BitMax AMA Recap

BitMax AMA Recap

CryptoDiffer team

We are glad to meet here

George Cao(@BmaxHeat), CEO of BitMax.io

Shane Molidor (@shanemolidor) Head of Business Development at BitMax

Q1: Can you introduce yourself to the community? What is your background and how did you start BitMax?

George Cao
CEO

Sure, I came from traditional tech/finance background. After getting my PhD in computer sci from u Chicago, I joined wall st first as a structured product quant/ researcher then joined knight capital as a quant trader. After that I have been a trader for about a decade.

I started bitmax simply because there wasn’t any exchange doing a great job back in 2017, huge latency , often system error, high commissions. I believed and still believe I can do a better job than any of those 🙂

Shane Molidor
Head of Business Development

I come from a technology consulting background which is how I first got exposed to crypto as a hobby. 

I started working professionally in crypto in late 2015 as one of the first hires at Gemini with the Winklevoss twins. Focused on biz dev and ops and learned a lot about exchange infrastructure, custody solutions, and market microstructure. 

In early 2018 I transitioned to China and began overseeing the trading division of one of the largest crypto funds in the space. Oversaw OTC and designated market making. 

I met George and Ariel (our co founder) about 1.5 years ago. They convinced me to join in May of this year and I haven’t looked back since = )

CryptoDiffer team

Q2: Can you briefly describe what is Bitmax in 3-5 sentences? What are the competitive advantages of your exchange in general?

 

George Cao
CEO

We position ourselves as a bridge between traditional finance and crypto world, a bridge that connects global investors/ traders. We also often times describe us as people’s exchange coz we offer the lowest rate in the tier and on top of that we distribute 80% of our commissions to our token holders

CryptoDiffer team

Q3: What are your best products? And what’s special about them?

 

George Cao
CEO

Margin trading is often times considered as our signature product. We are the first one to offer cross asset margin trading.

Meaning that you can use any of your tokens as collateral and enjoy the benefit of margin trading.

To Bette utilize your capital.

It doesn’t have a borrow and repay step. You buy as borrow and sold your position it’s automatically repay your loan. Many traders come to us because of the convenience and low rate

 

Cryptodiffer Community

Q4: What are the major milestones you have achieved so far?

 

George Cao
CEO

Many milestones haha

We are a relatively young exchange, we have 1 yr and 3 months old. Since we start operating, we achieve many things.

1) legal and regulatory side, we established partnership with prime trust in the us, we got the green light to provide service to us clients. We get msb from Canada. Our broker dealer license in us is under way

2) product side we have margin trading, volatility cards is another unique product. We are also testing future contact and will roll out soon

We also built fiat channel that enable credit card purchase, big otc in major currencies

3) we quickly established our reputation in many jurisdictions and became one of the top exchanges that traders are using on daily base

 

Shane Molidor
Head of Business Development

I think the discontinuing of reverse transaction mining in late Q3 of this year was a huge testament to the team’s progress since launch. Trans mining was essentially a way to bootstrap liquidity in the early days of the platform and overcome the “chicken and egg” dilemma that many new platforms face when trying to promote liquidity (i.e., you need liquidity to attract retail traders, but sophistated desks are unlikely to provide liquidity unless there is an abundance of retail traders taking liquidity). 

We were able to discontinue the trans mining mechanism because we achieved an abundance of organic liquidity and marketplace activity on the platform — we are consistently ranked in the top 20 exchanges by volume on aggregators like Coingecko. 

I think this speaks to how quickly the platform was able to mature and capture market share from larger incumbent players like Binance, Huobi, and OKEx.

We have since rolled out a new VIP fee & rebate structure that offers some of the most competitive rates in the industry. We’ve seen a lot of success in onboarding more sophisticated sell-side institutions due to these incentives. Getting this institutions active on the platform ultimately benefits retail traders because it promotes trading efficiency with deeper liquidity, tighter spreads, etc.

 

Cryptodiffer Community

How do you respond about security to protect and gain trust in the interests of users who use the BitMax platform?

George Cao
CEO

Security is always our top priority. We have a team that works on improving our security on daily base. We improve our system security on monthly even biweekly basis

 

Cryptodiffer Community

What components of BitMax have the potential to capture a major portion of revenue from among the exchanges and what are your goals for 2020?

George Cao
CEO

We will roll out our derivatives product very soon. As well as our unique staking and lending products. I believe these are the major revenue source for 2020

 

Cryptodiffer Community

As i know in past 3 months, Bitmax has listed about 20 projects, do you think this can dilute the trading volume on your exchange since traders have so many choices and are you sure that these project are quality projects?

