22.5B. His speed of getting rich is comparable to Mark Zuckerberg’s with Facebook.

He handed the control as CEO of Alameda Research to the two new CEOs (Sam Trabucco and Caroline Ellison). He said the operation of this crypto trading firm would be the same after he jumped down. Even though his name is no more on the Alameda Research website, crypto veterans will remember him when speaking about the firm.

Sam Trabucco

Sam Trabucco is the co-CEO of Alameda Research after SBF passed on the position. Like SBF, he has an experienced background as a quantitative trader at some financial companies, such as, SIG’s bond ETF desk.

On Twitter, he often actively shares his analysis about crypto via data-backed numbers and technical indicators. Along with SBF, he leverages Alameda Research and his works through valuable posts on Twitter.

In a Q/A, he said:“We saw that yield farming was hugely valuable, so we spun up one of the world’s biggest yield farming operations over the course of days”.

In the later sector, we will break down yield farming projects in which Alameda Research is interested.

Caroline Ellison

Like Sam Trabucco, Caroline Ellison is promoted to be co-CEO of Alameda Research. She previously worked at Jane Street as a trade. She loves solving math since high school. However, on Twitter, she seems to be not too active.

Alameda Research Portfolio

Portfolio Overview

Since 2017 in the crypto space, Alameda Research is now focusing on both investing and trading. As mentioned above, they manage $1B crypto assets and trade $1-10B daily volume in various crypto asset classes.

The Alameda Research portfolio encompasses every niche in the crypto space. However, the team concentrates on higher layers of crypto platforms (application layers). Therefore, we can see some notable projects across categories in the two infographics above.

Infrastructure

• StarkWare raised $75M in a Series B funding round led by Paradigm along with other investors (Alameda Research is included as a new investor) in March 2021. Multiple big VCs are gathering to support this scaling solution for the largest blockchain smart contract platform Ethereum.
• Umee concluded a $6.3M seed round led by Polychain Capital and other investors (Coinbase and Alameda Research participated) in June 2021. Umee is a Cosmos-based platform that utilizes the IBC protocol to connect Cosmos to Ethereum and other EVM blockchains.
• Helium, a 5G blockchain network, raised $111M  in a token sale led by a16z, Alameda Research, and Multicoin Capital, including other popular VCs. SBF said that 5G would be a huge opportunity to enrich the quality of lives around the world.
• Acala, the DeFi Hub of Polkadot, was one of 12 teams selected for the second accelerator program by the DeFi Alliance, where Alameda Research joined as a mentor.

⇒ As a trading firm, Alameda Research’s investment thesis is not strongly targeting infrastructure projects in crypto. In addition, this venture capital often participates as an investor with other big VC leaders in those infrastructure deals. They have good relationships with other VCs while going along the way in the crypto space.

Yield Farming 

• Alpha Finance is emerging as a cross-chain DeFi ecosystem including Alpha products that can generate for customers the best yields with minimal risks. Alameda Research has been positioning Alpha Finance in the investment portfolio since 2018.
• Tulip Protocol, formerly Solfarm, raised $5M in a strategic funding round done by Jump Capital, Alameda Research, and other investors. Tulip Protocol on Solana provides yield farming services that can eliminate the existing problems of the Ethereum blockchain.

⇒ As mentioned, Alameda Research has been investing in Alpha Finance which might be considered as a yield farming model in crypto. Therefore, the Tulip investment of Alameda Research is the next move to find a better yield farming platform to incubate. The trading firm might envision Tulip Protocol to be the next Alpha Finance of Solana.

Wallet/Payment

• Coin98 Finance raised $4M from Alameda Research in April 2021. The quantitative trading firm believes the crypto market will grow fast in the following years, so they put an investment deal for the suit of DeFi product Coin98 based in Vietnam.

• Math Wallet concluded a $7.8M investment deal in a Series A+ funding round led by Alameda Research in Nov 2020. The platform aims to build a multi-chain wallet that can support over 60 blockchains, including major to less popular ones.
• MobileCoin raised $66M from venture capitals, including Alameda Research, Coinbase Ventures, and others, in a Series B funding round in August 2021. The project aims to build up a privacy-focused technology platform for mobile payments.

