Astera Application

This is my application to Astera's Residency program. It's the first grant-style program I've applied to since the last SCF round, which was a standout after generally years of inactivity on this front, given zero progress with such a wide array of other sources — at least after those initial brush-ups.

I'm so very tired of sitting here waiting for things to happen. I just want to get in that pilot's seat and send it all off at once. I respect the individuals behind this institute, and I hope it can be the difference.

Describe the problem you expect your residency to focus on and your proposed solution or direction for identifying a solution. Aim for a level of explanation that a smart college freshman could understand.

There's a gaping problem with how markets allocate capital today. All of our stock markets revolve around one central intermediary, which extends influence to its select few members. When the investing public disagrees with the interests of these middlemen, as happened in 2021 with GameStop, this single point of failure can, has, and will continue to take unprecedented central control.

While we saw this four years ago as something benign, isolated to a basket of securities, the problem is so much worse than most realize. Our community has researched the depths and particulars hidden in the opaque darkness of market plumbing. To put it very earnestly, the interconnectedness of these firms threatens savings and retirements worldwide.

These systems emerged from the historic costs to transfer physical stock certificates. For efficiency, brokers emerged and created credit-based trading, so that only agreements for stock needed to move around. But today's laws construe these rights as "share entitlements" which can and have been taken in Lehman's bankruptcy.

We can stop these tragedies from repeating with a return to debit-based trading. Most systemic risks emerge from unbalanced accounting books at the largest custodians. Investors can always withdraw from these banks to hold shares in their own name on the corporate records.

While many have highlighted this tool in the past, the legacy financial infrastructure still holds the vast majority of shares through a single aggregated nominee. Before modern blockchains, it simply wasn't feasible to compete with their established power. An innovative upstart would have to compete on the same regulatory playing field, which historically led to monopolization through coerced industry standards.

Our proposed solution incorporates a blockchain which decentralizes trading and exchange without trusting institutions. This way investors can have confidence in the liquidity and security of their portfolios. Today they only have security because the only way to trade is back through Wall Street's name.

Since the legacy options in this space amount to Excel, our solution additionally opens new regulatory pathways for enhanced investor protections. We are implementing this through a decentralized nonprofit, which has additional future governance work to remain nonbiased. Briefly, past self-governance ensnared itself with the interests of brokers, and we plan to build mechanisms resilient to outside corruption.

Why did you pick this problem to work on? What’s novel about it?

Growing up, I started work early on in a minimum-wage job. But I couldn't stand the constant monitoring or poor work environment. Fortunately, I found trading and markets as my escape.

It took many years, but I eventually got really good at it — even wrote a book! Notwithstanding, I noticed two very large flaws, ignoring access restrictions per issuer nationality. Briefly, raising an investment fund entails massive central trust upon the intermediaries of capital markets, which I was not afforded.

In pursuing my own trades through retail accounts nonetheless, I uncovered the second flaw. It was present throughout my whole career, across thousands of trades. In one poignant example, 30% of my profits went to the broker in commissions and fees.

The challenge is for-profit trading venues, which have created a spider web of dispersed order books. Only a select few big players can access many of these systems, creating markets you and I can't access. Their interests disallow efficient free markets.

Why are you the right person to move your project forward?

I grew up an investor far before exploring the stock recordkeeping business. My focus was always efficiently allocating capital, which the present system throws to the side in exchange for easier management fees. At a certain point, I just couldn't stand to watch the innumerate and costly mistakes made by investment committees.

Other projects over the years have tried tokenizing equities. Few are still solvent today. The few which did meaningfully operate generally used a custodian operation which bought and held 1:1 backed legacy shares.

Inherent in this business model is an extraction of trading fees, which I've always despised as a trader. These central costs come only from limited public access to the exchange function, which so many view as a source of potential profit. But I've seen firsthand and thoroughly researched the enormous social cost of transaction taxes via fees which hinder asset allocation.

Tomorrow's new market needs someone aligned with:

• investors
• issuers
• regulators

What assumptions about the future of science and technology are baked into your proposal? What are the ways in which those assumptions are most likely to be wrong?

I assume (and hope) that the world continues becoming more decentralized. My largest cited investing gripe revolves around giving a select group of the "top" few hundred public companies increased investments forever. However, a more natural world would intelligently allocate capital horizontally to those best ready to steward its growth.

This assumption could likely be proven wrong through the maintenance of the status quo. Yesterday's established institutions could continue their longstanding traditions centralizing capital. And knowledge of these systems could stay gated to the few professionals perpetuating them.

I've attempted to demystify and spread this information through hundreds of YouTube videos, to no avail. But just that act in itself shows the potential of shared new technologies lending anyone a voice with minimal permission. I believe so deeply that these internet (and now blockchain) tools spur exponentially more new innovative ventures via local, aligned capital formation.

Why isn’t this problem likely to be adequately addressed (at this stage) by academia, government, or industry?

I have tried pursuing this through undergraduate research and potential master's or later work at Tech. While I received positive initial feedback on my founding thesis work, further collaborative propositions yielded few results. Largely, program organizers steered me towards commercialization.

At many of those events, my values did not align with the profit interests of local funders. Notwithstanding, I participated in a school-sanctioned accelerator program among others. But all these experiences focused too heavily on business developments and venture offers, which directly conflict with the most efficient system.

While I did put together government grant applications, I honestly couldn't get through all the hassling red tape to integrate our finances with them. I looked specifically at use cases in GSE mortgages, but later found that the accounting bid-out here and for the Treasury are anything but competitive. Broadly, nation-states and industry have stagnant infrastructure monopolies.

