Manifold Founder Traced Early Trading Edge to CEX-DEX Arbitrage

Manifold founder Jae Chung said the firm built its early crypto quant-trading business around price gaps between centralized and decentralized exchanges, then worked to preserve returns as competition grew.

Chung said he began exploring quantitative trading in 2021, when he was 21 and had no experience in the field. His first prototype, written in TypeScript, compared Binance and FTX prices with those across 10 blockchains he viewed as the most liquid. He said it found opportunities and remained profitable after fees.

A later system built in Go and Solidity expanded across several chains, covering 10 to 20 decentralized exchanges on each, Chung said. With a few million dollars deployed, it generated more than $10,000 a day, he said.

As competition grew, Manifold focused on lowering costs and getting trades included. Chung said Solidity bit-packing reduced gas costs, while priority gas auctions helped the firm compete for transaction inclusion. He also described encountering other firms, including Wintermute.

Inventory shortages created another challenge. Chung said Manifold first designed an automated system to move funds through bridges and centralized-exchange withdrawal APIs, but it failed to work as intended because transfers were too slow and unreliable. Hydra v2 instead integrated Aave or a similar lending protocol, allowing the system to lend excess Ether (ETH) and borrow Tether (USDT) against it, he said.

“Especially in markets, table/game selection is just as important as execution,” Chung said. He said competition had reduced the strategy’s returns by the end of 2025, leading Manifold to shift time and capital to other strategies.