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Chen Yong: Pionex Leads You into the Era of Smart Trading

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Chen Yong: Pionex Leads You into the Era of Smart Trading

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Serving Rational Investors

How did Bloomberg report on Pionex? Quoting a sentence: "Pionex's trading bots can help users overcome human weaknesses and become rational investors." We all know that trading goes against human nature, yet all trading products cater to human tendencies. Users tend to favor high leverage. We know that in the trading industry, it started with spot trading and later added contracts, some with leverage of more than 20 times and even up to 100 times. I once heard a leader of an exchange say that he absolutely would not provide contract products to users, but he still couldn't resist the demand and ended up launching contract products, with the highest leverage among all exchanges.
We know that many users entered this industry because of Bitcoin. Bitcoin has risen thousands of times in the past decade, so everyone is looking for the next Bitcoin. Therefore, all exchanges claim that their mission is to help users find the next Bitcoin. So we see tens of thousands of projects claiming to be the next Bitcoin, using the possibility of rising thousands of times to attract ordinary investors to invest. Is this approach right? Definitely not. Why do all financial innovations today tend to cater more to human nature? Because human nature is inherently greedy. However, we know that this is not right. We hope that our users not only avoid leverage trading but also should not go all-in even when trading spot, but rather practice proper position management.
We hope users understand Bitcoin, but also realize that in this industry, the chance of finding the next Bitcoin is slim. How so? Let's take the internet industry as an example. We know that in the past 30 years, fewer than 10 companies truly became foundational services in this industry. That is to say, in the blockchain industry over the past decade, only one Bitcoin has emerged. Is there a possibility of another Bitcoin emerging in the next 2-3 years? Yes, but it is very small. So before chasing the hype, we need to understand that the probability is actually very low. The whole Pionex actually wants to do one thing: Can we better convey these correct ideas and good investment concepts to traders?

Pionex's Achievements

Take a look at the current distribution of Pionex users. Pionex has achieved good results globally without any channels or marketing efforts. Let's take a look at the distribution of our users: firstly, U.S. users, as U.S. investors tend to be more rational. Secondly, European users, who are also more rational. Thirdly, our Taiwanese users. Among all our users, we want to focus on our Taiwanese users. Taiwanese users are actually based on a group between less developed or more developed areas. We know that investors in Europe and America have gone through a long financial education, making them relatively rational. Conversely, users from less developed countries tend to be emotional, but Taiwanese users are somewhere in between rationality and emotion. Therefore, although Taiwan ranks third in our user distribution, our performance in Taiwan has achieved industry-leading results. This also reinforces a point that when our product truly satisfies users, especially the needs of rational users, you will find that users will pay more attention to you with better word of mouth.
We can see the scale of our product's user usage, with a monthly trading volume of $5 billion and approximately ten thousand traders using our platform every month. More importantly, the average number of trades per person is about 15,000, which amounts to around 500 trades per day. We know that trading manually 500 times a day is nearly impossible, so such high-frequency trading can only be achieved through tools.

Pionex Redefining Trading

Let me introduce myself. I am Chen Yong, the founder of Pionex. Before starting a business in the blockchain industry, I was in the internet industry, mainly focusing on consumer products. When I entered this industry, I went through a period of struggle because we all know that the best way to create products is to cater to human nature and meet user needs. However, when it comes to trading products, if they cater to human nature, they can make users extremely greedy and become products that satisfy their greed.
Looking at the products in our industry today, they are quite similar. Let me share two points: First, what are the characteristics of these competitor products' interfaces? All trading interfaces only offer simple buy functions to users. Second, each interface provides buttons for 25%, 50%, 75%, and 100%, meaning that when you invest a large sum of money, the products encourage you to go all-in. However, we know that good trading involves not just buying, but also selling. A complete trade involves both buying and selling, and more importantly, position management. Therefore, our interface is the most complex because we aim to convey a different concept to users within the interface: when you engage in trading, a trade is only complete when you sell or buy again, forming a complete trading loop. We want to present a different idea to users: when you buy an asset, the trade is only complete when you sell it. This presentation makes our product more complex compared to others, more contrarian, but it aligns better with the logic of long-term investment profitability.
One phrase that comes to mind is what Peter Thiel said: "The future world will definitely consist of humans and machines because humans lean towards emotion and decision-making, while machines lean towards execution and logic." Therefore, in the future, everyone may become a great investor, but all trading processes will be executed by machines. This reminds me of the internet; today the entire internet has a term called self-media, which allows everyone to become their own media. This concept of self-media would never have emerged 30 years ago, but why do we have self-media today? It's because technology empowers everyone in the internet space to have the basic attributes of some media, allowing every ordinary person to create unique content.

Pionex's π

You can see that "π" is quite similar to Pionex's "P". Why do we like this word? There are several reasons. First, we hope that our Pionex can provide users with good trading skills through existing tools. More importantly, it pays tribute to this industry. Today, what we are doing is blockchain, and the essence of blockchain is the financial industry, and the essence of finance is trust. Before the advent of blockchain, all our trust was based on assets. However, with the arrival of the blockchain era, all trust will rely on data and algorithms. What makes Bitcoin so attractive? The core essence is cryptography at the foundation. Therefore, through the name "Pionex," we pay tribute to this industry.
Take a look at our logo: on the left, it looks like "π," although many people say it looks like a phoenix, but in reality, it is "π." The first two letters of the English name Pionex are Pi, and we hope Pionex will be the preferred trading product for the next generation of users.

