BitMax.io AMA Session with Dr. George Cao about UAT

(September 1, 2019)

Guest:

Dr. George Cao, Co-founder and CEO of BitMax.io, strategic advisor of token economics of UltrAlpha Token (UAT) (Dr. Cao)

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.

Opening Remarks:

Dr. Cao: Hello everyone! I hope you are having a nice weekend! Over the past few days, I got many questions regarding UAT token. As the designer of the token economics, I feel it’s the time to have an AMA session to answer the questions.

So UAT just did an announcement about how to participate in the products listing on UAT and what these products are. As we stated in our white paper, the mission of UAT is to make the best investment products from third parties available to people, and also help the best teams to raise money.

The token economics has 2 parts: inflation and deflation.

1) Inflation. Most projects are always in the inflation mode, either through mining or time-related release. UAT is different; the release mechanism is similar to BTMX. Once someone invests in any of the products on UAT platform, portions of the tokens are released.

The rationale behind the mechanism is that once someone invests, the UAT platform increases its value. Therefore, the value of the project increases and we can afford to add some more liquidity to the market. It’s so much better than time-related release which increases the circulation for no reason.

2) Deflation. Deflation is the core idea of the UAT token economics. In general, it provides strong support to the token price. There are many deflation methods:

A) Under the current initial phase with BitMax.io strategic partnership, for trading commission on BitMax.io, an average of 12 to13 thousand tokens are getting removed from circulation daily. In the long run, it would create support for the price.

B) 10% of the profit from any listed products will be set aside. They will be used to purchase UAT tokens from the secondary market and removed from circulation. This is the most important part of the deflation mechanism. Imagine if the AUM increases to a significant level, the monthly deflation will be great.

C) Other scenarios where people can use UAT: 1) Check balance, check history, switch products. 2) Fees for early redemption.

All the features are designed for 2 reasons: 1) make sure the project can generate cash revenue, 2) control and reduce token supply.

Now I am ready for the first batch of questions.

Q&A:

1. Q: Hi George, I noticed that the funds only have test run (back testing) results, which doesn’t mean much to be honest, as back testing is not equal to real results. Do they have past results of the Alpha Pro Arbitrage/Market Making Strategies that are offered as investments on the UAT platform?

Dr. Cao: Test run means run on a small scale in the real market. It’s not back test. They are real trading results.

2. Q: I have been following UAT for months now. This is something that investors would want in this type of market especially. Recent few announcements were really confusing. UAT announced 150M UAT permanent lock-up from strategic investors. I have four questions regarding it.

1. Who are these strategic investors?

2. Why will these strategic partners agree to lock up the tokens for which they have paid?

3. Even if they agree, these tokens are locked up anyway and you are just permanently locking it up which has no effects on secondary market. you might say that these effects will be seen in the long term, but in crypto market, there’s no such thing as long term, to be honest.

4. As for refunding locked UAT allocation, what will be done with those refunded tokens? Will those be permanently locked?

Dr. Cao: UAT has many strategic institutional investors, including big names that invested in BitMax that people are familiar with. The reason for permanently locking their tokens is because:

1) market condition has changed in a recent couple of months. The team and the investors think the current market condition doesn’t support a project with a large circulation supply. Therefore, the team and strategic investors decided to reduce max supply to properly position the project. The decision doesn’t change the current circulation supply, but it does reduce the long-term supply. We didn’t expect this to have an immediate market reaction.

2) Several institutions like the vision of the team and want to buy private sales quota. We are happy to serve as a bridge between buyers and sellers. Also, we will enable UATP similar to BTMXP so that transfer can happen in the secondary market.

3. Q: When do you plan UAT to be listed on new exchanges?

Dr. Cao: Good question. We do have a listing plan. However, we want to show some more progress with the products we offer first, also including website, listed products, accounting and reporting system and more institutionalized market approach. And then we will make UAT available to more people. It may take a while, but everything is on schedule now.

4. Q: About how long? For a month or 6 months? Is there any specific schedule?

Dr. Cao: We need 2 months to upgrade UAT products and after that, we will reach out to exchanges. In terms of the actual listing date, it is difficult to give out detailed schedule because it largely depends on other exchanges’ schedule. But we will get there.

5. Q: Hi Dr. George Cao. Based on the latest info released on the product launch, it seems that it does not require UAT tokens at all to subscribe to products. What is the point for users to hold UAT tokens if they do not intend to invest in the products? Then where is the demand and what will be the main factor to drive the UAT token price up?

Dr. Cao: True and false. So UAT tokens can be used in 2 ways, either as an incentive for people to invest, or as a price for people to pay for the quota. Let me give you an example. If a product has a 5% historical annual return, there may not be enough people willing to invest. In this case, UAT will be used to incentivize investors to invest. If a product has 100% historical return, guess what, there will be so many people who want to invest. The product won’t be able to take all. In this case we will have either auction or lottery mechanism, but an investor must pay UAT to secure a quota. In addition, people hold UAT for 2 reasons:

1) if you are an investor, many operations on UAT platform will require UAT,

2) of course, with the 10% profit set aside for secondary market purchase, people would expect the value to increase if all else is equal.

6. Q: I really like the products and investment detail. I really think a minimum UAT quota should be at least held to invest in anything. Even if you are investing in USDT.

Dr. Cao: It depends on the products. Right now, we want to attract more users, down the road I am sure we will have some mechanisms like this. Thanks for the suggestions.

7. Q: The products are really great. I’m just amazed that the team hasn’t forced people to use UAT as a staking mechanism to be able to invest USDT. It’s an easy way to reduce supply and promote UAT.

Dr. Cao: It will. Right now, it is in the promotional stage. We want to show more people and attract more users.

8. Q: You said “by long run”, so how long do you mean? This won’t affect UAT in years. If you charge UAT for all trading pairs, that is a different case. But I believe long-term here means 10 years, is that correct?

Dr. Cao: It’s not basic. In the traditional financial market, no fund would release their complete trading history to public due to proprietary reason. No fund would allow people to check balances except for the month-end statement. Of course, there will be basic free services. But for more advanced services, it makes sense to charge tokens. If we lock 12 thousand tokens per day, we will lock 5 million tokens per year. Current circulation supply is 29 million, reducing 1/6 will have a significant effect on support level. Also, UAT is similar to BTMX. Both have strong cash revenue potential. It’s a long-term project that would benefit people who are investors seeking longer-term value.

9. Q: What will you do to solve user experience issues?

Dr. Cao: Yes, user experience has issues. Please understand that every product needs many upgrades before achieving an optimal user-friendly level. I remember when Binance was first launched, my first reaction was that it was probably the worst exchange I had ever seen. But now it is quite easy to use. UAT team is constantly working on system upgrade and enhancement. It’s still a new project but there will be progress every month. Thanks for your support.

10. Q: It seems that we generally refer to “accredited investor” using the US definition with amounts expressed in USD. What happens if I am based in another country and the definition varies by country? Does UltrAlpha require the investor to meet both countries’ definitions, besides following my local laws & regulation?

Dr. Cao: That’s a good question. For now, we don’t have the capacity to do country-based requirement. But we will consider it in the future. Actually, the concept of “accredited investor” is very universal across the countries with similar requirements.

11. Q: Do you think 1.7% ROI a month is low considering crypto asset is a high-risk asset class?

Dr. Cao: I would argue that investors have different investment appetite. Some want higher return while some want stable return. That’s the beauty of the world: we have so many different mindsets tailoring different requirements.

If you have more questions or suggestions, please reach out to me or to the team. Thanks for joining me today everyone. It’s great to chat with you.