Who do you envision using your residency’s outputs, and how?

The first thought that comes to mind is a small family in rural Africa. They've always been a leading mental vision, among many other internationalities. The happenstance of your birthplace shouldn't determine whether or not you can invest in quality equities, but it does when access depends on a broker able to turn a profit on your account.

These systems we build, just on the capital allocation front, allow anyone to permissionlessly prove themselves as a profitable independent money manager. With capital distributed accordingly, without preference for legacy relationships, we can distribute opportunity to masses of people presently invisible to investors. And without intermediaries putting up their gates for what can access the market, all investors can seamlessly diversify into their own preferences.

I've positioned much of the coding front to operate as an industry standard open to any other agents to deploy and upgrade collectively. Any participant can use it to access new geographies. (Sorry this is over the limit but) one last thing I'd like to share is our governance toolset, which I believe will advance a tech stack capable of direct neural democratic systems.

How long have you been thinking about this problem? How much progress have you made on it?

WARNING: This one is 700 characters longer just because I've been working on this for a while — my bad.

I have been meditating every day for 8 years about how to build real savings and retirements for masses of people. Since that date of writing my goal down, I've wanted to get it achieved around the end of the decade. Specifically, I desire an online broker that combines traditional equity, bond, and (crypto)currency markets in a decentralized system.

My initial approach was to accumulate a sizable chunk of capital to use creating an elite team. While I ventured down this path successfully for 4 years, the fund reached a point where I'd have to sacrifice my morals in deference to central brokers to keep growing. So I chose the path of independent research and action with what I had then and there.

I founded the transfer agent 4 years ago, which has since been regulated by the SEC and put on-chain the complete shareholder register of a South Carolina company. In those years I singlehandedly wrote TAD3, a stock ownership compliance system built on America's most advanced securities laws. While I love and appreciate the incredible developers I was able to bring in over the years, we've run out of funds to pay others, and they left long ago when the compliance work was far too early in infancy.

That was until I found the DRS community stemming from the 2021 fiasco, which opened just an immeasurable number of mental doors for me. We first seriously collaborated and intertwined last year, where I spearheaded regulatory and nonprofit work. This has set us up very well for the present Administration, poising new guideline creation which opens the door for common adoption.

Do you have a history of involvement in open science or open-source projects?

I'm not a developer by nature, although I may be one by training. In high school, I recall pushing myself hard to learn BASIC language after cross country. It just wasn’t clicking, so I went back to trading under the presumption I could hire for coding.

But when push came to shove, I didn’t have the resources to sustain this ideology, so I just started developing the work through GitHub. I didn’t understand the significance of open-source then, so I just made everything public with no license. Only when I found the community did the material licensing implications reveal themselves, whereby I’ve been devout to maximal sharing through Affero ever since.

Around this time I realized the significance of open-source projects. I’ve learned over the years, especially with AI, and contributed back to many ecosystem projects. My latest work on the Stellar docs for regulators stretches back a year, and I like to think that all the research I published online over the years counts towards open science.

How have you dealt with mistakes or failures in the past? Have you ever failed at something significant in a public way?

As a trader, I've had a lot of failures which shaped my skillset to its point today. One of the earliest examples was liquidating a portfolio to transfer to a scammer in Bitcoin. At 16, the whole endeavor lasted months and cost me assets then worth $100,000.

I've voluntarily commented on this extensively in public forums and documentation, as I greatly value transparent working products. It was a helpful setback that taught me to sincerely stick to my guns.

Speaking of, I recall all the grant applications we were denied for at the agency. It was reminiscent of the dozens of college scholarships I applied to without a single acceptance. One particularly jarring experience was spending months preparing with the limited central team of five for a program years back, only to not receive community funding in blockchain tokens.

But I like to think things always work out. Not one minute after sharing the team news, we won a grant award at our Tech Capstone Expo. Time and reflection ease me.

What is the hardest thing you’ve ever done that would not be obvious from your LinkedIn?

The last year running the fund, I slept 2 hours a day for 8 months. I followed polyphasic Uberman, taking a 20-minute nap every 4 hours. This routine let me trade 1000X leveraged forex futures around the clock (they were really CFDs, but that's another story).

The whole experience was exhilarating, incredible, and sentimental — professionally at least. But it was simultaneously one of the loneliest, bleakest, and tensest periods of my life. I remember calling Tech maintenance to put bed bug traps in my room, only to learn that the breakouts on my back were from cortisol elevation.

The trading really was groundbreaking and transformative—showing me the true extent central liquidity aggregators steal billions from the masses every year. But that discovery came at the cost of practically my entire social life, as I spent every day holed up in my dorm all day long. Homework and classes practically went out the window—although video college helped—as I received my worst marks that semester.

What gets you out of bed in the morning?

I had to take a deep breathing moment after writing that last response, because I've come to understand just how foundational markets are to societies. Even the regurgitation of my experiences watching these middlemen corrupt the price mechanisms gets me seething. They are taking so very much from the worst off just to line investors' pockets, and nobody even seems to notice!

The whole world we live in is just so wrong financially, it bewilders me daily. That was my thought process when I woke up at 4am every day for 10 months in high school to write the book. And frankly, I would've done a whole other one on just the plumbing infrastructure if it was remotely popular.

Something is so wrong with the financial system today; it's like a giant hole sucking wealth from everyone's pockets. A system I've intimately seen concentrate power and control into the designers' select few hands. It's a slow process that takes many decades, but I want nothing more than to give everything back to the masses.