Ariel Ling, as the co-founder and COO of BitMax.io (BTMX.com), was invited to the interview by Fred Schebesta, the CEO of Crypto Finder (Finder.com). Ariel has 18-year progressive executive experience in strategic planning, business development, budgeting and financial analysis risk management, regulatory program implementation, and process improvement for operational efficiency. She has an in-depth understanding of capital market products (stocks, fixed income, foreign exchange) in financial services and the development of international banking strategic trends (M&A, market structure, regulatory reforms and their impact). Her lustrous career on Wall Street made this interview a popular link on YouTube.
F: So with the token you know there are some investors out there. Maybe just simplify that down. Because there’s a lot of different dynamics which is incredible, but what do you think is going to drive the value of the token up?
A: This is what we are actually trying to kind of change, not all that change, but trying to get people to think a bit more on a comprehensive base. So there is the perception in the crypto world: when you list a token, the price will skyrocket, and then pump and dump. So this is not what we think healthy for the industry. What we are looking at is, where the traditional finance business fundamental view comes in is: №1, you really have to make sure what drives the token valuation; it’s about the economic model in the project. So, for example, if we list a project and that token at the beginning, it will have a lot to do with the market force, meaning supplier and demand, who’s buying and who’s selling — maybe the investor wants to sell, and maybe the people who are interested in getting a lower price to buy. So, it’s purely managing supply and demanding equilibrium. And the market making support makes sure they can match all the orders. Once you go beyond that, actually to sustain a value, it really comes down to a simple question: Does this project make money? How does it make money? So right now, for example, we listed one European project last week or so. The project was actually quite simple. It is using blockchain technology to streamline a lot of legal paperwork within the government. It makes sense because you go to government, you have to do a lot of paperwork, and that technology is being adopted. It has contract with certain government agency. So that comes in as an economic value from a revenue perspective. So, this is what people need to see eventually. For our platform token, it is the same thing. What all the users care about is when you are going to launch more products to make “me” stay on your platform to trade. №2, if I hold your platform token, what kind of benefits do I get? And how can I use your token? Because it’s a utility token, if I don’t have a way to use it, why am I supposed to keep it? If I don’t have utility for that, I’m just going to dump it. And the price will go down. So my partner George, he himself is actually a PhD from University of Chicago in Computer Science. He’s got 15 years of quant trading and traditional finance that kind of structural experience. So he structured the token in the way that it’s been utilized on platform. It’s very intrinsic in a way that it is always trying to align with the economic interest between various different projects, users and the platform.
F: So just talking about features, that are what the community has been asking about BitTreasure. People are interested in that.
A: (Note: BitTreasure, like all products on BitMax.io, is only for oversea users, no US users.) It’s actually interesting, because BitTreasure is actually one of those innovations we are trying to see and test the water. Because when you see what it is with the crypto, it’s very volatile. And like I said, the customer support is very important. Customer voice is important, so we listen to our user community as well. A lot of them, when they are looking at this, particularly on the volatility side, given the price movement with Bitcoin and everything, BitTreasure is actually a bit more, I hate to use the word, like the fixed income product. But it is an innovation testbed. Right now what we have launched is the size of just 50k in USDT stable coin with basically 30 days, 10 percent return. That’s it. So we are trying to test the water to see people’s interest. If people are interested in this kind of steady income-stream product to balance out the risk-taking activity with the digital asset trading, sure we can definitely open up a bit more; but this is definitely the first wave of looking to bring some traditional finance, the longer term of investment, into the highs and lows of crypto trading.
F: So, what do you do with the USDT?
A: Right now, you know, the wallet and everything is locked up. We offer 10% interest. As we are launching margin product very soon. So that is where the income stream is going to be offset against it.
A: Yeah, because another thing that a lot of exchanges didn’t do very well and we do very well is really about how you manage your asset. If you have all your exchange predominantly in altcoin, you can imagine your price up and down, and also the asset, what you call instead of asset growth but asset shrinkage. What we are trying to do is we want to keep a very healthy balance between the ERC 20s, the Bitcoin and stable coins, because that will basically help manage business operation day-in day-out.
