The Brilliance Behind a Global Operator of Crypto Exchanges BitMax: Understanding the Trans-Fee Mining Model

Place/Date: - November 6th, 2018 at 9:33 pm UTC · 2 min read
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The Brilliance Behind a Global Operator of Crypto Exchanges BitMax: Understanding the Trans-Fee Mining Model (“BitMax”) is a new autonomous digital asset trading platform designed to be global operator of crypto exchanges, providing cryptocurrency trading services to a broad clientele including institutions, professional traders, and private investors. BitMax prides themselves as having the lowest transaction fees in the industry at 0.04%.

Founder George Cao graduated from both the University of Chicago and the University of Science and Technology of China. After receiving his Ph.D. in Computer Science, George worked at Wall Street Knight Capital and Barclays Capital specializing in quantitative trading and venture capital.

Later, as CEO for the quantitative trading fund Delpha Capital Management, George successfully identified, invested, and incubated several blockchain projects in New York.

BitMax has attracted the attention of many top crypto venture capital firms including FBG CapitalBitMainMatrix Partners ChinaDHVC, GBIC, Perseverance Capital, and Palm Drive. They reportedly collected over 17,000 followers on their Telegram and WeChat social media channels within the first 10 days of operation.

To better understand how and why BitMax has received so much attention, it is important to reiterate their unique position in the market. Leveraging their quant trading background and deep knowledge of the capital market, BitMax is building out their core institutional-grade trading platform and full exchange operations with an innovative approach to transaction-fee based “Trans-Fee Mining” model as part of overall liquidity strategy.

The Trans-Fee Mining model works by reimbursing trading fees to traders in the form of the exchange’s own tokens. The more traders trade, the more tokens they receive, hence the term “mining.” The Trans-Fee Mining model is an effective incentive mechanism to drive volume to exchanges, pushing the exchange token’s value higher and converting users to traders.

Additionally, BitMax’s transaction fees are the lowest in the industry at 0.04%.

BitMax understands that while the Trans-Fee Mining approach will help drive short-term token performance and transaction volume, it cannot be solely relied upon to support a healthy token economy; risks must be mitigated to prevent a pump and dump of the exchange’s token.

In response, BitMax has come up with a clever lock-up and recall mechanism to prevent their tokens from being undersold. These two key strategies help to mitigate risks and protect BitMax investors.