IEO is going to end its trend and the attraction of it to investors is reduced slowly day by day. Does Bitmax have a plan for making something difference for this status?

Shane Molidor
Head of Business Development

Our listing criteria have evolved in the past year and we’ve certainly learned from past successes as well as missteps. At our core, we try to identify projects with compelling fundamental value and go-to-market strategies. 

We have a research team that works alongside the BD department and employs a due diligence matrix to assess a number of variables including a project’s core value proposition and business plan, token economic design, smart contract, community support, as well as the team’s professional background in their review of potential listing candidates

I certainly think there is a risk when exchanges list too many projects, especially when those projects are of objectively poor quality. This tends to detract from the community excitement associated with listings, which is a bad thing because platforms need to constantly innovate and find ways to generate enthusiasm within there communities to keep the marketplace vibrant.

Cryptodiffer Community

When the crypto market cake is still small but there are many Diners and new one is apearing day by day, how will Bitmax keep its position as well as its role in the whole crypto market? To do this, which is the most important thing that Bitmax think?

Recently, Bitmax team organized many AMAs on many crypto communities and collecting feedback from community. Is there some big updates coming up and will Bitmax add OCO, OTC feature in near future?

George Cao
CEO

It’s a very good question. We are not targeting the current market, we are targeting the future market. When regulators open the gate we will see 10x 100x capital joining this market. At that time we will see a real real market. BitMax is well prepared for the challenge and opportunities in the future. Yes we care a lot about feedback from traders coz we want to know how can we better serve all of you. There will be major updates coming. Please stay tuned

 

Cryptodiffer Community

Liquidity, Security & Trust are very important for an exchange, how BitMax can meet all of these factors?

Shane Molidor
Head of Business Development

Liquidity: actively engage sophisticated institutions to motivate them to trade on the platform. Liquidity largely comes from patient, savvy trading desks with massive balance sheets. This desks are actively trading on other platforms so you need to showcase a clear benefit of trading on BitMax vs. other competitiors. This might be surperior client servicing, infrastructure / connectivity, fee structures, etc. Long story short, you need these big players active on your platform if you want to catalyze this virtuous cycle of “liquidity begets liquidity.”

Security: employ defense in depth around all custody operations. Maintain a small % of assets in hot wallet to satisfy requests for withdrawals while prioritizing the integrity of a majority of assets. Also, ensure there is access controled operations to protect against any internal maleficence. 

Trust: Always practice transparency with communities, even when things are unpleseant.

 

Cryptodiffer Community

Not everyone/everything is perfect, what points do you think Bitmax is lacking to catch up Binance and do you have any plans to solve it?

George Cao
CEO

We need to build a complete product line. Like I said we are one year old and we are on our way to building more products. We need another 6-12 month to do it

 

Cryptodiffer Community

Q. What is the mission and vision of BITMAX, what are BITMAX partners?

What is the BITMAX plan now?

Shane Molidor
Head of Business Development

Continue growing as an institutional-grade trading platform that bridges the east and the west. Offer a holistic suite of services to our users that spans from trade execution on spot markets, derivatives trading, staking solutions, and other innovative products. 

BitMax has strategic investors, as well as large institutions that trade on the platform, but I would say our biggest “partners” are the members of the BitMax community. I know that sounds corny, but we honestly value the feedback of our community more than anything and lots of the iterations you see in our product offering is due to feedback from core community members. 

A short term initiative we’ll be going live with in Q1’20 is derivatives trading.

 

Cryptodiffer Community

There are 3 top priority issues that are the combination of slow transaction speed, high cost and insufficient liquidity.  So how does BitMax solve these problems?

Shane Molidor
Head of Business Development

Our OMS is capable of handling 400K+ transactions per second. As far as latency goes, I haven’t really seen many complaints from the community. Sure the speed isn’t going to be as great as co-location of FIX direct connect, but I don’t think the industry has gotten to the point where these sorts of solutions are in high demand. 

High costs can refer to transaction fees / trading fees and market conditions like spreads, market depth, and resilience of liquidity — all of which factor into the “effective cost of a trade.” To that extent, we offer some of the most competitive fees (and rebates) in the industry to keep spreads between makers and takers incredibly tight. We are consistently as tight or tighter than platforms like Binance for major coins, and we are building up the markets for mid market caps and alts.

 

Cryptodiffer Community

Marketing is a leading element for every project.  So what is your strategy to attract users and investors to Bitmax in the long term?