Pionex: Self-Disciplined and Embracing Regulation

Today, as practitioners in this industry, the first thing we need to do is self-discipline. So from the first day of Pionex's establishment, we have been thinking: what is our purpose? Who do we really serve? Our ultimate conclusion is that we must serve investors, we must create value for investors, and then realize our own value. So within the entire Pionex system, we have always positioned ourselves as a securities firm. We never issue tokens, nor do we list new assets. To comply with regulatory requirements, we do not engage in OTC. Instead, we focus more on continuously innovating products around satisfying investor value to gain user reputation. In this regard, we are more self-disciplined compared to similar competitors.
Secondly, throughout Pionex's development over the past year, although we have achieved good results in the overseas user base, our investment in the overall market and channels has been close to zero. Our product growth has mainly relied on word of mouth, making the company's operational efficiency extremely high. This has allowed Pionex to achieve positive cash flow in less than a year since its inception. More importantly, throughout Pionex's development process, we have been continuously meeting the compliance requirements of each country or region. Shortly after our establishment, we obtained the MSB license in the United States, and earlier this year, we applied for a license in Singapore, which is currently in the review process.

Grid Trading for Buying Low and Selling High

Firstly, grid trading, our core functionality. It helps users achieve high-frequency arbitrage within a range, allowing them to buy low and sell high. Let's take a look; this trade should be shared with everyone at every talk. It's the same trade, but the returns differ. Let's take a look at the returns until yesterday. I recall that during my last presentation, the return was 83%, but today the actual return is 91%. The date is March 13, and it has been running for 224 days. We've given this trade a title - the Heaven and Earth trade. Why is it called the Heaven and Earth trade? Take a close look at the top right corner; what is the range it opened? It's from two thousand to twenty thousand. At that time, the trader opened this trade when Bitcoin was experiencing a sharp drop in the March 12 market, causing widespread panic. In reality, the trader did not know how low Bitcoin would fall, but they had a hypothesis. Assuming that if Bitcoin fell to 2000, they would go all-in on Bitcoin. If Bitcoin rose to twenty thousand, they would sell all their Bitcoin because they believed the next bull market had arrived, so they opened a 2000 to 20000 Heaven and Earth trade.
Below is a curve; take a closer look. This trade's curve from March 13 to date, showing the points on the curve. What do these points represent? The red points indicate helping users buy low, and the green points help users sell, thus achieving arbitrage. Therefore, the grid, to some extent, gives users the courage to place trades because we all know that when placing trades, everyone hopes to find the lowest point to buy and the highest point to sell. However, in the wait for the lowest and highest points, one often misses the best opportunities. Today, through the grid, the difficulty of timing is reduced. The reason the user dared to open the Heaven and Earth trade at that time was that they abandoned their fixation on identifying the lowest point. They thought that as long as Bitcoin didn't drop below 2000, they would gradually buy Bitcoin. Therefore, at that time, the grid gave them the courage to open the trade.
When users use our grid, they will see that the Heaven and Earth trade displays the position at every moment, showing users the proportion of the two assets they hold. Because grid trading involves range trading, it doesn't just involve one asset; it actually involves two asset allocations. This allows users to trade with a reduced difficulty in timing from the past single all-in trades to proper position management.

Unilateral Oscillation with Infinite Grid

Some may argue that grid trading is suitable for a range, but most coins actually experience unilateral trends, and even unilateral oscillations, either rising or falling. So, do we have better tools for this scenario? Besides grid trading, we also have infinite grid. What does infinite grid mean? As the name suggests, infinite grid transitions from upper and lower ranges to only having a lower range; meaning the upper range is infinite. Therefore, with infinite grid, users can not only profit from oscillations but also benefit from a unilateral upward trend.

Smartly Chasing Highs with Band Tracking

Users may wonder, what if I'm trading in a rapid upward trend rather than an oscillation, is there a good tool for that? Yes, band tracking. I'll touch on the trading concept in the end. We know that when the price of a coin is rapidly increasing, users are most worried about chasing highs and getting stuck. Thus, many users are hesitant to chase highs. However, when they hesitate, the price continues to rise. So eventually, they will give in and chase highs, only to find out they bought at the peak and got stuck. This is a common issue in manual trading.
With band tracking, when you choose to buy on volatility tracking, it prompts you to set a high point retracement ratio, meaning you determine your loss retracement ratio, such as 5% or 10%. What does this 5% or 10% mean? It means that when the price retraces 5% or 10% from the peak, I will help you sell, ensuring that your maximum loss won't exceed 5% or 10%, and as the price continues to rise, the peak also keeps rising. The band tracking tool helps you sell at a sub-high point. Particularly when you're chasing some assets, band tracking helps you define retracements as you chase highs, ensuring your maximum loss won't exceed a set percentage and helping you capture unlimited profits as the price continues to rise.

Three Values Provided by Trading Tools

Summarizing the three values currently provided by trading tools:
Firstly, users have passive and effective position management because it's challenging for regular investors to manage positions when trading manually since it doesn't align with human nature. When you choose this type of coin, you decide to buy and are more likely to go all-in because it's an expression of your confidence. Similarly, when selling, you may also go all-in. Today, with Pionex's grid trading, it allows you to passively manage positions and prevents you from going all-in at once.
Secondly, it treats buying and selling as a complete trade loop. Traditionally, investors often either only buy or only sell. During this process, their selling points are often influenced by market sentiment fluctuations. Either they are reluctant to sell when the price rises, or they continue buying as the price falls until they sell at the lowest point. Within the trading tool category, we not only solve the timing problem of buying and selling but more importantly, treat buying and selling as a holistic consideration.