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Founder of Wall Street Bets Takes Fight to Blockchain Investing App

  • Jaime Rogozinski says the erection of Harambe opposite the Wall Street bull was a powerful symbol. 
  • He’s taking to the blockchain to fight against what he calls market manipulation.
  • He says it’s taking another approach to, if you can’t beat them, make money off of them. 

A seven-foot statue of Harambe, the gorilla that was shot in 2016 at the Cincinnati Zoo after a three-year-old boy fell into its compound, was recently placed on Wall Street opposite the iconic bull. 

The stunt, complete with thousands of bananas, was pulled off by co-founders of the private social platform Sapien.Network. They wanted to juxtapose the powerless gorilla against the raging bull to illustrate the wealth gap between Wall Street and the general public.

The mammal has become a wider symbol of vulnerability. For instance, retail investors in the Wall Street Bets movement who banded together to buy stocks that hedge funds had heavily shorted referred to themselves as apes. 

Jaime Rogozinski, the founder of Wall Street Bets, called it an important statement. His movement began as a subreddit for everyday investors and mushroomed to drive up the stock prices of GameStop and then AMC astronomically. The outcome was short squeezes that led to heavy losses for hedge funds betting against these stocks. 

“You have bears and bulls, traditionally. Now you have apes, which are just individuals that are feeling empowered,” Rogozinski said. “They found a way to have their voice on Wall Street in a way that they couldn’t, and were frustrated over a decade ago.” 

But now Rogozinski says the movement is being misunderstood from within and outside, including by regulators. He pointed to the Securities and Exchange Commission’s long-awaited report on the GameStop frenzy, released last week, which outlined the market forces that bred the mania but made few specific policy recommendations. 

Rogozinski said the SEC’s report was also a signal that regulators, too, have missed the point. He told Insider he got the sense that the report sidelined retail investors because the SEC didn’t emphasize issues that would protect them. 

Instead, he said, the report emphasized things like in-app confetti animation and questioned whether it encouraged people to trade more than normal. 

“And that’s insulting. It’s missing the point,” Rogozinski said. “You can’t assume that these retail traders are buying something because they’re going to get rewarded with a confetti animation.” Robinhood removed the animation in March.

On the other end, issues with the settlement process, the question of dark pools, or short-selling had lighter recommendations, he said, adding that the report only suggested that more research and better reporting should be done on them. 

“The [WSB] movement has always been about, let’s improve this system,” Rogozinski said. “There’s a lot of things wrong with it, and we need to make it better.

Rogozinski said what needs to be addressed more forcefully is what he describes as market manipulation, where participants try to cheat or exploit the market structure to move prices, he said. A previous statement from his firm alleged that it was being “perpetuated by opaque and politically connected banks and hedge funds.”

He pointed to the 2010 flash crash that wiped out $1 trillion in market value within an hour as an example. The case revolved around a single trader who manipulated the market from his bedroom using a software algorithm. The strategy, which makes trades milliseconds before other orders, is used by many high-frequency traders.

Rogozinski believes that blockchain technology and DeFi have been able to do a lot of things better than traditional Wall Street, including improved accessibility for retail investors and allowing people to trade 24/7. And so he’s taking his fight to the blockchain. 

The project is called WallStreetBets Decentralized Application, or DApp. And it’s governed by its native crypto, the $WSB governance token.

The app plans to feature so-called exchange-traded portfolios. These ETPs are like ETFs but are built on community consensus on a blockchain. For example, members would be able to vote with their $WSB token on how much of a particular stock a given ETP holds.

The ETPs would be able to combine assets from crypto, stocks, and ETFs. Smart contracts would create the ability to set conditions and transactions in real-time, circumventing the bureaucracy tied to rebalancing an ETF. In a previous statement, Rogozinski said it was a way to end dependence on institutions altogether. 

The plan is to even allow ETPs to trail portfolios, like that of US House Speaker Nancy Pelosi and her husband, Rogozinski said. The ETP would simply adjust every time the Pelosis make a trade.

The sentiment of trading by mimicking stocks that members of Congress are buying caught wildfire on TikTok. Content creators began noticing trades executed right before major news and policy took place that would impact a stock. And if this is what’s happening, Rogozinski doesn’t think that this type of trading is going to be stopped anytime soon.

“I could complain about it or I could make money from it too. And that’s kind of the Wall Street Bets approach to things, which is, I could sit out there with a camping tent and Pitchfork or a sign, or I could be making money,” Rogozinski said.