TRON 4.0 Online Conference: Panel Discussion on How to Build Brand New Use Cases for the Digital Finance Ecosystem Through Crypto Exchanges

>> Angela: Exchanges have been playing a certain role in decentralizing the ecosystems. To users, crypto exchange is a service platform that closely interacts with them.

Exchanges are in a good position to collect the user’s real needs for financial service. Which in return, helps set the future direction of a decentralized ecosystem.

Coming next, we are pleased to have Alicia Kao, Tina Yuan, Edward Lee, Lennix Lai, Danish Chaudhry and Tom Albright. The topic of this panel is “Brand new use case for digital finance built by crypto exchanges”.

Welcome everyone! Thank you so much for joining us. So first, can you introduce yourself in one minute. Maybe, from Alicia.

>> Hi, I’m senior partner and in charge of the high net value clients and my team is the VIPs over twenty countries so yeah, it’s me Alicia.

>> Thank you! Tina? Could you open your mic?

>> Tina: Hi, can you hear me? Okay. I’m Tina from Gate.io and I’m vice president of Asia Pacific region and I’m very glad to be here today.

>> Thank you, Tina and Edward?

>>Edward Lee: Hi, everyone! My name is Edward Lee and I’m the VP at product and business develop at POLONIEX

. It’s really great to join and share what the POLONIEX Team has been doing through the time.

>> Moderator: Thank you! And Lennix?

>>Lennix Lai: Hi, everyone. My name is Lennix. I’m from OKEx. Currently, I’m responsible for the global institutional developments across the board. Thank you.

>> Moderator: Thank you. The next is Danish.

>> Danish Chaudhry: Hello, everyone! I’m CEO of The Bitcoin.com Exchange. We’re probably the youngest exchange on the panel. We have been around for the last ten months and we’re growing very rapidly and excited to be here.

>> Moderator: Thank you! The last guest is Tom.

>> Tom: Hi, everyone! I’m Tom and I’m the CEO of Bittrex Global and I’m excited to be here with you all.

>> Moderator: Thank you so much. So my first question is,

Currently there are various financial derivatives like contracts, futures and index etc. available on crypto exchanges. Which product is the most promising and stands the best chance?

From Alisha, thank you!

>> Alicia: Okay, Since the birth of Bitcoin in 2008, crypto have gone through 12 years. Over the past years, we are happy to see that crypto have been gradually accepted by the public from being misunderstood, and now are even changing the rules of the game in the financial industry. Crypto trading has also developed from crypto-to-crypto trading only to various derivatives including futures, options, indexes, etc. Among these derivatives, the trendiest of 2020 is undoubtedly the futures trading.

In the latest research report on the crypto derivatives market released by TokenInsight, the trading volume of the crypto derivatives market soared 314% in Q1 2020 compared with Q4 2019, of which futures trading accounted for the largest proportion. The transaction volume in the first quarter has exceeded 2.1 trillion US dollars. The rise of futures has multiple reasons. First of all, for new investors, futures trading is simpler, users do not need to study complex and difficult-to-understand whitepapers, and futures support both long and short; while professional investors can also use futures to hedge risks or do speculation, allowing a more diversified investment strategy.

In addition, bitcoin futures are also the first crypto-related derivatives product accepted by traditional financial institutions. Both CME and CBOE have launched bitcoin futures products, although now the latter has closed bitcoin futures trading. Therefore, I think that among these financial derivatives, futures have the best chance to go to the mainstream world.

To contribute to the development of crypto futures market, KuCoin announced the rebranding of our futures trading platform, from KuMEX to KuCoin Futures, and it is also one of our core businesses in 2020.

Here is my answer.

>> MC: Okay, thank you so much! There’s a lot of information to us for the process. Okay. And the next is Tina. Could you please share with us your opinion.

>> Tina: Sure! First, I must admit that I am amazed at the fast-growing pace and development of the cryptocurrency financial market in recent years. In the first two years, there were very few derivatives on the market, and investors were concentrated on C2C trading. Now, futures are getting more popular and derivatives are becoming more abundant as well as perpetual contracts, future contracts and ETF leverage tokens. The appearance of these products is a symbol of a booming market.

In fact, among the many derivatives, I am most optimistic about contract. This product neither require consumers to hoard, nor do they need to borrow money from the market. Investors can directly enter the market with existing funds, which is convenient and the barrier of entry is considered to be low.

However, data have predicted that futures will gain more popularity and attention. Statistics have shown that, except for the slight decline in the trading volume of the fourth quarter in 2019, trading volume of the entire cryptocurrency futures market in 2019 has been steadily increasing. In the first quarter of this year, the total futures trading volume reached 21.048 trillion US dollars, which has increased significantly by 314%, comparing with the 2019 total quarterly average. Last year, trading volume of the cryptocurrency futures market was about 20% of the volume in spot trading market. But this year, the total trading volume of futures in the first quarter has reached to more than 33% of the spot trading volume. In the near future, it is expected that futures trading volume will continue to grow and even likely to exceed spot trading volume.

