Why are there always high-leverage "gamblers"? Analyzing trading psychology and market dynamics under the PVP model.

This article will explore the nature of zero-sum games in the trading world and how to stimulate human greed and resentment through PVP mechanisms, thereby building a self-sustaining trading activity flywheel. (Previous context: "Earn $300 million in 7 days" - Is the mysterious trader TechnoRevenant the new king of on-chain, or a market manipulator?) (Background supplement: From ByteDance engineer to multi-million dollar crypto trader: The calm wealth code and trading philosophy) Junior high school chemistry mentions that to make the bubbles blown out more stable and lasting, polyvinylpyrrolidone (PVP) should be added to the solvent - a thickener and foam stabilizer that provides structure and durability to the foam, allowing it to maintain its shape and resist external pressure. Similarly, maintaining sustainable liquidity and defendable market share for Perpdex is not achieved through passive Farming, advocating, or wash trading, but through actively constructing an extremely competitive psychological environment. Here, 'PVP' not only stands for the chemical stabilizer but also Player-vs-Player. Through meticulously designed mechanisms, traders can compete against each other, and the protocol's mechanism should be used to stimulate the strongest internal drives of humanity - greed and resentment - to create a self-sustaining trading activity flywheel, thus breaking free from over-reliance on inflationary token releases, ultimately achieving true market stability. 1. The Great Game: Deconstructing the Zero-sum Reality of Trading The essence of trading is a zero-sum game; if you lose, I gain, there's no need to cover up or gloss over. Meme: The most primitive PvP arena The trading ecology of Meme is the purest and most unadulterated manifestation of the PvP principle. Unlike assets that claim to have potential utility or cash flow, the value of Meme almost entirely derives from its cultural relevance, community hype, and viral dissemination on social media, i.e., attention itself. In such a market, trading resembles a form of 'cultural arbitrage': predicting or getting ahead of the market to find the next hotspot. This makes the Meme market a stark zero-sum game: one trader's gain directly comes from another trader's loss. In low-fee, high-throughput public chains like Solana, this PvP environment is pushed to the extreme. Bots run rampant, with median holding times measured in seconds, and the market evolves into a 'super PvP' ecosystem, where new retail investors have little chance of making significant profits. This brutal environment precisely reveals the nature of speculative markets - it is not a collaboratively built community, but an arena where participants devour each other. Since it is a place where one eats another, claiming to be a bodhisattva descending to illuminate the earth seems somewhat superfluous. The Illusion of Positive-sum Growth The mainstream narrative in the cryptocurrency industry often emphasizes its 'positive-sum' aspects: the continuously growing total market capitalization, technological innovations leading to new application scenarios, and the ongoing influx of new users. This macro narrative is real and important, but it fundamentally disconnects from the micro-level - the daily experiences of traders on Perpdex. For a user engaged in high-frequency trading on Perpdex, their goal is not to 'build a whole new financial system,' but to seize capital from other market participants amidst price fluctuations. What their P&L interface displays is a brutal zero-sum reality. Any successful PvP protocol must be built on this basic understanding, stopping the packaging of itself as a universally accessible 'public utility', but embracing its true identity as an 'arena'. The positioning of the protocol should shift from 'trading market' to 'overcoming other traders', this repositioning aligns its product characteristics with users' true motivations. Leverage: The Great Amplifier High leverage is a core feature of Perpdex, serving as a catalyst and amplifier in PvP dynamics. Leverage not only magnifies financial gains and losses but, more importantly, greatly amplifies the emotional intensity of PvP conflicts. The ecstasy of a gain and the devastating blow of a loss are disproportionately magnified. This amplification of emotions is crucial for hooking traders into the psychological cycles we will discuss in the next chapter. Traditional incentive models assume that trading volume is a function of liquidity and incentives, and trading volume is a function of conflict. By designing mechanisms that create sustained, quantifiable conflict (such as leaderboards and tournaments), protocols can generate a stable base trading volume driven by intrinsic competition without relying on direct token rewards. 2. The Dogma of Participation: Weaponizing Greed and Resentment The core of PVP is to draw out those two aspects of human nature - greed and resentment. The Winner's Curse: Cultivating Greed and Overconfidence For winning traders, the platform's goal is to systematically foster their greed and overconfidence, prompting them to trade bolder, more frequently, and more recklessly. Psychological mechanisms: Successful trades trigger a series of cognitive biases. First is the overconfidence bias, where traders tend to attribute success to their superior skills rather than luck, thereby underestimating future trading risks. Second is the confirmation bias, where they actively seek information that validates their 'winning strategy' while ignoring contradictory evidence. This psychological state is known in trading psychology as the 'Winner's Curse', where the largest profit often foreshadows the largest loss to come. From a neuroscience perspective, profits stimulate the brain to release dopamine, forming a powerful reward loop that reinforces trading behavior and encourages traders to take on greater risks for stronger stimuli. Taking a few mainstream CEX/protocols as examples: Platform amplification strategy: The protocol's design should strive to amplify this sensation of victory and transform it into a public symbol of social status. Prominent profit and loss display: Show high floating profits and losses (PNL) in the most eye-catching position on the interface, using positive colors like green. Achievement system: Establish 'winning streak' badges, '100x returns' medals, etc., turning trading achievements into boastful virtual identities. Public leaderboard: A real-time updated leaderboard is a core tool for creating social pressure, turning individual profits into a public competition. Community sharing function: One-click sharing of profit screenshots to social media turns winners into 'walking billboards' for the platform while imposing emotions of FOMO, jealousy, and anxiety on other users. The Loser's Game: Creating 'Resentment' For failing traders, the platform's goal is to prevent them from rationally withdrawing due to losses, but to stimulate their feelings of 'resentment', prompting them to immediately engage in the next trade to 'recoup investment'. This is a more powerful and crucial part of the entire psychological cycle. Psychological mechanisms: Its core is the loss aversion theory. Pioneering research by Daniel Kahneman and Amos Tversky has proven that the psychological pain of a loss is twice that of the pleasure of an equivalent gain. This strong negative emotion can lead to a series of irrational behaviors, such as holding onto a continually falling position to avoid admitting a loss (sunk cost fallacy), or more importantly - revenge trading. Revenge trading is a reaction to significant losses, driven by anger, frustration, and 'resentment'...