⇒ Crypto Wallets is the layer that has the most exposure to users as every new entrant has to create at least one crypto address. Alameda Research understandably added some potential projects across the globe into the portfolio. 

DEX

• Mercurial Finance is backed by DeFi Alliance, including Alameda Research. The DEX for stablecoins has raised over $10M in funding until May 2021. The leader of DeFi Alliance believes stablecoin liquidity is a must for Solana to flourish.
• DODO, a Chinese DeFi project, raised $5M from top venture capitals, including Alameda Research, Pantera Capital, Binance Labs, and other investors. The project developed a new market-making algorithm, “Proactive Market Making” (PMM), which fuses the operational functions of AMM and order book to facilitate lower slippage and cheaper gas fees.
• SundaeSwap, an AMM DEX on Cardano, concluded a $1.3 investment deal by Alameda Research, cFund, Double Peak Group, and other investors in September 2021. Alameda Research is now aiming at potential blockchain ecosystems so that they’re expanding their outreach to Cardano. SundaeSwap is expected to be like PancakeSwap of the Cardano verse.
• Nerve Finance, a stableswap on BSC, sold $2M worth of tokens for big investors (Three Arrows Capital, CMS Holding, Alameda Research with others) in a strategic funding round in April 2021. However, in August 2021, Nerve Finance rebranded to Synapse to become a cross-chain AMM platform for tokens.

Lending

• Parrot Protocol received $5M in the seed round which was backed by Alameda Research and other investors (Coin98 Ventures included) in June 2021. The protocol will unlock the potential of its stablecoin API and margin trading vAMM.

• Oxygen raised a $40M investment deal joined by Alameda Research -a lead investor, Multicoin Capital, and other investors in February 2021. Alameda Research’s plan with Oxygen to become like Robinhood in stocks. Oxygen on Solana will not rely on any centralized entity. 
• Anchor Protocol is a lending platform on Terra that is backed by heavyweight investors such as Alameda Research, Delphi Digital, HASHED, Pantera, etc. The lending platform is now the largest project on Terra, with a TVL of over $8B.
• Port Finance has Alameda Research as a lead investor in a strategic Series A funding round to raise $5.3M from investors including Spartan Capital, etc. Currently, there is over $100M TVL on the platform, which is a humble number compared to others such as Solend with $500M TVL.
• Jet Protocol concluded a $4.8M seed round from MGNR, Sino Global Capital, CMS Holdings, Alameda Research, and other investors in June 2021. After that, in November 2021, the lending platform raised $6.8M in a follow-on round led by Paradigm, Solana Ventures, 3AC, and other investors. The investment deal is to accelerate the DeFi product roadmap of Jet Protocol. The investment helps a leg for the development of Jet Protocol in the long term.

⇒ Alameda Research invested in 4 lending projects on Solana, which is a significant signal from this trading firm. Being the lead investor, the quantitative trading firm plans to take over the lending market on Solana. Let’s see the TVL numbers (updated on Jan 6th,2021) of those lending project investments as follows:

• Port Finance: $120M TVL.
• Parrot Protocol: $90M TVL.
• Jet Protocol: $23M TVL.
• Oxygen: $6M TVL.

While Solend with a TVL of $500M is outperforming others in the lending market on Solana, Alameda Research’s backed projects seem to be out of breath. However, with its tremendous fund, Alameda Research might come up with ideas to turn the table.

Derivatives

• Perpetual Protocol has raised $1.8M in a strategic funding round led by Alameda Research in 2020. The platform uses the vAMM design to build a decentralized exchange for derivatives. Some might say Perpetual Protocol is the combination of Uniswap and BitMex.
• Drift Protocol announced to raise $3.8M from big investors such as Multicoin Capital, Alameda Research, Jump Capital, etc. to build a decentralized derivatives market on Solana. The derivatives platform has released the mainnet with thousands of daily active users.
• Opium Network in November 2020 closed a $3.25 investment from Alameda Research and other investors to build a decentralized derivatives protocol on Ethereum.
• MCDEX has raised $7M in a funding round led by Alameda Research, Delphi Ventures, Multicoin Capital, and other big VCs. The platform aims to build an AMM decentralized perpetual swap protocol.