Of course, as a world’s leading exchange, gate.io has always given its users more choices regarding to product development. In the time ahead, we will be bringing more financial derivatives products to our followers. thank you!

>> MC: Thank you so much, Tina. And let’s go to Edward.

>> Edward: Sure. Yeah, so I think there were a lot of great comments. I think there definitely has been trends, where it started with spot, and then margin trading, and then futures, index and options. Currently, futures has been getting much of the spotlight, where futures is trading 3 to up to 20 times the volume in some exchanges compared to spot. In futures there seems to be a playbook that exchanges providing futures are now following to gain traction. For instance, it started out with a relatively new concept of perpetual swaps with collateral in BTC, and then the collateral starting to be collected in stablecoins and baskets of different currencies, now we’re seeing exchanges add new contracts for different assets continuously, while it was only Bitcoin and Eth, or maybe the top 10 tokens in the past. I think it’s in the growth stage right now for futures, and the popularity or spotlight will go around for other financial instruments, but eventually this will all become a variety of financial instruments for traders to use according to their preference and risk appetite whether it’s speculation or hedging.

They will becausically use it for their own purpose and they will have several options and also this spotlight and trend is basically giving the opportunities for these to — you will see the flaws and the improvements from the flaws and differents POLONIEX and other exchanges that belong to this panel.

And I think this is what is going to be growing.

>> MC: Okay, thank you so much! I also think we can get a lot of experience in traditional finance. So next, is Lennix, thank you!

>> Lennix: Yeah, I think as a matter of fact it has around 30 percent of the entire global volume across the board. And we do a lot of things, futures, all of the products, swabs and — also some options, listed options, precisely but if you ask me, people say in the last several years, we spend a lot in developing products just like developing the spot trading. So most of the time, it was spot trading. We know that doesn’t work. We need the trade off risk. But right now, I think I am a little bit worried about the industry wide problem that there are too many crypto exchanges that are offering one hundred times the average or even more that might potentially rapidize the underlying asset.

One of the major changes that allow the market to plan for liquidity. So I would say right now, most of the exchanges focus on futures. We need a more structural market, the rules and transparency across the market structure to make sure that the market will behave robust and stable. Thank you.

>> MC: Thank you so much! How do you like it on this question, Danish? Could you say?

>> Danish: Sure. Just echoing my colleagues, their thoughts as well. There are futures. there needs to be robustness and structural elements put in. Giving 250X times leverage is pretty high. Selling futures will play an instrumental part. Mainly because we think options are one of the products that will really also bring some of that retail value in. But from the bitcoin perspective, I think we’re very focused on giving the users their first steps into cryptocurrency and trading and using it on a daily basis as a thing. So with our ethos, we prefer products that help limit the risk of our customers. You know, future is great and leverage is great and all of the purpose is great and all of that stuff is GREAT.

We just don’t want the users to over leverage themselves and risk everything. So we recently just launched leverage tokens. We have 3X leverage. 3X long and shorts with a little bit of leverage, not too much risk and they’re just on the spot market. So those are some of the instruments that we’re using to educate the new users.

So I think those assets, I think, are going to be fairly crucial in getting the new users in and the new guys that are going in, you know, whoever is now just looking into cryptocurrency going from a traditional finance market or any other finance market and want to dabble in the derivatives, those products are the first steps.

We’re going to come out with other tokens as well which will allow you to capitalize on staking assets or capitalize in the top 25 or a basket of currency, so on and so forth.

So yes, the derivative side is excellent but from our ethos and brand perspective, we really care about educating new users.

>> MC: Thank you so much, Danish.

>> Danish: Yes, absolutely. Thank you! So I think the rest of the panel has really covered this fairly well and in quite a lot of depth. All of these products have pretty clear analogs in the traditional financial world so contracts, futures, indexes, and all of those sorts of things exist in the traditional financial space and there’s a natural progression as crypto matures and moves into both of those words and they start moving over.

You know, I think that’s important for worldwide adoption. It will be important for retail and mass adoption for those who are ininterested in investing in S and P500 index and move to the crypto index. It will help drive the mainstream adoption.

The crypto space, our industry as a whole is so incredibly innovative and creative. There’s all kinds of amazing products that can be built as DeFi gets bigger, as new tokens are being built, as new platforms are being built like TRON 4.0. The things people are going to build over the next year or two years that move past what we can do in traditional finance and give people access to brand new access that have never been seen before.

I think that’s going to be really incredible! That’s going to shine the spotlight on our industry so I am very excited about that more so than the existing products.

>> MC: Yes, we are all excited. Time is limited so I’m ask the last question, What’s the key role do you think exchanges play in building new use cases for the digital financial ecosystem? Let’s answer this question, maybe, one person in one minute, sorry, but we’re very time limited.

