Jump’s Crypto Specialists Depart for Blockchain-Focused Startup

Muyao Shen, Bloomberg News

(Bloomberg) -- A group of specialists at Jump Crypto, one of the digital-asset world’s top market-making firms, have left to start a new software company focused on developing a financial data feed project built on blockchains.

Former Jump employees Mike Cahill, Jayant Krishnamurthy and Ciaran Cronin have co-founded Douro Labs to work closely with the Pyth Network, a blockchain-based data service, according to a statement Tuesday. The group of 19 includes six others from Jump’s crypto team who were already working on Pyth, a representative for Douro Labs said.

Pyth Network is well known in the crypto industry because its data contributors — such as Jump, Virtu Financial Inc., Cboe Global Markets Inc., Hudson River Trading — are established names in the traditional finance world. Decentralized finance applications, including DeFi exchanges and peer-to-peer lenders, depend on Pyth Network and other oracle projects because they need reliable data on prices of tokens and other assets.

“The main goal with starting Douro Labs was that at this stage of Pyth Network’s development, we feel like there’s room for a full-time development firm to focus on some of the scaling problems,” said Cahill in an interview.

While Bloomberg reported in May that Jump Crypto has been pulling back from trading cryptocurrencies in the US as regulators crack down on the industry, Cahill said he and the others left the firm because they saw “a really interesting opportunity” to work on Pyth full-time.

Read: Jane Street, Jump Pull Back Crypto Trading Over US Regulatory Uncertainty

Jump Crypto will remain a contributor to Pyth Network as a data provider or so-called publisher, according to Cahill. The firm had previously supported Pyth through resources including the in-house team that’s now at Douro Labs, he said. Publishers of data submit pricing information to Pyth’s oracle program and earn a share of fees in exchange, according to Pyth Network’s website.

A representative for Jump Crypto said they have no comment.

Pyth Network’s Governance

The goals for the new Porto, Portugal-based company include a new software upgrade of Pyth Network and token-driven governance proposals, said Cahill. Unlike most crypto projects, Pyth Network doesn’t have a native token for governance. Instead, its governance is currently controlled by the Pyth Data Association, which its website describes as a Swiss association founded by the network’s participants.

“If you decentralize too soon, then you are going to have some challenges,” said Cahill. “The kind of idea that decentralization as a process makes sense, so the first thing that Douro Labs is working on is the mechanisms for which governance can be involved.”

While regulatory headwinds around crypto and decentralized finance will likely be taxing, Cahill said those challenges are more pronounced in early projects that are already governed by native tokens.

For him, the upside is Pyth Network’s ecosystem of 85 data providers and more than 200 applications using its data feed.

“That encourages me to think about a scenario where Pyth governance would be a robust, lively place with a mission,” he said.