BitMax.io (BTMX.com), a Singapore-registered digital asset trading platform, is pioneering innovation in the industry with a novel staking product that addresses the liquidity challenges associated with traditional staking mechanisms.
BitMax.io was founded in 2018 by a group of Wall Street quantitative trading veterans and has been consistently executing on its strategic roadmap to provide its global userbase with a comprehensive set of trading products. The platform has already introduced various innovations to the cryptocurrency industry, including the industry’s first “cross-asset collateral” margin trading product and a volatility-linked derivative product called Volatility Cards. BitMax.io has recently garnered attention within the industry by announcing the launch of its new staking product that allows users to receive attractive staking returns without sacrificing liquidity. In this article, we will introduce three products offered by BitMax.io, and showcase the competitive advantages of the BitMax.io platform from a product innovation perspective.
BitMax.io Staking allows users to receive more attractive staking returns without sacrificing liquidity; therefore, encouraging higher and more resilient stake ratios for blockchain networks.
The impetus for BitMax.io’s staking product is the so-called “Liquidity Dilemma” that a token holder of a proof-of-stake (“PoS”) blockchain encounters:
- On one hand, a token holder can stake and earn block rewards; however, in doing so, the holder agrees to “lock” their assets for a period of time, therefore sacrificing the ability to trade or manage the tokens at their own discretion.
- On the other hand, a token holder can refrain from staking and maintain discretion over asset management; however, in doing so, the token holder sacrifices the opportunity to generate returns through block rewards.
The Liquidity Dilemma presents a number of problems for PoS blockchain projects, specifically: a low network stake ratio, extreme network inflation driven by large staking rewards, and network instability.
BitMax.io’s novel approach to staking solves the Liquidity Dilemma by providing token holders the flexibility to trade and transfer at their will and maximized staking rewards. Key features of BitMax.io Staking are as follows:
- Immediate Access to Staked Assets: BitMax.io maintains a pool of assets that allow for immediate access to an asset after it’s unstaked. This allows users to managed staked assets at their discretion even when delegating to a network with a lengthy unbonding period.
- Margin Trading for Staked Assets: To promote market efficiency, BitMax.io has created a synthetic version of each staked asset to be used as margin collateral, thus allowing users to hedge exposure while continuing to earn staking rewards.
iii. Maximize Staking Earnings: BitMax.io automatically redelegates staking rewards to staking pools, thus allowing users to further enhance the yields from their token holdings.
While other platforms, such as Binance and Kucoin, have adopted a “soft staking” method to solve the liquidity dilemma, their solution has a number of shortcomings compared to BitMax.io’s product. These platforms essentially stake a portion of their users’ funds without active acknowledgment from the token holders and distribute the rewards back to users.
While this “soft staking” approach also allows users to opt-out any time without delay by simply selling the assets, either to take profit following price appreciation or stop losses following price depreciation, users are most likely to lose some of the rewards as they are distributed based on a snapshot of holdings. At BitMax.io, users can enjoy the benefit to hedge their exposure freely as well, without giving up any rewards since users need not unstake nor sell their staked assets to do so.
Since its first launch in early 2019, BitMax.io’s margin trading platform allows users to trade with up to 10x leverage supported by its distinctive cross-asset collateral margin system across over 40 markets. Under the cross-asset margin trading mechanism, users can post collateral in a variety of assets to then borrow against in order to increase trading power. This funding flexibility ultimately promotes greater trading efficiency amongst BitMax.io’s userbase and makes margin trading more accessible to the less-experienced traders.
In the crowded digital asset trading industry, distinct features successfully set BitMax.io’s margin trading apart from similar products of competing platforms. For example, BitMax.io offers 0% interest for margin borrow when repaid with 8-hour settlement cycles (0:00 UTC, 8:00 UTC, 16:00 UTC). Another feature of auto leverage promotes seamless usage by granting users maximum trading power based on their “Margin Asset” balance. Lastly, BitMax.io minimizes price deviation due to unexpected marketplace volatility via a composite reference price from multiple trading platforms. This mitigates risk associated with a single point of vulnerability, such as an illiquid market or system performance disruption
Cryptocurrencies are well-known for their volatility. While some see that as a turn-off, traders see opportunities in gaining exposure to it for both trading and risk management. To meet this demand, BitMax.io introduced an innovative product called Volatility Cards.
Volatility Cards are a short-term volatility-linked derivative with quasi-option structure designed by the co-founder and CEO of BitMax.io, Dr. George Cao. By purchasing those cards, users can trade based on their anticipation of an asset’s price-movement within certain magnitudes.
The cards are named after Aesop’s Fable – the Tortoise and the Hare – and have a simplified layout that suits both retail and institutional investors. Those who correctly predict the range of the asset’s price movement receive a payout equivalent to the notional value of the card.
For example, a user would purchase a “Turtle Card” if they anticipated a small BTC price movement within the next one hour (i.e., < 0.30%), or a “Bunny Card” if they anticipated a large BTC price movement within the next one hour (i.e., > 1.00%).