Margin trading on the bitmax token is a very dangerous idea. Many traders have not recovered yet since the last btmx dump.
All tokens with low volume are a bad ideia to trade on margin. I personally only trade with margin on Bitcoin and Ethereum. If bitmax token or any other coin has more than 100 million dollars on the weekly volume I might consider using margin but before that there is no way I am going to risk to get burned.
So far I have seen most margin traders talk about only trading wIth this 2 currencies ETH and BTC due to the same reasons you gave, is there no other coins or token that can be traded on margin save for this 2?
I believe ETH and BTC are being used for margin trading because it is the most trusted cryptocurrencies among all. I believe if other cryptos can offer the same assurance as these two, I believe it will be used for margin trading too.