Panxora.io has long been established as the leading venue where holders of cryptocurrency can use their assets to invest and trade in Stocks from leading global stock exchanges. Covering in excess of 250 global stocks Panxora boasts a broader coverage than any other cryptocurrency based venue.
This year (2019) Panxora have adapted their customisable ‘trade desk’ developed over four years of serving crypto-traders in the Stock to Crypto swap market to provide a range of features to token enthusiasts that aren’t available on any other token exchange.
Speaking to Gavin Smith, Panxora CEO and Digital Finance News contributor we asked why Panxora was entering the crowded ERC-20 token trading market?
“Over the past year even tokens with brilliant futures are finding it a challenge to meet their subscription objectives which are needed for them to execute their plans,” states Smith “this has left token founders with the difficult choice of taking a significant chunk of that necessary capital and paying for a listing on an established exchange, or paying much less to list on a DEX which is both less professional and lacks sufficient liquidity to provide a two way market for the token which can cause a loss of confidence. Our goal with this launch is to use the existing Panxora exchange which has the speed and flexibility to be admirably suited for token trading to address this gap in the market. We also think it is short-sighted to charge excessive fees for listing a token on an exchange.”
What Advantages do you believe you have over other exchanges? “First, and foremost is Panxora’s ability to provide liquidity, both through our existing traders and through our Fund and proprietary trading group. We are going to focus on listing tokens that we have an interest in and think have potential. Because of this Panxora’s proprietary traders can act as market makers, so they will be available to buy the token when sellers initially enter the marketplace. “
Does that mean you support the token at the issue price? No, the Panxora prop traders act as market makers, taking positions buying the token on the way down and holding a book which they then sell when buyers later enter the market. This means there is a two way market in place immediately when sellers enter the market. This can help prevent panicked selling smoothing price action.
What other unique features does Panxora have? Panxora caters both for what I would call retail traders and a more professional marketplace. Most token traders used to DEX trading where they only have the ability to cash trade, but on Panxora we provide leverage trading facilities to buy tokens. We also support the ability to short a token on the exchange. This seems to be counter-intuitive if your goal is to help with the acceptance of a token; but short sellers actually provide a valuable source of liquidity in both up and down markets.
How does the short selling work, what if there are no tokens available to deliver to the purchaser? Remember, Panxora has a team of prop traders making book on tokens we choose to list, the exchange automatically borrows from this house position to deliver shorted tokens. In this way we can support professional short sellers and also ensure that tokens can be delivered to the purchaser. We are also working on an extension to this model where long term holders of tokens can earn extra revenue by lending their tokens to short sellers .
Doesn’t short selling in the token market make the initial sell-off even worse? Professionals look at the big picture, so while in the short term it may be that short sellers provide downward pressure during initial trading. Remember, those short sellers aren’t getting out of the market, their plan is to buy back the token (to go flat or get back in) at a lower price when they believe the market has fallen enough. Our experience of offering this capability with stocks and larger cryptocurrencies is that when markets are in free-fall it is frequently the short sellers that are the first to enter and start buying an issue. This provides the pause in the downward price that gives buyers confidence to potentially re-enter the marketplace.
You mentioned that you were looking at providing a token lending facility to short sellers where token holders can earn extra revenue, are there other ways to generate interest? We don’t offer interest payments to token holders on our site but what we do provide is the ability to use tokens as collateral to trade stocks or to trade other cryptocurrency pairs.
How does that work? Suppose a trader holds $1,000 of an ERC token. We allow them to take a position of up to $2,000 worth of stocks or up to a $2,000 leveraged crypto position. Same as with token trading, they can use that margin to go long or short any of the markets on the exchange.
Can you give an example of both a stock and a crypto trade? Sure, let’s say a trader has $1,000 worth of tokens on the site. That $1,000 can be in any combination or a single token, anything we support. If the $1,000 is not securing any other trades it can be used as collateral. The trader may believe that Facebook was going to decline. Facebook is trading at $150 so they could sell up to 13 Facebook shares($1950 worth of stock). If the price declined from $150 to $130 and they coved the short, they would make $260 on the trade (less commission and costs). This profit is then swept into BTC when the trade is closed and would be credited to their account in bitcoin. Crypto pairs work in a similar way; the trader could buy up to $2000 worth of any crypto (such as BTC trading against USD) and benefit from any price increase that BTC makes as well as retaining the value of their own tokens.
What tokens are you planning to list? Our first batch of tokens include AGI (Singularity.Net), TRX (Tron), IAG (Iagon), XAI (AICoin), ENJ (Enjin), FRP (FORCE Protocol), and QKC (QuarkChain).
How many are you planning to list? Our target is to start by listing 2 additional tokens every week. We’ve started with a small number of tokens because we knew these features would attract a large number of new traders and we wanted to make sure we retained a good level of service.
I see you recently released a bullish forecast for the bitcoin price in the New Year – as it’s that time of year, where do you see the bitcoin price at the end of 2019? As you mention, I’m bullish on bitcoin in the medium term. I expect over the next 6 months to see the price of bitcoin rise to between $6000 and $8000. After that the picture becomes a little less clear but by year end I would probably say $7000 is a reasonable target with further gains in 2020.