The Bitmex Missed Opportunity To Create a Genuine Utility Coin
“BMEX is the token with time-tested integrity.” or “BMEX is just another shitcoin.” Which one will it be? The Classic Coke Analogy.
I am a big fan of Bitmex and its pioneering efforts, which created the premier derivatives market for Bitcoin, an independent digital standard for sound money. The founders Arthur Hayes, Ben Delo, Samuel Reed, and Gregory Dwyer demonstrated how free unregulated markets innovate while legacy regulated markets which emerged organically in a similar manner in the 19th-Century Gilded Age become stagnant as they mature into crony capitalism and lobby for self-interest regulation. All of whom were indicted, prosecuted, and convicted by these powers who required millions of dollars rather than coconuts in bribes to stay out of prison.
Unfortunately, Bitmex is only a shadow of what it once was. This history is briefly outlined in my original article The BMEX Rug Pull and my last article BMEX Token: Shit or Shinola?, a lesson in private digital coinage we are learning in real-time.
What is happening at Bitmex and the BMEX token is not unlike the introduction of the new Coke in response to the Pepsi Challenge. Pepsi was kicking ass with their blind taste test, putting Coca-Cola in panic mode. The result was a marketing decision to replace the old Coke with the new Coke overnight. I remember the day it happened. Old Coke was unavailable and selling at a premium on the black market. And die-hard Coke fans were up in arms.
Now at the time I could care less. I was not a big soda fan. This is the same reaction of most Bitmex users to the rate change. Most traders did not see the benefit of staking the token, but those professionals who saw it took advantage of it. However, we are only about 2% of the client base.
In my last article, I outlined what distinguishes a genuine utility token from the current BMEX shit show. It is quite simple, but for some reason, integrity is revolutionary in today’s crypto space.
First, the original offer tied to the token must be honored to those who purchased and staked the token.
Second, the issuer must make clear that there are no negotiated rates apart from the rate tied to the token.
It is not unlike 19th Century banks issuing banknotes in the organic emergence of the gold standard that brought about The Gilded Age outlined in my last article. If either or both of these rules are broken it is shitcoin. Any promoted value becomes meaningless.
The BMEX token was promoted for purchase and staking with the basic free rate formula outlined on January 4, 2023. In addition to the published rates tied to the token, Bitmex offered specials. For example, 50,000 staked BMEX was arguably the best fee rate 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.
Bitmex expected the market to see the value of the BMEX token. And a few of us did! But this takes time. Shitcoins have a deserved bad reputation. Due to the TOS, they are changed on a whim. There is no legitimate utility coin in existence. . . yet.
I thought the Bitmex Exchange might prove to be the exception and that they understood the importance of honoring the promises tied to the BMEX token.
Instead, when they did not get immediate results, they fell back on the standard terms of service (TOS) claiming they could change the rates at any time and were under no obligation to honor the published rates they used to sell the token for the past 20 months. This is the bullshit of shitcoin lawyers who write TOS.
Under the TOS fees can change at any time, but it is a stretch that a rate change can be retroactive to those who purchased and staked BMEX based on the January 4, 2023, published rates promoting the token.
The market effect is that no matter what hype Bitmex uses now to promote the BMEX token, all new promotions are meaningless. The newly published fees are simpler, but the rewards are substantially less. And since better fees can be privately negotiated apart from BMEX, the token is meaningless.
Because Bitmex abandoned the integrity of the BMEX offer, the support team is now working 24/7 doing what their fee BOT did transparently and automatically with their published January 4, 2023 fee structure.
The back office at Bitmex must be a nightmare now with traders like me negotiating new rates with the support staff.
Coke did not understand its mistake until the market reacted. The same lesson is about to be learned at Bitmex.
Will Bitmex take the same corrective actions Coke did and restore what was not broken? Bitmex became the premier derivative market because it followed its own course. Bitmex did not react to the competition because there was no competition at its founding.
Honoring commitments tied to a utility token is unheard of in the world of shitcoins. There is no competition for legitimate utility tokens because there are none!
Over the next 14 days, I will unstake and sell the BMEX token and never buy again. That is how a free market works.
Hopefully, Bitmex will quickly see the light. If they don’t, the future for Bitmex to regain its stature is bleak and will go the way of all shitcoins . . . slowly dying but never disappearing.
UGLY OLD GOAT