⇒ Founded by a trading veteran SBF, Alameda Research’s investments often concentrate on trading platforms (DEX, Lending, Derivatives,...). They’ve funded Perpetual Protocol and Opium Network on Ethereum, Drift Protocol on their favorite ecosystem Solana, and MCDEX on Arbitrum and BSC. This will grant Alameda Research and FTX more liquidity power inside the crypto world.

Asset Management

• Solrise raised $3.4M in a funding round participated by Alameda Research, CMS Holdings, Delphi Digital, Jump Capital, Parafi Capita, DeFi Alliance, and other investors. Multiple big names are supporting this unique project which is building a non-custodial and permissionless fund management platform for users to invest. 
• Prysm, in September 2021, has raised $3M in a seed round led by North Island Ventures, including big venture capital names such as Alameda Research, Poly Chain, etc.
• dHedge has been supported with a $1.8M investment by the biggest names in the crypto space, such as DACM, Alameda Research,... since 2020.

⇒ Toward asset management projects, Alameda Research puts a bet on each project in each ecosystem (Solana, Ethereum, and Polygon). From traders’ perspective, Alameda Research distributes the risk of losing by investing horizontally across ecosystems.

Liquidity 

• LIDO was invested in around 5k ETH by Three Arrows Capital, DeFiance Capital, Alameda Research, and other investors (angels included) via a 3% distribution proposal in Apr 2021. The platform is built to manage staked liquidity in 3 major blockchain platforms (Ethereum, Solana, Terra).
• Ren Protocol and Alameda Research have joined together to upgrade the interoperability of Solana. This facilitates cross-chain digital assets and brings more liquidity to the Solana ecosystem.
• Serum is the second arm of Sam Bankman-Fried beside FTX to act as a liquidity center that receives the main focus of the $100M DeFi Venture fund given by Multicoin Capital. Serum is a decentralized exchange running with a central limit order book (CLOB) on Solana. The Serum platform has a very big ambition to concentrate all liquidity of projects built on top of Serum.

⇒ Alameda Research prioritizes the liquidity circulating inside the ecosystem. The trading firm participated in the investment deal as a lead investor, showing that the thesis of Alameda Research is focusing on liquidity, especially Serum Project.

NFT/Gaming

• GuildFi successfully raised $6M in a seed funding round led by DeFiance Capital, HASHED, and other VCs (Alameda Research and Coin98 Ventures). The project is trying to build a web3 ecosystem that interconnects multiple blockchain-based games.

• DeFi Land raised $4.1M from big venture capitals: Animoca Brands, Alameda Research, Jump Capital, Solana Foundation, etc., to build a decentralized finance game on Solana. The platform is an agriculture-themed game that gamifies DeFi models for users to earn income while playing.
• Genopets initialized a new crypto term which is “move-to-ern”. The game has raised $8.3M in a seeding funding round led by Konvoy Ventures and Pantera Capital along with Alameda Research and other investors in October 2021.
• Hawku raised $4M in a seed round from major venture capitals: Multicoin Capital, Alameda Research, Animoca Brands, Solana Foundation. 

⇒ Like other biggest venture capitals, Alameda Research is also trying to take up a piece of the GameFi cake. However, this seems not Alameda Research’s strong category since the team originates from trading backgrounds. Therefore, Alameda Research often acts as an investment participant.

In which Ecosystem Alameda Research Invested?

Solana Ecosystem

From the beginning, the CEO of FTX (formerly Blockfolio), Sam Bankman-Fried, has depicted the future of his products linked to Solana. He believes the high-speed blockchain will scale to handle the world’s demand for transactions. Solana is on the way to that point on the roadmap in a few years.

Learn more: Solana Ecosystem Overview

SBF made his bet on Solana in January 2021 via a tweet in response when SOL was trading at $3. The later story is history when SOL’s ATH in 2021 was at $250 (x83). The tweet was epic in this crypto circle since others mimicked the tweeting pattern.

