When AI Agents Control Billions in Crypto, Where Will They Trade?

Louis Régis (0:00)

I actually think that prop trading for agents has a much better market fit than prop trading for humans.

John Gillen (0:06)

The digital asset industry has brought an entirely new generation of financial parameters to the market. Prop trading is one of them. But what is prop trading? Why is it exploding? And what do you need to know about all of this? Hello and welcome to Milk Road Crypto, the show that knows that between props, perps and prediction markets, there are a lot of fun ways to go broke in crypto. I'm your host, John Gillen. Today is Tuesday, September 22nd. And today we are joined by Louis Régis. Louis is the founder and CEO of Propper, an on-chain prop trading firm built on Hyperliquid. I'm really excited to talk to him about prop trading. I know almost nothing about it, but I know he's an expert and I know he knows a lot about the Hyperliquid ecosystem too. So if all that sounds good to you, make sure you like and subscribe, share this episode with somebody who's gonna enjoy it. And as a reminder, our podcast today is free and that would not be possible without our partners at Nexo, the digital asset platform that lets you trade, earn and borrow all in one place. So keep an ear out for more information on them later in the episode, but for now, let's welcome to the Milk Road show, Louis.

How are you?

Louis Régis (1:04)

Hey John, doing super good. Market is up, the mood is up in crypto overall, and really excited today to talk about prop trading and PROPER specifically.

John Gillen (1:15)

Well, I'm really excited to have you. I think we're gonna learn a lot in this one. For those who maybe aren't familiar with PROPER and with PROP trading, could you just give us a high level overview of what this platform is and how PROP trading works?

Louis Régis (1:27)

To come back to the fundamentals of PROP trading, it's the ability for a young trader to access more capital without leverage. The way it works is you buy a test. So you take a test, the test has simple rules like a max drawdown limits, and they did us, and then you have to hit a profit target. And if you succeed in, if you pass this test, you'll get access to all capital.

So it's an easy way for retail investors that do not necessarily have access to a lot of capital to get a lot more size in the market in a way that's pretty seamless. For example, you can get access to up to 200K of capital to give an idea of the price. For example, 100K of capital can, you can pay north of like $500 to get access to this capital. So it's a different way to access leverage as a retail investors and grow your capital.

What we do specifically is we build this on-chain. So it's built on top of Hyperliquid, Super Transparency, our response to this industry that today is super opaque. Hyperliquid, the on-chain world brings a ton of transparency to the space and we're seeing great traction and great feedback from our users so far.

John Gillen (2:44)

How do you think about the ideal user group for this? Because prop trading traditionally has been something that has been done by a lot of institutions like Jane Street and so forth. Why do you think prop trading needs to be something that's more accessible to retail and who are the ideal users for this?

Louis Régis (2:59)

I would say someone that has found an edge on the market. So it's really good in the market, but does not have sufficient capital to scale.

But I would say, ideal customer would be someone that has a net worth from $1,000 to 100K and wants to grow their stack more rapidly. So it's a way to decouple your capital. I would recommend prop trading to only traders that know how to trade. I actually do not think that you should start with prop trading.

I think once you have an edge on the markets, maybe you've traded on paper money in the past, there's really a way to go. No, from let's say 100K of capital, sorry, 1K of capital to 100K, and then you can trade on your own. But it's really the ability to democratize access to external capital to retail investors, which as you said in the past, was only available to institutionals.

John Gillen (3:56)

So tell me about this.

You've said in the past that the technology is no longer the moat anymore and that anybody could build a prop firm. How do you think about PROPER in terms of protecting its moat and the unique value proposition of PROPER as opposed to somebody else building their own prop trading system?