What is FTX (FTT Coin)
During the latest crypto price dip, market data provider The TIE praised the FTX exchange for being one of the 'safest exchanges to trade on', due to its liquidation policies. In comparison, crypto exchange Binance saw over 4 billion dollars of sudden liquidations in a single day.
But what’s so special about the FTX crypto derivatives exchange? What's the use case of the native FTT coin, and why is the project tipped as one to watch for the future?
Read on to get ahead of the crowd, and find out more about the quickly expanding FTX crypto ecosystem.
What is the FTX exchange?
The FTX exchange was started by a group of successful crypto traders in 2019, with the mission of bringing more trading options and higher security to fellow traders.
The platform initially specialised in crypto futures markets, where traders can create a contract, stipulating that they will buy or sell a certain amount of an asset, at a certain time in the future.
Once the predetermined market conditions come to pass, the buyer and seller are obliged by smart contracts to fulfill their part of the deal. This is a popular type of trade for those who wish to speculate on the price movement of an asset, without having to hold the asset itself.
Now, an even-more popular futures vehicle on the FTX exchange is the perpetual futures market, the main difference being that the trade is settled in the asset itself, for example Bitcoin. One advantage of this is that traders need never sell their BTC, but can continue to accumulate more and more of the scarce cryptocurrency with every successful trade.
Another advantage is that users can trade with higher leverage, meaning that the potential profits are higher, but also potentially magnifying the losses.
FTX currently offers over 150 perpetual futures markets, with the most popular ones being ETH-PERP, BTC-PERP and DOGE-PERP.
Who is behind the FTX exchange?
FTX was founded by Gary Wang and Sam Bankman-Fried.
Bankman-Fried is also the CEO of the Alameda Research firm, which provides liquidity to crypto markets worldwide, and the person responsible for ‘saving Sushiswap’ by migrating user funds from Uniswap, and then handing the project over to community governance.
Bankman-Fried has over 100,000 followers on Twitter, and is an oft-quoted member of the crypto commentariat.
Wang is a former Google and Facebook software engineer, and an MIT graduate in mathematics and computer science.
What utility does the FTT token have?
The FTT token is the native asset of the FTX exchange. There is a total supply of 345 million FTT coins, of which approx 95 million are in circulation at the time of writing.
The team at FTX claim to have carefully designed the FTT coin with positive network effects in mind, meaning that the price of FTT tokens should rise as the FTX exchange attracts more users.
These incentives include trading fee rebates for FTT holders, with the % discount increasing along with the amount of FTT held. FTT holders are also rewarded with weekly airdrops of the SRM cryptocurrency, which is the native token of a Solana-based decentralized exchange, also co-founded by Bankman-Fried.
Staking FTT also brings benefits, such as additional airdrops, bonus votes in on-chain polls, waived blockchain fees (especially useful for those who want to avoid rising gas fees on Ethereum) and increased referral rates for those who recommend FTX to their friends.
All of these measures give strong incentives for FTX users to hold FTT, and further price appreciation is encouraged by weekly token burns of over one third of the total revenue created on the exchange.
Due to popular demand, the FTT has also been added to the Exodus multi-coin wallet, giving Exodus users the chance to get in on what might soon become a key component of the crypto ecosystem.
How to create an account on the FTX exchange?
Setting up an account on ftx.com is easy and intuitive. Simply navigate to the page, and click on ‘register’ in the top right hand corner.
Fill in your details, making sure to back up your password somewhere safe, and then once you have your account open, ensure that you set up 2 Factor Authentication (2FA) under the ‘profile settings’ page, to keep your account secure.
You can now deposit assets onto the exchange and trade them for a number of cryptocurrencies, tokenized stocks and leveraged tokens, which multiply the amount that you stand to gain or lose with price movement.
If you elect not to upload your identification for a KYC check, you can withdraw up to 1000 USD per day. Completing the KYC up to Tier 2 level enables unlimited withdrawals from the platform.
What is special about the FTX exchange?
One thing that really makes the FTX exchange stand apart is the wide availability of blockchain-based derivatives products.
Derivatives on the blockchain are tokens that represent or derive their value from other assets, like stocks for example. On FTX, users can purchase a wide variety of company stocks, such as Apple, Google, Facebook, Netflix and Paypal, as easily as they can swap one cryptocurrency for another. This is an exciting development for the future of the stock market on the blockchain, and a glimpse at the huge potential of the FTX exchange.
Going forwards, trade volume on FTX is increasing exponentially, and they may capture a larger market share following regulation troubles faced by centralized competitors such as BitMex and OKEx, which also offer sophisticated trading options.
The trading conditions on FTX are hard to replicate, because of the huge amount of liquidity provided by Alameda Research, and the team’s fast development cycles that see them quickly and consistently bringing out new trading products and making improvements to the security of the exchange. And with the expansion onto Solana and an increasing amount of partnerships and acquisitions, The FTX ecosystem is growing quickly.
With these factors in mind, it seems that the FTX team has been successful in their mission to create a crypto exchange that was built by traders, for traders.
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.