F: Yes, 100%. That’s fantastic. And if you want to talk a little bit about now the roadmap and 2019 the business plan coming up. I think people in the community have a couple of questions around this, and we’ll come back to this. But now, what do you think will drive more usages of BitMax.
A: I think BitMax is the first exchange that we’re launching as part of the global platform. And when I retired, this is what everybody kind of thought — I retired from the Wall Street. My background in Wall Street, it was a little bit different. I mean, I ran trading business, I could be a trader, but I decided to do more around business management, business planning and strategy. This is kind of my forte per se. So when I was looking at the overall digital asset space, and when I was looking at where the converganece, where the building blocks, and where the hindering are, when I designed with George, I mean, he was actually the brain power behind it. He pulled me out of the traditional finance. So when we looked at it, we didn’t look at just three months. We do have a pretty sophisticated three-year plan.
F: Did you want to talk through this slide? Is that relevant?
A: This we’ll get to it by the adoption. But you were asking about BitMax.io. BitMax.io is actually part of the global platform. So what we have, what we built out last year, wow it’s only 6 months but it feels long. It’s the first exchange we’ve launched; it’s Asian-based, and it’s overseas crypto to crypto. As part of the master plan, we also have intention to go down to the regulatory path, because we’ll talk about a bit about what broadens the adoption of digital assets. So what we have in 2019 is really to build on what we have in 2018 — we launched BitMax.io; we actually set up a global team- we got 20 people in New York, and we got 30 people in Beijing. Third, we actually set up the entire legal entity structure that allows us to have a bit more global presence from business perspective which actually includes the US. So from 2019 perspective, Objective №1 is actually to launch North America trading platform. With North America where is a very much heavily regulated market, there are two aspects of it. First is to leverage a trust structure to facilitate the major coin trading. And the second is what everybody has been going down the path of broker-dealer for the securitized token. So we’re aiming both of them in the plan, in the execution mode. So strategc №1 is to launch the North America market. Strategic №2 is actually to look at BitMax.io, work really hard with our team, the users, the design team, the developers, to actually optimize the platform. There are always a lot of feedbacks from the team, from the users in terms of how we improve the user experience, the graphics, the APP, all sorts of things — that’s one. Second, product innovation. So we are launching margin trading in about couple of weeks. We are actually opening test net I think this weekend. And then, the next bit piece is really about the derivatives. Because when you’re looking at any single financial market, you have to have a cash market and also a derivative market. In this particular volatile market, when you know the market is going through a bear stage, the derivative is actually giving people a lot more chances to bet your bet. So this is where we look at what the users need. Product innovation is something we are very good at. Like I said, transaction mining. We are the first transaction mining exchange that actually has transaction mining and reverse mining. Nobody else has that. And we are continuing this path of product innovation. So the idea of BitMax.io, we would like to see, by the end of the day, we are top 10 for sure — that’s what we want to see. And the third objective — this is a look where I put my typical Wall Street business head on — is in any harsh environment, you always have to grow your revenue; whether you grow from your existing pie which is BitMax.io, or you grow your revenue from new territory which is North America. And we can definitely spend some time on cost control, cost discipline. And №4 is because I had a very unique experience. I’ve gone through multiple financial crisis from Dot-Com collapse to Lehman Brother bankruptcies and everything. So in this bear market what I’ve seen, if you look at the crisis in Chinese actually, it’s actually made out of two words, danger and opportunity. So in the crisis mode, there’s always good opportunity for you to grow, whether you going to do vertical expansion, or a horizontal acquisition. So we are always on the lookout in terms of exchange alignments, acquisition target, and any business partnership from different aspects of the value chain. So that’s the four aspects of what drive BitMax.
F: And what’s the timing on the US trading platform?
A: It is between end of Q1 and Q2. So the broker-dealer part definitely is something you have to get the approval. The first part with the trust structure, we’ve already inked a deal. We have the contract, and we’ve already got the API. It’s just a matter of my technology team to prioritize their resource and start working on it.