Dear Pionex Users,
Time: 28 April 2022,12:00 noon (UTC)
Pionex hosted an AMA (Ask-Me-Anything) session with Ryan, Structured Product Manager of Pionex in the Pionex Group.
Q: Hello! Can you introduce yourself to the Pionex community?
Ryan: Hi, I’m the Product Manager of Pionex’s structured product. Today I am very happy to share my understanding of Pionex’s structured product.
Q: Can you tell us why Pionex is launching Dual Investment? What does it do for us?
Ryan: Pionex structured products are a way to generate passive income for crypto holders.
Our structured products let you use a cryptocurrency such as BTC to earn yield. This is comparable to Staking, yield farming, or buying Bonds. Staking often returns less than 8% APY while Bonds even less. OUR structured products can return anywhere from 10% APY to over 100% APY depending on your risk tolerance. Pionex structured products offer great asset safety and higher returns compared to the others.
Personally, I am also using Dual Investment to gain more BTC and ETH. 😄
Q: That sounds really great😍 So what are the principles, risks, and benefits of this product(Dual Investment)?
Ryan: Wow that’s a good question. Let me use two examples to show how the Dual Investment Product works:
Example 1: Invest BTC for BTC-USDT Dual Investment (Aiming to gain more BTC or sell BTC at a good price)
Target Price: 40,000
Delivery Date: 1-MAY-2022
Yield: 0.6%
Annualized Yield: 31.29%
Investment Currency: BTC
Assume that the current time is April 24, the BTC price is 39,000, and the user chooses to invest 1 BTC in Dual Investment due in the week.
At 1-MAY-2022:
Scenario 1: If the Settlement Price of BTC on that day is lower than the Target Price of 40,000 USDT, the user will get 0.6% of BTC, that is, 1 * (1 + 0.6%) BTC, that is, 1.006 BTC.
Scenario 2: If the Settlement Price of BTC is higher than the Target Price of 40,000 USDT, the end user will get 0.6% of USDT, that is, 1 * 40,000 * (1 + 0.6%) USDT, that is, 40,240 USDT.
To sum up, after the product expires, the user will always get 0.6% of the income, the only uncertainty is the currency of the return, which depends on the BTC/USD settlement price at the time of expiration.
For me, I usually choose a target price difficult to reach, which provides me a high probability of gaining more BTC. The corresponding risk is to sell my invested BTC at the target price, which is OKEY for me if the target price is carefully selected.
Example 2: Invest USDT for USDT-BTC Dual Investment (Aiming to gain more USDT or buying crypto with a good price)
Target Price: 35,000
Delivery Date: 1-MAY-2022
Yield: 0.6%
Annualized Yield: 31.29%
Investment Currency: USDT
Assume that the current time is April 24, the BTC price is 39,000, and the user chooses to invest 35,000 USDT in Dual Investment due in one week.
On 1-MAY-2022:
Scenario 1: If the Settlement Price of BTC on that day is lower than the Target Price of 35,000 USDT, the user will get 0.6% of BTC, that is, (35000/35000) * (1 + 0.6%) BTC, that is, 1.006 BTC.
Scenario 2: If the settlement price of BTC is higher than the Target Price of 35,000 USDT, the end user will receive 0.6% of USDT, that is, 35,000 * (1 + 0.6%) USDT, that is, 35,210 USDT.
To sum up, after the product expires, the user will always get 0.6% of the income, the only uncertainty is the currency of the return, which depends on the BTC/USD settlement price at the time of expiration.
Q: Many friends, like me, have not touched this product before. How do you think we should start the first step?
Ryan:As a newbie, I would suggest you use Pionex’s Trial Fund to get started. You don’t need to use your own money to create your first structured order.
Q: What is Trial Fund? Will it let me lose my money?😢
Ryan: The Trial Fund is a time-limited activity offered by Pionex. Those who haven’t created their own order in the structured products can use 1,288 USDT to create their own order. You don’t need to risk your own money with your trial order.
If the settlement price is below your selected strike price, you will get drawable BTC as a result; If the settlement price is above your selected strike price, you will get drawable USDT to your account.
Q: Haha, tested with Pionex’s money, sounds really good! 😍So how do we get it and use it correctly?
Ryan: Here is a tutorial showing step-by-step creating your own trial order.
https://www.pionex.com/blog/dual-investment-1288usd-trial-funds/
Free-Ask from Pionex Group
Q: What if the target price meets but the expiration is not yet finished?
Ryan: Just nothing happened. The dual investment will only use the settlement price when the structured product expires.
Q: I have noticed that similar products are offered on other exchanges, so what are the advantages of Pionex?
Ryan: Well, in a word, Pionex’s dual investment has the highest APR.
Q: If we select always the highest APY and reinvest that no matter the coin we get will the gains eventually cover the losses or is hard to know?
Ryan: That’s not a proper strategy. Let’s say we first invest USDT with a target price of 40,000 into dual investment based on BTC.
If the price of BTC dropped to 38,000, then we bought BTC with a price of 40,000. What we should do is reinvest BTC with a strike price of 40,000.
Q: Pls explain abt the strike price?
Ryan: When you invest with USDT, the strike price is like the buying price, which means you need to buy crypto if the settlement price is lower than your selected target price.
When you invest with cryptos like BTC or ETH, the strike price is like the selling price, which means you need to sell crypto if the settlement price is higher than your selected target price.
Q: What’s the difference between yield and annualized yield?
Ryan: A quick answer is: Annualized Yield = Yield / (Expiry Date – Today) * 365
The precise answer is the Annualized Yield = Yield / (Expiry Date converted to seconds – Today’s time converted to seconds) * 365 *3600
Q: Can this product automatically compound interest?
Ryan: Nope, you need to reinvest by yourself when products are settled.
Q: This can be a good choice for holders that want to increase their bags right?
Ryan: Yes.
Q: Any special advice or strategy you can share with us?
Ryan: I think the most important thing to using Dual Investment is to memorize your converted price.
For example, If I bought some Bitcoin with the price of 40K, then I need to sell with a price higher than 40K.
Q: I am curious about where does the fixed income of this Dual Investment come from?
Ryan: Then we need to talk about option strategies, options strategies are very difficult to understand, that’s we packaged them into the structured products to make them easier to understand.
Q: When I use the Trial Fund, how long does it take me to get the interest. Where can I see the money?
Ryan: No longer than 2 days, You can claim your earnings from a Trial Fund when products expire.
Q: You need to complete some steps to get the trial fund profit right?
Ryan: Yes, you need to finish KYC level 1 to claim the Trial Fund profit.
Q: Would you rather use a Structured product rather than normal bots like grid or DCA?
Ryan: It depends on how I predict the market, for example, I will choose to use the dual investment to gain some BTC and ETH these days as I think prices will keep at the bottom these days.
Q: What are the Pionex criteria to list coins in Structured products?
Ryan: Hot coins, you can expect to see more than 30 coins in structured products in the future.
Q: If I want to hold a coin for the long term, Should I use the Covered Gain rather than the Dual Investment?
Ryan: You can use either as they are the same.
Q: Ryan I want to invest in dual investment, how much does the minimum amt at least give some positive yield? 🤔
Ryan: For USDT it is 100; for ETH it is 0.01.
Q: Is there a group about Dual Investment?
Ryan: Yes, we have a telegram group (https://t.me/PionexTrialFund)