Shane Molidor
Head of Business Development

We’ve identified marketing (or lack thereof) as one of our bigger painpoints thus far. We have a ton on our plate and resource allocation can be difficult when the development pipeline is so packed. Stay tuned for a strong push come 2020. We want to ensure we aren’t just creating “hype” for the sake of hype. We want to coincide a strong marketing push with our next iteration of platform offers that will provide significant value add to existing as well as new users.

Cryptodiffer Community

What is the biggest challenge of BitMax? Has it been resolved yet?

Shane Molidor
Head of Business Development

Every day we face new challenges. Its very difficult to appease 100% of users / community, especially when the motivations of specific global demographics and camps of traders (i.e., retail vs. institutional) can vary to such extremes. 

We are doing our best and I would say the biggest lesson I’ve learned since starting is the need to be introspective in order to identify weaknesses and make a conscious effort to improve upon them. For example, I’ve definitely had some misteps with past listing decision. I need to be able to do a comprehensive post-mortem and mitigate risks of that sort of misstep ever occuring again.

 

Cryptodiffer Community

What components of BitMax have the potential to capture a major portion of revenue from among the exchanges and what are your goals for 2020?

Shane Molidor
Head of Business Development

We see lots of opportunities in the derivatives space. Derivatives are so nuanced that its actually not as difficult to carve our unique points of differentiation when launching a new platform. Ultimately the goal is to combine these unique points of differentiation to product that really resonates with global retail and institutional communities. I think FTX is a good example of an exchange that dramatically improved upon the status quo and has captured significant market share since. 

An important thing to note is that capturing revenue and market share are sometimes at odds. An exchange, just like many projects, benefits from network effects as its user base grows larger. A mistake many platforms make is to prioritize revenue growth at the sacrifice of customer acquisition.

Cryptodiffer Community

Is very attractive the concept called “reverse mining” on bitmax, which others role have   this apart of the liquidity? 

Between 93% and 98% is the total exchange volume belongs to USDT and USDC, so my question is: do you have plans to incentivize the user to make grown the volume with others pairs?

Shane Molidor
Head of Business Development

Reverse mining was discontinued in Q3’19. The volume you see conducted on the platform now is all organic interaction between buyers and sellers trading via “traditional” mechanisms.

Cryptodiffer Community

There are 3 top priority issues that are the combination of slow transaction speed, high cost and insufficient liquidity.  So how does BitMax solve these problems?

George Cao
CEO

Our Match engine can take as many as 400k tps per second. Best in the tier. We are very proud of our system

Cryptodiffer Community

Some Market using Fakes Volume to attract user.

This is bad cause user will trade on not accurate market volume,will also may lead to price manipulation.

How do Bitmax make sure user using real market volume and no price manipulation?

Shane Molidor
Head of Business Development

The order matching engine does not allow wash trading / self crossing. We are building up monitoring systems to track other types of malicious trading activity such as collulsive “churning” between accoutns.

Cryptodiffer Community

Can you tell me some reasons for a user to use BitMax  to manage their assets instead of other famous exchanges such as Okex, Huobi, Binance. …?

Shane Molidor
Head of Business Development

– Better fees, and even the opportunity to get paid for trading (via maker rebates)

– 40+ assets available for margin trading. Go long or short if you have a strong directional view. Liquidity is robust enough to not shut down margin when you might need it most (*cough* Binance and MATIC? *cough*)

– We give 80% of fees collected on the platform back to users that stake BTMX. Daily payouts in USDT.

Cryptodiffer Community

There is a cancer in trading and that’s WASH TRADING, how does you deal with the issues of WASH TRADING

ALL things exchanges are threatened by the security, please how SECURE is the bitmax ecosystem?

Shane Molidor
Head of Business Development

Answered above — The order matching engine does not allow wash trading / self crossing. We are building up monitoring systems to track other types of malicious trading activity such as collulsive “churning” between accoutns.

w/r/t security, answered above — we employ defense in depth around all custody operations. Maintain a small % of assets in hot wallet to satisfy requests for withdrawals while prioritizing the integrity of a majority of assets. Also, ensure there is access controled operations to protect against any internal maleficence.

Cryptodiffer Community

Having your every question answered can make your trading experience delightful. It has become a standard for sizable exchange platforms to provide 24/7 customer support with knowledge people solving technical problems real-time.

Can you tell us about Bitmax Customer Support?

Shane Molidor
Head of Business Development

We have dedicated customer support 24/7. Our teams are located in the US and China and actively monitor all social media channels as well as direct inquiries sent to the platform.

