AscendEX AMA Session with Dr. George Cao (February 28, 2020)
Host: Dr. George Cao, Co-founder and CEO of AscendEX.
Note: Here is the transcription of the event. Please note that the transcript was edited for comprehensibility and coherency, while the content was not changed.
George: Hi everyone. It’s been a while since our last AMA. I will start with some updates on my side and let’s get to the questions after.
I want to share some of the new updates in recent months, and there is some interesting data that I want to show you. The percentage of BitMax’s volume compared with the aggregated volume of all other major exchanges are:
BTC has increased 26.7% since last October
These are the average volume percentage of Feb 2020 compared to that of Oct 2019. We are the only exchange that has seen a big increase in trading acrossthe majority ofall major coins, (percentage in market share).
We had 3 major system upgrades, released a new design of our website and app, and listed a number of tokens in the past two months. On average, our system handles 600m messages per day, comparable to the largest US equity brokerages.
We’ve had 0 unscheduled maintenance sessions in the past 5 months, making us unique across all major exchanges.
We have quietly launched Perpetual Futures Beta to the public and staked the first version which will go live in approximately one to two weeks.
We also saw an increase in the number of high-quality projects along the listing pipeline and we are expecting to see more active listing activities in the upcoming months.
That’s only a fraction of what we achieved over the past months, with more of what we have been working on to come. But let’s start the questions section now.
Q1: China’s CBDC development is a growing trend in the crypto market, do you think this will affect Bitcoin price? How can BitMax benefit from this?
George: I don’t think it will come anytime soon. We do keep a close eye on it but it’s too early for us to take any action.
Q2: Good morning Dr. Cao, could you please let us know if the staking, borrowing, and lending system are still on the BitMax Exchange Roadmap, if so, could you please provide an ETC?
George: Yes, this will be one of our focuses this year, only comes second to futures contract. As I said, the first version will go live in approximately 1-2 weeks. We will announce the details later. Also, there are a number of great projects that show strong interest in our innovative staking approach, with an increase in interest every week.
Q3: What are your plans to review the private sale/ASDP release rate, please? I know it will be difficult, but it would be nice to hear your plans.
George: Ok this question is about the private sale portion of ASD. I want to share some data about the private sale. You all know I am a data person. So the private sale price was around 0.015 USDT per ASD, and currently, we are trading at 0.056. We released 17% of our private sale tokens and distributed 15M USDT to ASD holders in 2019. 30-40% of that goes to the private sale portion, which means that the majority of the private sale investors if they hold tokens until today, it’s very likely that they are in the money with only 17% of the tokens released. For most of last year, the price was much higher. So congratulations to those who locked a profit for themselves. We consider ourselves as a people’s exchange first and foremost because we share most of our revenue and without the support of everyone, we would not have made it this far. We believe we put 120% into this project to build an exchange for everyone’s best interest. Please continue to support us. “Funding” and negative talk can only damage the project and therefore hurt your own investment.
Now regarding the release speed, we will allocate 20% of the commissions from our futures contract to a special account and have a third-party asset manager executing the buyback. The details of this method have not been decided yet. It can be in the form of a buyback from the market, a Buyback of BTMXP, or another form.
Q4: I bought a lot of Btmx so I have been enjoying a nice daily return. But already for some time, my daily returns are going down, even though the AscendEX exchange volume has gone up lately my returns still keep going down. Can you explain this volume up but daily income still going down? Thank you and kind regards.
George: Yes, this is related to the history and where the reward pool came from. We started transaction mining with billions of dollars of volume per day. Most of the pool came from early mining transactions. We stopped mining last year, and as a result, the pool is decreasing since we previously distributed 1/180 per day. We no longer have the mining revenue, it’s normal to see a decrease in the trend, eventually, it will balance out.
Q5: Any plans in the near future to revise the VIP Fee & Rebate Structure? We have seen a very good volume in the exchange but seems like they are on a high VIP level.
George: Since we introduced the VIP structure, we saw an increase in the number of institutions signing up and taking advantage of the low VIP fee. Sometimes the institutions make a negative fee to the market. However, I think it is a healthy thing. In a healthy ecosystem, each party plays its own role.
Market makers provide liquidity and depth to the market. Sometimes they trade at a loss but make it back through a rebate, while traders enjoy a deep book and their transaction cost is minimal. Transaction cost = fee + slippage. An exchange makes some commissions as revenue and provides a robust platform for people to trade on.We believe our ecosystem is developing in the right direction. The huge increase in market share is an example and, we have a long list of institutions that are on board. One year ago, in Feb of 2019, we had less than 5 institutions trading with us. Now we have more than 10x that number. People see that we have good liquidity and depth in the majority of major coins.
Q6: Will BitMax has its own blockchain? Will Yubikey be integrated?
George: Not anytime soon. And good suggestion.
