Time & Date: 11:00 a.m. EDT, April 15, 2020
Community: @theblockcirrcle (https://t.me/theblockcircle)
Host: Crypto Mount || theblockcircle.com (@Proplene)
Guest Speaker: Dr. George Cao, Co-founder and CEO of BitMax.io (@BmaxHeat)
(Note: This is the transcription of the event. Please note that the transcript was edited for comprehensibility and coherency, while the content was not changed.)
Crypto Mount: We are joined with Dr. George Cao, Co-founder & CEO of BitMax.io. Thanks George for taking some time from your busy schedule to help our community learn more about one of the amazing Exchanges, BitMax.io.
George: Thanks so much for inviting me here. I am very happy to have the chance to talk to all of you:)
Crypto Mount: Please give us a short introduction about yourself and your background like when and how you planned to start this amazing Exchange.
George: Cool. So, I will briefly introduce myself. I graduated from the University of Science and Technology of China with a Bachelor Degree in Computer Science, I also received my PhD degree in Computer Science from the University of Chicago. Before founding BitMax.io, I worked at the Equity Division of Barclays Capital, based in both its New York and London offices, managing quantitative systematic trading in the U.S., Europe, and Asian markets. Prior to joining Barclays, I researched and traded U.S. equity products as a Portfolio Manager at Knight Capital Group. I gained professional experience in structured financial products while working for Cohen & Co. supporting the issuance of $40 billion in structured products. In 2013, after I left Barclays, I started Delpha Capital Management, a hedge fund that specializes in trading equity, ETFs, and commodity future products on all major trading platforms across the globe.
We launched BitMax.io in August 2018 with a mission to “support financial market innovation and advancement of the crypto economy through building upon a series of open and fair market rules to the liquidity of the overall market, enhance market depth, and support blockchain structural optimization.”
In 2019, BitMax attributed its market share growth to its product innovation, with the launch of its cross-asset collateral margin trading in February 2019, and the introduction of Volatility Cards in June 2019.
In March and April of 2020, BitMax launched BTC/USDT perpetual futures contract and its innovative staking service. Now BitMax has more than 190 trading pairs, 40+ margin trading pairs, and the daily volume has exceeded 150mm.
It’s a 2-year journey but it feels like centuries, a very unique and eye-opening experience for me.
Crypto Mount: So let's move on to Questions. Ready?
George: Sure, please go ahead.
Q & A
Q1: What advantages does BitMax have in terms of liquidity and transaction fees?
How is the listing process in BitMax Exchange and how do you choose projects to be listed?
George: We have deep liquidity in our cash and margin products especially in major coins. Combined with one of the lowest commission rates among our competitors, we have become one of the favorite exchanges for both institutions and retail users. For example, our spread and depth for HT is as good as Huobi, if not better.
Same thing for BNB compared with Binance, while our commission rate is much lower. That gives lots of competitive edges vs other exchanges. As a result, our trading volume market share increased 46% 2020 Feb vs 2019 Oct, and another 50% increase occurred in 2020 March vs 2020 Feb, which means our market share is more than doubled in half year.
Listing process is fairly simple. We will have an initial DD (‘Due Diligence”) for projects who wish to list with us. We score many different dimensions of the project and vote to proceed or not. If it’s a yes, we will further engage the project. Once a listing agreement is reached, we customize a listing package for the project based on the nature of the token and communities. It is a fairly straightforward process.
Q2: Many exchanges have donated to COVID-19. I haven't heard such news from BitMax. What's your contribution towards fighting the disease??
George: We started helping people as early as in January. I personally purchased masks, medical gear, medicine from both the US and Korea. Also, our employees helped a lot. Here is one picture I took yesterday, where we delivered masks to people in the community. We help as much as we can.
Q3: What's BitMax's purpose in listing leveraged tokens, known as BEAR and BULL, that will enable traders to short shitcoins during dump?
George: Sure. It is a good question. Leveraged tokens are not new to the world. We have had leveraged ETFs for a while now since long time ago. It’s a great tool to use for short term speculation. There are pros and cons associated with the token. The good thing is you don’t need to worry about margin call. The bad thing is you don’t know exactly what you get. Coz 3x or 10x is a rough estimate. You don’t know if the underlying asset moves 1% what is your exact PnL coz there are lots of factors. It is another tool for people to trade. Like all other tools, it won’t guarantee that you make money. But it’s nice to have another weapon in your bag. When used wisely, it creates a lot more flexibilities and possibilities to trade. Done with this one.
