Nova Markets funding spat: Dragonfly’s Tom Schmidt calls it “scammers”
Dragonfly Capital GP Tom Schmidt sparked a public backlash on June 5 by calling the Nova Markets team “huge scammers” one day after the on-chain perpetuals exchange announced its funding round. The round named major trading and market-making firms including Wintermute Ventures, Cumberland (DRW), and GSR.
About 52 minutes later, Schmidt partially walked back his statement. He retracted the part implying concerns about certain legacy investors’ relationships, but he kept criticizing Nova Markets’ team, describing their conduct as a “classic bad faith maneuver.”
Nova founder Tiago Barbosa responded by framing Schmidt as a former supporter turned critic, and he disputed Schmidt’s earlier claims about a prior project called Valhalla.
What Nova Markets is building: the team is developing a permissionless perpetual exchange based on Hyperliquid’s HIP-3 framework. The goal is to let anyone create new perpetual markets without centralized listing approvals, aiming to expand beyond typical crypto pairs into assets like pre-IPO equities, commodities, and potentially prediction markets.
Why traders should care: the incident highlights how top crypto funds conduct (and publicly debate) due diligence. It may briefly affect sentiment around Nova Markets and similar “permissionless listing” narratives, but there’s no direct token or protocol-specific shock described in the article.
Neutral
The news is more about reputational and diligence optics than fundamentals. A Dragonfly Capital GP’s accusation against Nova Markets, followed by a partial retraction 52 minutes later, signals uncertainty about whether the criticism was evidence-based or overbroad. Nova’s permissionless-perpetual design (HIP-3 on Hyperliquid infrastructure) is an implementation thesis, not a token catalyst mentioned here, so direct price transmission is limited.
Short-term: Traders may see elevated volatility in sentiment around Nova Markets and other “permissionless listings/perps” projects, similar to past moments when high-profile fund managers publicly questioned portfolio diligence (often causing short-lived risk-off chatter, FUD spikes, and delayed positioning). However, without concrete protocol failures, hacks, or regulatory actions in the article, sustained selling pressure is less likely.
Long-term: The dispute may affect how the market prices execution risk and governance-like risks in permissionless market creation. If investors tighten selection or if public scrutiny deters counterparties, Nova Markets could face slower adoption. Conversely, the partial retraction may also reduce perceived credibility damage and allow the project to refocus on product delivery.
Overall, this looks like a sentiment-driven headline for Nova Markets rather than a structural market shock.