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On November 18th, 2018, BitMax.io (BTMX.com) launched its trans-fee mining, cementing its position as one of the most progressive exchanges in the industry. The trans-fee mining model coupled with the exchange’s already low fees set a new standard in the Crypto space, as traders will be able to get back their already low fees in the form of BTMX, the platform native token. These tokens allow the community to have a genuine participation in the exchange, be they willing to utilize the token’s utility.
A major pain-point for traders, irrespective of market conditions, has always been fees. While most crypto exchanges tout themselves as customer-centric, they tend to offer a fee structure that holds little benefit to their trader communities. BitMax.io (BTMX.com) develops its token mechanism based upon lessons from those previous exchanges; and the innovative unique mechanism that pairs transaction fee mining with reverse-mining ushers in the start of the 3rd generation of digital asset trading platforms.
Building a Demand
In the past, trans-fee tokens would be reduced from supply through forced buy-backs and burns. This model could be effective in a very short term, but in the long run, it causes continuous pressures for the platforms. This is because those tokens lack in value support. BitMax.io has innovated an advanced mechanism that gives its native token, BTMX, both a practical utility and a realistic demand.
The ways for individuals to get BTMX tokens are to either mine them via transactions or buy them from secondary market. To create a genuine demand for the tokens, BitMax.io distributes data usage fee to its users. Token holders who have signed up “BTMX Token Terms and Conditions” and agreed to share their token transaction information are eligible to share data usage fee which is part of the platform net transaction fee revenue. The more BTMX a user holds, the higher share he/she gets.
Every 24 hours, 80% of net platform transaction fee generated on BitMax will be set aside for a Data Usage Fee Pool (“the Pool”); and 1/180 of the Pool balance will be distributed back to token holders on a daily basis.
Individual Share of Platform Data Usage Distribution= Daily Distribution of the Pool * (24HR Weighted Average BTMX position/Aggregation of Total User Effective BTMX Position).
- Thus, rather than the exchange forcing an artificial buy-back of platform tokens, the BTMX token has provided users with an intrinsic value through
- sharing the revenue of a well-functioning exchange.
Given that BTMX holders are rewarded with fee sharing, it is able for BitMax.io to attract interest beyond the Crypto crowd. This factor increases BTMX demand on the market.
Merging Token Models
Returning large sums in the form of fee sharing to users could be disruptive to an exchange’s long-term growth. However, BitMax.io has designed a secondary purpose for the BTMX tokens - to incentivize the liquidity providing and to retain trades within the ecosystem.
As BitMax.io offers the option of reverse-mining for Maker traders, user not only get rebates by executing Maker trades but also “return” the equivalent market value of BTMX tokens by the platform deducting them from the user’s account. Thus, BTMX serves as an incentive for user loyalty, as well as an incentive for mining and liquidity. The returned BTMX tokens will be locked up permanently, hence reducing the number of tokens in circulation.
BTMX combines the “loyalty: token model with the trans-fee model. This combination leads to a token economy that is meant to keep liquidity within the platform as it fulfills the different needs of different users and traders, irrespective of whether they want mining rewards or loyalty-incentivized rebates for providing liquidity.
Given that BitMax.io has kicked off with some of the highest volumes ever seen for a new exchange, the combined “mining + reverse-mining” models have been generated a lot of trading activities, so has the BTMX token economics proved longer-term driven for the traders. As more and more cryptocurrencies make their way into BitMax.io order books, this exchange’s popularity should further extend its reach with more liquidity during the current challenging market condition of Crypto market.
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