Q4: What is special about BitMax contract product? I can tell BitMax margin and staking are very innovative, but contract seems not that competitive
George: Contract product has been around in the financial market for a very long time, even before we have a real exchange. It’s a mature product where innovation is pretty hard. That being said, we do have some unique features that other exchanges do not have.
- Once one’s account was force liquidated or one chooses to send a big market order, often times it will result in an abnormal price move. People refer it as “needles” in the chart; We took an approach that if our order book is not deep enough to take the positions, all or part of the position will be taken over by our BLP (A specialist market maker). Therefore, it won’t affect the price in the secondary market. I won’t say it would 100% prevent the problem, because BLP has its position capacity. But it does greatly reduce the risk.
- We settle realized PnL every once a while. For instance, if your positions are in deep profit, it doesn’t make sense that you can’t use the profit as collateral to enter more position. We solve the problem by realizing PnL every minute (or possibly less minute).
Hope that answered your questions.
Q5: What are the requirements for users to get a staking reward? For example, do I need to worry about the minimum staking amount and the length of time? Do I need other technical setup to get started?
George: You don’t need to worry about any tech issues. We will handle them for you. There are minimum requirements for staking, and it’s normally specified by each project. But I believe we list them on our website too. We will soon have a promotional event for staking. I personally think it’s very lucrative. Stay tuned :)
Q6: Have you met all your goals in the roadmap till now? And were there any difficulties that you didn't expect and were not prepared for?
George: We do. We are ahead of our roadmap we planned 2 years ago. And we do have many big plans going forward.
Q7: Could you share with us the special feature of BitMax platform that other platforms don't have?
George: We are proud of our deep understanding of the financial market. Which makes us the No. 1 team in product innovation. Our margin trading, our volatility cards, our staking, and some aspects of our contract are very unique and no one else in this space offers.
Q8: What is the main role $BTMX play in #BitMax ecosystem? What are the benefits for long-term holders?
George: We share up to 80% of cash and margin commissions with our BTMX holders. In 2019 we shared 15m USDT with our token holders. This year we will add 20% of futures contract commission revenue to buy-back.
Q9: For any Cryptocurrency exchange, liquidity is very important. So, what’s your solution to these problems?
George: Institutional and retail players are two sides of the liquidity. We need institutions to provide liquidity but without retail players, institutions won’t join. We are well positioned to serve both by providing a reliable and affordable solution. For example, we never had a system down in the past 8 months while Binance had one almost every other week. That brought us many flows from institutions and further improved our liquidity.
Q10: What features would traders find ONLY in BitMax that would help them improve their experience? Has the daily volume of users in BitMax changed since the COVID19 pandemic started? Has it affected the platform in any way? What is the meaning of your logo?
George: Our cross-asset model and many innovative products are key for traders to trade with us. Volume has been picking up since the virus outbreak. But I think it is more because of the volatility of the market. Our logo has sails of a boat, meaning we will sail through all weathers of the sea :P
Q11: One of the products of BitMax is BitTreasure!! So, What is meant by BitTreasure of BitMax Exchange? & Are returns of BitTreasure you mentioned on website stable or may more or less according to coin's price? How BitTreasure system works? Can we invest and subscribe BitMax BitTreasure offering with any other cryptocurrency or tokens or We can only invest in BTMX tokens?
George: BitTreasure is in a way similar to staking. You store tokens with us and earn interest. We will soon have a promotional event for BitTreasure together with staking. :).
Q12: Did BitMax provide liquidity by its own market book and market order or there is any mark price from other exchange? Also, could you share about how your security system provide good service protect user asset and data?
George: There are many market makers providing liquidity with us using different strategies. We use 5 major exchanges' prices as our index price to calculate reference price for margin.
Q13: How will you plan to dominate market? Why is BitMax better than other exchanges?
George: I don’t think anyone can dominate the market. NYSE can’t, Nasdaq can’t, and Binance can’t either. Also, it’s not healthy for one player to dominate. We want to be a major player in the market by providing reliable affordable trading solutions. Innovation is also our biggest strength.
Q14: Considering your exponential growth, I think that needs more advanced types of orders, so does BitMax have plans to take part in that?
George: Yes, we are adding more order types.
Q15: The perspective of BitMax is good to the Margin Trading, but I guess that you need a little push up in terms of Leverage. So how can BitMax boost up the Leverage space to become a space to all kind of traders?
George: We don’t have a plan to offer more than 10x leverage for margin trading due to risk-control purpose. But we do offer 100x leverage for futures contracts.