So first, maybe from Tom? Is that okay.

>> Tom: Sure, absolutely! So I think exchanges are uniquely positioned to offer access to new users for this ecosystem. We’re used to custody and a very safe manner, billions of dollars of assets and we’re used to allowing customers to on board and off board and we can handle fiat and crypto. We can do KYC so the difficult infrastructure has been in place. We have over 20 billion dollars worth of assets and have millions of customers and I think over a thousand different tokens. All of that infrastructure is there and it’s hard to build. That means new users can come into the industry and into different things, very confident their funds are protected, their identities are protected and that they can trust that we as a company will be behind them. And so it gives them a use to access new cases that are coming in as tokens and things like that. I think we’re uniquely positioned to provide that use case for users and to help the people who are building the use cases, get access to the users without having to rebuild the underlying infrastructure.

>> MC: Okay, thank you, Tom! Danish, how do you think about that?

>> Danish: Yes, definitely. We’re in a great place to provide the use case. As the ecosystem grows, we have to embrace the new technology and new platforms that are coming around. So anything around the DeFi space. Anything around Stablecoin, decentralized storage and so on and so forth.

I think we as centralized exchanges, definitely need to embrace them and allow our users to be able to access these services.

Yes, we do know we’re different from the indexs that you see because we’re large custodians and secured providers and we have fiat and we have security built in whereas, decks are each person their own sort of a thing.

At the same time, there’s the whole DeFi space that gives people use of their own assets. To build upon that and create a bridge that allows users, our centralized users to access all of the services in a safe and secure way.

>> MC: Okay, thank you, Danish! Next is Lennix.

>> Lennox: Oh, sorry. So I think as a role of the decentralized exchange, we can talk about an integration where the current Blockchain base, I think that you can think of it like a centralized exchange is more like the hub of the ecosystem. This is the other to gather users all in one single place.

This is a portal of resources and then all of the DeFi projects with the custodian, insurance and regulators and the brokers, they all think that a centralized exchange could be a partner for you to get resources to get users and volume and liquidity, even if it’s just simply to define the protocol.

If we’re looking for stable price oracle, you can just find it as the exchange price. To give the price oracle because it has been tested all over the world right now. You happen to need a lot more users just to integrate with, you can get more users, directly from this and the liquidity as well.

So I think the integration part would be — has to be free and has to be really interesting and innovative together in the sense that we need to work with it.

>> MC: Thank you, Lennix! Guys, we need to shorten our answers. The next one is Edward, thank you!

>> Edward: Sure, I will try to make it short. I want to portray on what Lennix said. So initially, I think this has a financial institution, or service, it is also a financial platform. So it will have the basics which is the custodial aspect of things where you have the wallets and you have the different types of financial instruments where the users will be able to gain profits in different types of ways which we covered in the first question.

However, I think this is something very similar to a lot of the patterns that we saw for online services or even PayPal. These platforms are becoming a gate way for not just finance but for everyday, third party services. So that basically, a third party could basically access the users and have seamless flow of fiat.

Very similarly the Blockchain technology in the exchange space together, collaborating has a very big role.

POLONIEX Is currently working with third parties to provide this technology and users to other service sites that are accepting crypto.

We’re trying to get crypto and more Blockchain technologies offered to our users and partners and basically connect the bridge. As Justin mentioned in his earlier keynote, we’re actually preparing one integration that is coming up this month with Wink.

>> MC: Thank you, and Tina, how about you?

>> Tina: Okay. Thanks Edward to remind me that your gate way to cryptocurrency is good. I think the roles of the exchanges in the ecology of digital financial field must be an innovative and the experimenter. Leading exchange in the industry, along with the strong technology strength and profitability operation experience and not only bring the premium assets to their investors but also rearrange a new digital assets portfolio according to the action needs of the investors and the continued innovation of traditional finance.

And all of this can have a huge impact on the entire cryptocurrency industry. That’s all, thank you.

>> MC: Thank you so much and the last one is Alicia.

>> Alicia: I will make it short. So in 2018, spot trading occupies a dominant position. At that time, we also focused on spot trading in early 2018. We achieved the leading performance of the trading system.

Meanwhile, we strived to improve the liquidity, matching efficiency and systems stability of the market so in last year, the staking economy became popular and we launched full acts to meet the needs. The first liquidity trading market has also been launched by POLONIEX.

To manage the liquidity risk of the stake assets. In 2020, this year, many users are interested in future trading and we introduced many new features on the platform.

So recently, everyone is talking about DeFi, right? So I think DeFi would be one of the most discussed topics early this month. We have also launched a beta net of credits — this is bitcoin test nets to build that is more decentralized financial applications can boom and prosper.

>> MC: Thank you so much. Thank you everyone! What an informative panel discussion. Thank you all for your insights. Thank you! And these experience and data, is all great for the Blockchain industry as a whole.