Cryptodiffer Community

– Currently, BTMX run on Ethereum. Will BITMAX launch your own blockchain in the future? 

– are any of this on Bitmax in near future ( Reward and Staking, Crypto Cards & Crypto bank )

Shane Molidor
Head of Business Development

I’ll let George speak to BTMX questions as I don’t have much involvement there. 

w/r/t new products and offerings we will be rolling out derivatives, staking, and other defi solutions in the coming quarters.

Cryptodiffer Community

Additional questions: 

– Shane mentioned there was a full pipeline of projects for presale and listings. Since that moment 0 presales have been organized. Was it not true? Or project are not willing to pay for such a presale anymore?

– Why are the futures rollout so slow, and why would someone use BitMax and not FTX, Binance or OKEx? 

– Is the OTC service used by someone?

– Where is the marketing you promised earlier? Or hosting a few AMAs in random channels is marketing for you?

from @crypt0p3p3

Shane Molidor
Head of Business Development

w/r/t project listing pipeline — (1) the market has not been favorable to alts in the past few months. Very few projects are eager to pursue listing on exchanges in this environment. I would never force a project to list if they deemed market conditions unfavorable. Also, its worth noting that a listing needs to be a collaboration — without resource allocation from both the project and the platform, the listing is unlikely to be successful. Our listing requirements are quite stringent — we require projects to leverage the support of marketing agencies and designated liquidity specialists. This can be costly for projects; however, I think its necessary in order to promote engaged communities and efficient trading in market. I don’t want to become the next HitBTC that simply charges a listing fee and lets projects flounder. 

Utility and fundamental value are certainly important in driving a project’s success, but there are so many of factors that drive success.

w/r/t Futures rollout — I don’t think its been slow = ) A derivatives platform is much more complicated than a spot market and has many nuances that can present extreme risk to the platform unless executed correctly. We’ll be launching soon enough and we’ll highlight points of differentiation, but I think there’s still room to improve upon things like liquidation methodology — for example, inclusion backstop liquidity provider programs, auto-deleveraging, etc. FTX has shown us that the community responds well to innovation even if its highly complex, and we aim to follow a similar approach.

OTC launched just recently and we’ve seen very positive feedback from our community. Having an onramp offramp to compliment the trading platform is key. Of course people use it = )

Cryptodiffer Community

How does the Bitmax.io staff and CEO plan to add more value to the Bitmax.io token over time and create more utility for the token to grow in the exchange and thereby the partner’s share of exchange fees?

Shane Molidor
Head of Business Development

I think a large part of the utility of BTMX is the ability to stake in the BitMax investment product and receive data rewards in USDT. To make this aspect of BTMX more compelling, we need to drive trade activity on the platform. That involves actively building up our user base of retail and institutional traders. I think futures trading will be critical to this and will launch Q1’20. 

The introduction of our fee & rebate schedule also increases the funamental value of BTMX. 

Market hasn’t been performing well as of late, but price depreciation is not necessarily indicative of devolving utility. Just as with many other assets, swings in price can be the cause of herd mentality, and FUD in a relatively illiquid market. I’d argue that BTMX is undervalued at the moment, especially when looking at some of the comp exchange tokens in the market.

FYI, I have a meeting to get to so I’ll try to work through a few more questions. For anyone that I don’t get to (I know there are many), I’d encourage you to join the BitMax telegram community where our admins, George, and myself are active.

Cryptodiffer Community

If Investors need to fully consider the market, who are which target group of audience are you after? And How do you convince them on joining?

Shane Molidor
Head of Business Development

Personally — my BD efforts are directed at onboarding “instituional” clients. In my experience working at exchanges (Gemini, BitMax), a significant portion of overall trade volume is provided by a group of institutional players. Therefore, it makes sense for me to direct my limited bandwidth to get these players trading on the exchange. 

I “convince” them to join by developing a deep understanding about their trading strategies and, if possible, responding to their needs with our existing products. If those products don’t yet exist, then I can speak with the developers about prioritizing the buildout. For example, if an institutional trader utilizes a “market neutral liquidity strategy” then I know rebates are critical for them to trade more profitably. If an institutional trader takes short term directional views on the market and wants to maximize profitability, then I know BitMax’s 0% margin borrow for assets repaid inside 8 hours can help them.

Shane Molidor
Head of Business Development

Thats about all I have time for at the moment! I’ll stick around in the community and happy to check in later today / over the weekend.

Really appreciate you having me and @BmaxHeat here for the AMA.

Cryptodiffer TEAM

It was a pleasure to conduct an AMA with BitMax.io!!

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