As Changpeng Zhao backs Binance Smart Chain as the CEO of Binance, Alameda Research is inspired by the Solana spirit from the richest name in crypto SBF, so most investments belong to Solana-based projects. SBF made a bet on Solana, and now he is trying to grow the Solana ecosystem through acquisitions and investments. Therefore, Alameda Research is renowned for its reputation in Solana.

Following is the list of Solana-based projects that Alameda Research has invested in:

• Layer 1: Solana (6/2021).
• Infrastructure: Syndica (11/2021)
• Asset Management: Solrise (7/2021).
• Yield Farming: Tulip (10/2021 - lead investor).
• Stablecoin: UXD (9/2021).
• Wallet: Coin98 Wallet (4/2021), Math Wallet (10/2020 -  lead investor).
• Derivatives: Drift (10/2021).
• Synthetic: Synthetify (6/2021).
• Lending: Oxygen (2/2021 -  lead investor), Parrot (6/2021), Jet (6/2021)
• NFT/Gaming: Genopets (10/2021), DeFi Land (9/2021), Burnt Finance (5/2021).
• Social: Chingari (10/2021), Only1 (7/2021), Solcial (9/2021)
• Liquidity: Lido (5/2021 - partner), Serum (8/2020 - main contributor), Ren (2/2021).
• DEX: Mercurial (5/2021), Aldrin (5/2021).
• Prediction: Hedgehog Market (7/2021).
• Map: Maps.me (2/2021 -  lead investor)

As a trading crypto firm, Alameda Research often prefers not to lead the investment in projects. The Alameda Research team is solid about trading strategies where they can catch the market sentiment. When there is Alameda Research, we should look into other investors too.

Should we follow Alameda Research’s portfolio?

Performance

SOL is the biggest bet of SBF, his surrounding company, and his organization. Like other major crypto ventures in 2021, Alameda Research built a liquidity-driven portfolio (ATH prices with prices at the beginning of 2021) as follows:

• SOL (Solana): 15,000%.
• PERP (Perpetual Protocol): 2,000%.
• HNT: 3,800%
• MCB: 1,480%
• TULIP: 500%

Although most investments of Alameda Research have released project tokens to the community, some incubated projects have not announced anything yet. Therefore, the opportunity here is to hunt for Retroactive Airdrops.

See Also: List Of Potential Retroactive Airdrop Projects in 2021 - 2022

Investment Thesis

Alameda Research is founded by a young trader Sam Bankman-Fried and operates as a quantitative trading firm. Therefore, investing in early-stage crypto projects might be so consistent for Alameda Research. Adding crypto venture investments to the portfolio can reduce the risk of liquidation and give a massive outcome.

Liquidity is a keyword that drives the portfolio of Alameda Research. They heavily fund crypto projects that are related to liquidity (DEX, Lending, Aggregator, Asset Management,...). Serum is a notable example of the liquidity center representing the vision of Alameda Research. In trading, they understand the importance of liquidity affecting the users’ experience.

The formula to get noticed by Alameda Research is liquidity plus Solana. Any views given in above are the subjective views of the author and should not be considered as financial advice or investment advice. You should do your own research and be responsible for your investments.

Alameda Research in 2022

In 2022, Alameda Research will vertically concentrate more on the Solana ecosystem since they have lots of Solana project deals. The trading firm will look for projects that can contribute liquidity to the ecosystem (bridges included). 

Conclusion

We’ve been through the detailed information and some insights about Alameda Research, and then we can conclude some quick takes for readers’ convenience.

• Alameda Research team includes Sam Trabucco and Caroline Ellison as co-CEOs. Billionaire Sam Bankman-Fried as former CEO, now acting as an advisor.
• The trading firm is investing in early-stage crypto projects and operating in other activities such as OTC, yield farming, trading strategy, etc.
• It bet on Solana and got massive returns. Currently, the firm is investing in the Solana ecosystem.
• Led by traders in the team, Alameda Research understands the importance of liquidity in the ecosystem, and they’re heavily investing in it.

And that is all you need to know about venture capital Alameda Research. I hope you’ve gained the overview, and our insights will be helpful to you. There will be more articles for other VCs. Stay tuned!

If you want to know further about Alameda Research, please leave a comment below and join Coin98 Community for further discussions about Crypto.