BMEX Token: Shit or Shinola?
A Lesson on Private Coinage That We Can Learn in Real Time
Unfortunately, The Bitmex Exchange and the BMEX token are turning into a real shit show. How this ends is crucial to the development of private money.
What was once the premier #1 exchange in the Bitcoin derivatives market has turned into an also-ran exchange specializing in derivatives in the plethora shitcoins offered in the crypto-world. Currently, Bitmex is ranked #57 on Coin Market Cap and is no longer a major player as an exchange.
Due to the nationalization of money and banking, the corresponding regulations, and crony capitalism in the marketplace, Bitmex emerged as the foremost Bitcoin derivative market under the leadership of Arthur Hayes, Ben Delo, Samuel Reed, and Gregory Dwyer. All of whom were indicted, prosecuted, and convicted by the powers that be and required millions of dollars rather than coconuts in bribes to stay out of prison.
To regain its market share Bitmex followed the lead of Binance and Changpeng Zhao and created the BMEX token. I have outlined the history of the BMEX token in a previous article entitled, The BMEX Rug Pull.
Essentially, the Bitmex Exchange created a published rate structure and tied this rate structure to the BMEX token, promoting the purchase and staking of the BMEX token to achieve the advertised benefits.
These rates were abruptly changed in an October 9, 2024 announcement and went into effect on October 22, 2024. Again the history and links can be found in The BMEX Rug Pull article.
What is important here and now in the new digital world, is that what Bitmex created was essentially a digital banknote, the type that emerged from a plethora of private banks in the emerging gold standard of “The Gilded Age.”
Keynesian history gives these banks an undeserved black eye by portraying them as unsound “wildcat banks”. But this is untrue. Thousands of private banks issuing banknotes developed sound banking practices.
Empirical evidence confirms this in the numismatic world.
Gosport is a tiny town in southern Indiana that no longer has a bank. This Gosport bank was a fraudulent institution whose notes were put into circulation far and wide. It was declared an illegal institution by Judge Parker in 1858. When a bank or company went out of business in the nineteenth century, all the paper money it had issued became worthless. But people had a reluctance to throw it away because it once had been worth something, so they stuck it in the attic. As a result, those banks that went out of business left many notes that are in collections or attics.
This is much like the shitcoin tokens being marketed today that decline in value but never quite disappear.
In contrast, the Brownville, Nebraska bank and the vast majority of private American banks did not go out of business and redeemed the paper money they issued, so notes from these banks are rare today and valued by collectors. This was the organic market origin of non-inflationary self-liquidating commercial paper and commercial banking based on the gold standard.
The sound Brownville bank honored the promises made in promoting the banknote.
My point is simply this.
Once a fee structure is tied to a token created by a private institution, the integrity of the institution depends on transparently honoring promises tied to that token.
Apparently, despite the trading fee benefits provided by staked BMEX, this benefit was not getting traction in the market fast enough for those in charge of promoting the exchange and this is the underlying cause for the retroactive rate change. Further, Bitmex is actively negotiating fees apart from the BMEX token, undermining the integrity of the token.
Granted the original fee structure was difficult to understand, but it was an ingenious sliding scale rate that I and others were only beginning to understand. But it was catching on. And it was slowly changing our trading habits.
50,000 staked BMEX offered arguably one of the best fee rates in the industry on the BTC/USDT pair which I had recently switched to using, opening an entirely new world to me about the utility of stablecoins.
While Bitcoin and gold are a store of value and, hence a sound standard for money, neither are money. Money is the most tradable commodity which remains the US dollar and the corresponding stablecoins.
So the question remains. Can the BMEX token be transformed into a useful utility token or is it just another shitcoin that can be changed by the issuer's whim? Can Bitmex be made great again?
I think so. But it is a long game and will require patience, time, and discipline.
First, the original promotion used to market the BMEX token must be honored.
Second, Bitmex must make it clear there are no more negotiated rates apart from the token and/or fee structure.
Third, enable the BMEX to be used as collateral BMEX/USD pair and BMEX/USDT pair so those who purchase and stake BMEX can hedge their position. After all, this is why futures exchanges were created. Such a move will truly be an innovation in the crypto world.
This very concept suggestion seems to be foreign to the morality of the Crypto World. Perhaps Bitmex can once again show the world how a free market works by embracing the sound banking principle “For Integrity There Is No Substitute.”
“BMEX is the token with time-tested integrity.” or “BMEX is just another shitcoin.”
Which one will it be?
UGLY OLD GOAT
