Exclusive: Compendium - Boosting the Trading Tool Space with PENDAX
From Private Use to a Company
When Jake Ballou and Sean Guthrie met in a Discord group for traders, they found themselves bothered by the same issue. They wanted an easy-to-use trading tool platform to help them simplify the trading process, but couldn't find an ideal one. So as developers, they decided to build their own tools. That's how Compendium was created initially.
"If it slightly inconveniences us, it probably does the same to somebody else. So let's fix it," Sean explains the ethos behind Compendium. At first, the team just wanted to build something for themselves that "would be more optimal than the current offerings on the market". The first product was a verified trading bot marketplace, which was just for private use among some friends. But after some beta testing and feedback from fellows, they decided to establish a full company and build more features so that more people could benefit from the tools, as they did. As the first outcome under the Compendium roof, the bot marketplace system was designed to include all fees and slippage that a user may experience, thus offering better data transparency than competitors.
Devs Help Devs
"We are offering PENDAX SDK publicly because there's a large need for developer tools within the ecosystem that focus on interoperability between major platforms," Jake said, "if you go to other popular repositories, like CCXT, which in our point of view is clunky. We've worked with it, and it can be outdated and inefficient. So we basically built PENDAX from the ground up to solve that issue. Everything is simplified, all commands are aggregated, and interoperability between exchanges is guaranteed. We wanted to do this because when you're building a tool for developers and for other projects to build on, you want to decrease their time to market so that you can increase their return on investment with time and money and everything."
What Does PENDAX Solve?
Sean gave a use case where PENDAX performed better than other tools they previously used. "I'm a big fan of grid trading, which is essentially capturing the movement of the price within a range," said Sean, "Companies like 3commas and all the exchanges themselves have begun to implement different versions of their own grid trading. But every single one of what I found is very limited in capabilities. We wrote one that doesn't limit you at all,"
He continued, "on 3commas, you can have a maximum of, I want to say, 100 orders. On Binance, you can have a maximum of 200 orders. They limit how far you can spread your orders out. What we do is basically remove all those limits. If you want to have 3,000 orders on Bitcoin between $1 and $200,000, you can do it. We structured the simple stuff that people don't really think about. We're opening up this wide arena. People should be able to build what they want to build and should be able to trade how they want to trade. We are removing a lot of arbitrary boundaries that don't make any sense."
But the things above are probably not what Jake and Sean are most proud of. When asked about the speed of PENDAX, the duo laughed. High latency was one of the team's biggest complaints when they used other solutions before. "There was a delay when you sent a trade. It didn't pop up for a good minute." But with PENDAX, "Latency is nil. You'll receive order book data as fast as it is supposed to." Jake answered.
Taking the PENDAX integration with Compendium platform as an example, it runs through a proxy network that handles offloading tasks to the server that's closest to the exchange servers. The system can analyze the load on each of the servers and redirect the traffic to the closest one with the least load on it.
"And because our platform has been designed to be as efficient as possible, and we don't have to depend on a lot of the extra clunks that exchanges do, most of the time posting through PENDAX itself is faster than trading on the exchanges' UI." added Jake, "When we talk about speed, PENDAX is speed."
One more good thing about PENDAX is that the capabilities are completely free to use. No subscription is needed. Compendium earns money as a brokerage partner of the exchanges integrated with PENDAX, receiving rebates on volumes posted on the exchanges through PENDAX.
The PENDAX SDK does come with a license of agreement because it connects with the exchanges. "Every example that comes on top of it that we released publicly within the Github repo is open source," Jake said, "it's just for legal purposes. It's like saying, 'hey, don't use it to cause harm’."
Regarding security, the team noted that whoever develops on PENDAX should be in charge of their security when storing any information, as "PENDAX itself does not store any data." In Sean's words, "we made the highway, and it's up to the developers to drive down it."
At launch, PENDAX integrates with four major exchanges: FTX, FTX.US, OKX, and Bybit. This is what Jake called the first phase of exchange integration. In Phase 2 and Phase 3, PENDAX plans to onboard more exchange partners, with big ones like Binance, Bitmex, Huobi, Gate, and others in sight.
Although PENDAX is mainly offered to developers, Compendium also has retail customers in mind. Alongside launching PENDAX, the team is also launching the updated Compendium platform on October 31st, which is Compendium V3. The old offerings will sunset, and the new tools, including trading bots, customizable automated strategies, and social trading features, will be powered by PENDAX, so that users with no coding background can take advantage of PENDAX. Compendium also wants to use the new platform to showcase what can be built on top of PENDAX.
Ultimately, Compendium's goal is to launch what it calls the "PENDAX Terminal'', which "will power a fully native exchange interface with every functionality, every example code and everything we've built in one place, where you can trade all exchanges within PENDAX on one UI with minimal latency", as Jake explained. This project is already under development and is likely to go live in Q2 2023.
As bearish as the current crypto market goes, the Compendium team is pretty calm. "If you have enough time and patience, then volatility is your friend," Jake said, "As a trading tool company, you have to be emotionless about the price at the end of the day. We build all of these because we are traders, and we want to make it easy for other people to also be traders."