Q7: Do you offer any kind of protection for the crypto assets deposited on BitMax? What kind of security features does AscendEX offer?
George: Yes, we do our best to protect our user’s digital assets, we take caution to ensure that if there are security risks, they are addressed as soon as they are discovered. Please reference our Risks and Disclaimers page for further information.
Q8: What plans are in place for global expansion, are you focusing on only one market at this time? What will BitMax do in the future to face its competitors and turn itself into a popular trading platform for everyone?
George: We have always been a global exchange. According to last week’s data, our largest user group comes from China - 19.8%, and also large groups from India, Vietnam, Europe, etc. We have a very diversified user base and we hope to continue to harness users on a global level.
Q9: Security, scalability, and data privacy are three aspects valued the most in such a young industry; partnership is an integral component of any project's journey. Which types of partnerships have AscendEX already attained and what are the plans moving forward?
George: We have announced a huge partnership with Bithumb Korea last week. I believe combining our global presence and Bithumb’s successful operation experience makes it a perfect partnership. We have been working with the Bithumb team closely since last September. I would say they’re an amazing team and we enjoy working with them. This partnership is similar to the Upbit - Bittrex partnership.
Q10: Can you share your experience and journey working the BitMax project? What is the biggest achievement you are most proud of?
George: It’s fun, eye-opening, and exhausting. The biggest achievement is that we built a team with very talented people, with the highest standard of integrity, and all working together towards the same goal.
Q11: Will BTMX holders share profit from the Futures trading in the investment program? How much will you keep and how much will go to the distribution pool?
George: Futures contract commissions will not go to the reward pool. Instead, it’s will be either (I) a Buyback of BTMX from the secondary market that results in extra price support. All the tokens bought back will convert to BTMXS and 50% will be released for private sale tokens. Or (Ii) A buyback ASD which is a faster way to lock profits for private sale investors or (iii) A combination of both. One thing I have to remind everyone is that we have a high expectations for futures volume, however, it takes some time to get there. Look at Binance, Huobi, FTX, and By bit, on average it takes 6 months for their futures volume to reach a certain level, and we expect the same thing. So please don’t be upset if you see less volume in the next months. We need some time to ramp up and reach full speed.
Q12: People who paid up to 4,5 cents for ASD are suffering because of the slow release. Isn't it a mistake you made it tradable?
George: We are aware of this issue and that’s why we want to buy back 20% of futures contract commissions and accelerate the release. Please keep in mind that the release speed has a negative impact on the spot price. I have to balance different investors' interests since our team stopped the release and is not selling. The release speed is actually a redistribution of the pie between secondary market investors and private investors - That’s why I don’t want to simply increase the speed. I’d rather grow the pie, so that each party can have more to take home. That’s why we built our futures contract product and can bring that part of revenue into the pie - It’s a much better approach than to just simply speed up things.
Q13: What is going on with projects initially listed by AscendEX?
George: We have a post listing follow-up processes for projects. However, it’s difficult for exchanges to manage the team. And I don’t think we should do that either. It’s not a problem just for BitMax, it’s a problem for the industry. Some projects are transparent and that’s good, but there is no legal obligation for them to behave properly. It’s tough for us, for the projects, and for the investors. We always believe strong regulation is the only solution.
Q14: When the volume is really high like Binance, there is no need to have negative fee players to increase depth. Do you think so and will you change it in the future？
George: Let’s look at how Nasdaq competes with Nyse. As big as they are, they give rebates. However, if we are as big as Binance, the pool will be much bigger anyway. We are getting there.
Q15: How do the early community supporters participate in BitMax’s development? What are the commercial potentials of AscendEX?
George: Yes, we are launching our ambassador program for our supporters. This program focuses on futures trading – you can get 50% off commissions if being an ambassador. Please chat with our community managers if you are interested.
Q16: To now have to pay a 50%+ fee to reconvert back to ASDP is pretty harsh. It was around 21% in the beginning. What can you do to help them, please?
George: This is all related to the token price. If ASD is trading at 10x now, there won’t be a problem. My approach is to identify the root cause instead of giving out just a quick fix. Yes, I can lower fees but it’s not an optimal solution. I would say please let me work through the strategy I came up with. If in 6 months from now we still see the slow speed in release and the suffering of high conversion price, we can re-think the strategy.
Q17: What are the benefits of holding ASD for the long term?
George: BTMX is the only exchange native token that gives holders both a daily reward in USDT and buyback. No other platform does that, not even close.
Q18: What makes your project sure to continue to adopt both Crypto and non-Crypto?
George: ASD is one of the very few tokens that can apply a traditional valuation model. We have many investors who come from a traditional finance background. I believe I have to run now. It’s so nice talking to all of you, and thanks for an amazing AMA. There will be another AMA on Twitter next week, and we have something to announce during that time. I welcome everyone to join the AMA and toast me again.