Q16: You organized an AMA session very rewarding and received a lot of questions related to utilities and technology, future vision, ... So now I want to ask what do you want to receive from the community? Most investors just focus on the price of tokens in the short term instead of the real value of projects. Can you tell us the motivation and benefits for investors in the long term?
George: 1) I want to receive feedbacks from our community - how can we better serve you. 2) We are the only exchange that share 80% of spot trading commissions with our token holders, and 20% from futures. I always say BitMax is "People’s Exchange”. It’s every token holder’s Exchange.
Q17: How did BTMX survive during long bear market? What’s your team's strategy to gain more adoption? Can you share with us recent achievements your team is most proud of?
George: Yes, it’s a very good question. Diversification is key to survival. In bull market, people want high return where in bear market people are more conservative. That’s why we focus on staking and lending products. In the future, we want to give our users more tools to preserve their capital in the bear market.
Q18: Sir George, @BmaxHeat. As a TOP EXCHANGE, do you believe in a HEALTHY competition? As new market players are launching, and making their own Mark, is this good for BitMax in terms of MORE OPTIONS for investors? Thank you.
George: I do believe in healthy competition. I welcome more players in the space and look forward to working with other exchanges. The Bithumb and BitMax partnership is a very good example.
Q19: OTC is a potential market, BitMax plans to implement this market?
George: We have OTC for USD and other fiat currencies. We are working to add more fiat gateways in the near future.
Q20: I've been using BitMax for some time, and was always impressed by how open BitMax is to the inclusion of cryptos. But particularly, why do you include BEP2 tokens, which is part of your own competitor (Binance)?
George: Our mission is to serve traders. If there is a need we will serve. There are a number of traders who want BEP tokens. That’s also the reason why we list BNB, HT and other exchange tokens. When you block your competitors, you are blocking yourself as well. I always believe in more collaborations among exchanges. Collaboration and competition can co-exist in a healthy way. I do hope other exchanges are open-minded too.
Q21: Decentralized finance has become popular now. Do you plan to launch BitMax’s own DEFI platform and stable coin?
George: We will work with Defi but we have no plan to launch our own. We can’t do everything in the eco-system yet. We are building the best exchange (hopefully) and hoping to work with other best players in the market.
Q22: Do you have any policies to support users' capital as well as attract new users? And what are those policies?
George: BitMax is pretty much like all other major exchanges. We do our best to protect users’ funds. In an unfortunate event, we also do our best to mitigate users’ losses.
Q23: After hosting this AMA event, what should be our role as a community?
George: Community support is a key for us. We value your feedbacks, your thoughts and even your criticism. Please engage us more actively and let’s build the best exchange together.
Q24: As we see Cryptocurrencies are highly volatile in market price, so how can you determine the conversion exchange rate in real time? Can you Please clarify this??
George: Not sure if I understand your question. Are you referring to the fiat to the crypto rate? We don’t determine that. But our partnered service provider does. I believe they have their own pricing mechanism.
Q25: What is your perspective of the crypto market from back to front? Has there been maturity? HitBTC pays MAKERS, what does BitMax do to incentivize MAKERS to be present by providing liquidity?
George: It’s much more mature compare with 2 years ago. We see lots of improvements in technology, in security as well as on regulatory side. I believe the crypto ecosystem will soon become part of the existing financial system (some may argue it is already).
Q26: The number of cryptocurrency exchanges is increasing day by day. What is the reason that BitMax can exist and compete with other cryptocurrency exchanges? Is it because there is BitMain behind Bitmax?
George: We are well-positioned. Some key factors why people like us are:
- We share 80% of platform income as commissions to token holders.
- We’ve built a robust system that is resilient even in extreme market conditions.
- We understand financial products and never stopped innovation.
Q27: What are the best services provided by BitMax for traders and investors in digital asset trading and what are your goals for the next 2 years? Currently, safety and security issues are the most concerned issue. What technology does BitMax use to ensure asset safety for users?
George: Our plan for this year is to complete our product lines. Still a lot to do with futures contract like 1) sub-account system 2) copy trade feature 3) settled contracts.
Also, we will work on staking 2.0 as well as some lending products, which are very popular in bear market. We have a long to-do list.
George: Guys I would like to thank you all for speaking with me today. It’s definitely the best AMA by far. Unfortunately, I don’t have time to answer every single question. But I do encourage you to ask me questions on Twitter. I will do my best to answer. Wish everyone stay safe, and happy trading!