Variational Founder Lucas: Must Repeatedly Question the Endgame
Variational founder Lucas Schuermann stated that repeatedly questioning the endgame is essential to truly channel the efforts of the founders into themselves and their 25-person team.
He mentioned that the team is running a protocol that is already substantial in scale and embedded in the crypto economy by any metric, so there must first be a vision, an endgame, and a reason to get up every day and work hard; otherwise, they cannot be responsible for this infrastructure. The product's endgame is summarized by him as: global traders should be able to trade in global markets, eliminating the red tape, restrictions, tax burdens, fees, and onboarding processes that fragment the market, especially those predatory fee platforms he prefers not to name.
On a broader level, he emphasized that he likes to create things that people will use. Seeing new technologies being utilized, or even replicated, gives him a sense of fulfillment; for many entrepreneurs, pride comes from creating something and seeing it used. He also applies this to trading products: enabling global traders to access a unified account, rather than being fragmented by exchange licenses, broker onboarding, and local taxes.
Variational was co-founded by Lucas Schuermann and Edward Yu. The two met in their dorm at Columbia University, founded the quantitative fund Qu Capital in 2017, and after being acquired by Digital Currency Group in 2019, joined Genesis Trading, where they served as Vice President of Engineering and Vice President of Quantitative Trading, handling over $250 billion in OTC transactions. After leaving in 2021, they converted their proprietary trading profits into protocol development. The company has completed approximately $10.3 million in seed funding and a $50 million Series A round led by Dragonfly, with participation from Bain Capital Crypto and Coinbase Ventures, totaling approximately $61.8 million in funding.
The retail application Omni operates on a broker rather than an order book exchange model, quoting and hedging from a single counterparty, Omni Liquidity Provider, while aggregating liquidity from centralized exchanges, decentralized exchanges, and traditional financial market makers, claiming zero trading fees and monetizing through spreads. The platform's cumulative trading volume has exceeded $200 billion, with personal pages stating over $275 billion, listing around 450 perpetual markets, and open interest ranging from hundreds of millions to $750 million, with physical asset perpetuals like gold, silver, copper, and crude oil already launched, aiming to bring over 100 traditional markets on-chain. The institutional product Pro continues to advance as originally designed, relying on chat software, wire transfers, and legal teams to complete OTC derivatives clearing.
In terms of market mechanisms, buy orders come from retail and professional traders seeking unified margin, zero fees, and global varieties, while sell orders and hedging are routed by OLP to centralized exchanges, decentralized exchanges, and traditional market makers in New York, Chicago, and Amsterdam. This is a clear product and financing event-driven approach: Series A funds are used to deeply connect traditional finance to the blockchain, rather than incentivizing isolated order books. Funds flow from venture capital into a Cayman entity, then into liquidity routing, RWA varieties, and cross-margin engines; benefiting are traders who can trade crypto and commodities with a single account while avoiding high fees, as well as traditional market makers providing hedging; pressured are perpetual exchanges relying on listing incentives to maintain thin order books, profiting from fees and funding rates.
On-chain public metrics show that trading has entered the top tier of on-chain perpetuals, with open interest still significantly lower than Hyperliquid, indicating that traffic is migrating towards the broker model, while depth still relies on off-chain hedging.
Source: Public Information
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Lucas Schuermann is not new to treating trading infrastructure as a sellable company. After teaming up with Edward Yu in their Columbia University dorm, they first turned their campus quantitative group into Qu Capital, which was sold to Barry Silbert's Digital Currency Group in 2019, immediately entering one of the largest OTC desks in crypto at Genesis; there, they reached the level of Vice President in engineering and quantitative roles before leaving, using proprietary profits instead of issuing tokens to sustain the protocol. In public interviews, he admitted to almost immediately regretting selling the fund, indicating that what they truly wanted to control was not fund performance, but the clearing, margin, and hedging pipelines themselves. Genesis later ceased operations in 2023, with the two exiting two years early, effectively withdrawing from the most vulnerable clearing link of centralized brokers to create their own settleable bilateral contract layer.
The capital path is also not about "recreating an on-chain exchange." The seed round of approximately $10.3 million was closed by Bain Capital Crypto and others at the end of 2021, with early funds sustaining proprietary trading; the Series A round of about $50 million was led by Dragonfly, with Coinbase Ventures re-entering, aimed at bringing CME and NYSE-level market maker quotes onto Arbitrum's RFQ, rather than issuing token subsidies to external market makers. OLP, as the sole counterparty, first absorbs user direction, then hedges back to traditional exchanges and commodity and index market makers, leaving the spread while reducing fees to zero. This combines Robinhood-style retail customer acquisition with Genesis-style OTC hedging on the same clearing pipeline: venture capital provides the pipeline construction cost, traders provide the direction, and traditional market makers provide the depth.
Industry positioning is closer to the relationship between Interactive Brokers and Robinhood with NYSE seat holders, rather than dYdX or Hyperliquid with Binance. Hyperliquid has proven that on-chain order books can yield real transactions; Variational's judgment is that cold-starting order books cannot solve for commodities like gold, oil, and unlisted equity, and must integrate existing TradFi ledgers. Similar cases in TradFi are brokers that "do not build exchanges, only do routing": Interactive Brokers connects multiple markets with a single account, while Robinhood exchanges order flow for zero commissions. Variational is currently in the stage of expanding from crypto perpetuals to commodities and RWA, while also reserving for institutional OTC layers, and is not yet in control of pricing power, but is competing for entry points.
Structurally, this represents a shift in pricing power. The perpetual market was previously controlled by exchanges that simultaneously managed matching, listing, funding rates, and clearing; the broker model outsources matching to existing depths, changes fees from explicit to implicit spreads, and shifts listing from "first sustaining the book" to "first taking the order." The mechanism is: whoever controls the hedging outlet can drive the marginal cost of new varieties close to zero, thus reclaiming user accounts from multiple platforms back to a single margin. If exchanges continue to rely on incentives to maintain thin books, they will lag in product expansion; market makers will shift from "being hired by exchanges to quote" to "being called by brokers to hedge." The reason for this change is not narrative, but the publicly acknowledged gap between on-chain order books and CME-level depth, still referred to as an order of magnitude difference.
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The more frequently the endgame is questioned, the more willing the team is to expend their efforts.
Those who do not build markets often take the market entry points first.
Where fees approach zero, pricing power shifts to spreads and hedging pipelines.