CoinMarketCap takes a deep dive into FTX Token (FTT), the official currency of FTX – a crypto exchange and derivatives trading platform, that saw over 200% gains around June 2021.
FTX Token (FTT) is the exchange token of the FTX ecosystem and will serve as collateral for futures positions, getting discounts on trading fees, receiving OTC rebates and more. The FTX trading platform provides leveraged tokens, OTC and futures trading, and plans to become the top crypto derivatives exchange in the blockchain world.
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Sudden Burst of the FTX Token
The FTX Token (FTT) took full advantage of the bullish run of the crypto market and spiked to its new all-time high of $66.50, which represents a whopping 42% increase in the token’s price. It didn’t stop there as it broke the threshold of $66.50 and set a new high of $70.21.
According to several crypto analysts, this major increase in price happened because of the increased public exposure and the announcements of partnerships and protocol launches by the FTX platform. FTX US announced the acquisition of LedgerX to grow further in the crypto derivatives market. FTX became the official crypto exchange sponsor of Major League Baseball in the US, and also announced the listing of Star Atlas on its platform, which is an NFT gaming project with a lot of hype behind it.
All of these major updates came in a short period and explains the massive increase of FTT token’s market cap, which increased from 4.46 billion to 6.58 billion in a matter of 24 hours. The price of the FTT token later decreased a little and traded at $64.96.
How Does FTX Token (FTT) Work?
FTX trading platform aims to be an exchange that can improve the imperfections of other crypto exchanges and provide its users with a platform that is easy-to-use and profitable for everyone. The official currency of the FTX trading platform is FTT, which can be used to acquire discounts and staking benefits from FTX.
The FTX trading platform charges minimal exchange and leveraged token fees. However, it provides exceptions for new products like the spot exchange, margin trading and options. It does not charge any deposit fees or withdrawal fees, except for ETH, ERC-20 tokens or BTC withdrawals (only < 0.01 BTC withdrawals are charged with a fee).
How to Stake FTT Tokens?
FTX provides a platform for users to stake their FTT tokens and gain rewards based on a variety of factors, such as referral rate, maker fee rebate and bonus votes, among other things.
Here are some of the benefits of staking FTT tokens on the FTX platform:
- Referrers who stake their FTT get a larger percentage of their references' earnings.
- Stakeholders receive free withdrawals of ERC20 and ETH daily.
- FTT stakers get a discount on FTT fees and also maker fee rebates.
- The Initial Exchange Offerings (IEO) for various NFTs and token projects on the FTX platform require tickets, which will be given to FTX stakeholders based on the number of their FTT tokens staked on the platform.
- FTT stakeholders become eligible for getting extra votes (depending upon their trading volume and number of FTT tokens) on the FTX platform.
Note: FTT tokens can only be unstaked after a period of 14 days. If a user requests their tokens to be unstaked, they will not be rewarded for that period. However, the good news is that users can pay a fee and get their tokens unstaked immediately.
The Vision Behind FTX Token (FTT)
The team behind the FTX platform is made up of veterans that have worked in Wall Street and big tech companies like Facebook, Google, Jane Street, Optiver and Susquehanna. With a diverse background in equity derivatives trading, the FTT token creators plan to overtake Bitmex and OKEx which are the leading crypto derivatives exchanges in the blockchain world.
The CEO of FTX, Sam Bankman-Fried (SBF) co-founded the exchange with Gary Wang (CTO) and Nishad Singh (Head of Engineering). After founding Alameda Research, a crypto quant trading firm and liquidity provider, the trio started working on FTX, an exchange "by traders, for traders." SBF felt the crypto space was lacking a professional-grade trading platform for complex products. FTX is headquartered in crypto-friendly Hong Kong, where SBF is also based. The founder has once served as a director at The Centre for Effective Altruism, and commits 1% of FTX net trading fees to charity. SBF is also an influential figure in the crypto space, with over 290K Twitter followers.
Unique Features Of FTX Token (FTT)
According to FTX's official website, its trading platform mechanisms are hard to replicate by anyone which makes it a unique asset in the blockchain world.
Leveraged Tokens
The FTX trading platform provides its users with leveraged tokens that enable traders to enter into short or leveraged positions without having to trade on margin. A trader who wishes to buy 6x short Ethereum, for example, can simply purchase a 6x short Ethereum leveraged token on FTX. ERC-20-based leveraged tokens can be listed on any spot exchange and leveraged tokens like BTC, ETH, EOS, USDT and others can be acquired by FTX platform users.
Universal Stablecoin and Centralized Collateral Pool
In many futures exchanges, collateral is dispersed over several distinct tokens and margin wallets, which makes it harder for traders to rebalance and avoid liquidating holdings. Therefore a centralized collateral pool and universal stablecoin settlement are needed. FTX derivatives are stablecoin-settled, requiring only one universal margin wallet to overcome these problems.
Clawback Prevention
When an account goes beyond bankruptcy, it triggers socialized losses, clawbacks and auto-deleveraging. If a user has a collateralized futures position and markets move against their account to the point where their net asset value is negative, the losses have to be fulfilled by someone. However, because no exchange can seize assets from a bankrupt account's owner outside of the system in crypto, the account owner is trapped with other users, the ones who aren't getting liquidated and will be paying the bills.
The FTX trading platform aims to cut down the socialized losses that occur in many derivatives exchanges by employing a three-tiered liquidation strategy that minimizes the probability of clawback.
According to the FTX platform’s official website, the backstop liquidity provider scheme will be sufficient to avoid any clawbacks. According to their internal tests, market movements of 40% in 20 minutes did not result in clawbacks and the combination of on-exchange liquidity and backup liquidity providers was able to supply to all of the almost bankrupt accounts before they fell under.
USDT Futures
Considering USDT's past volatility, many major crypto businesses need the means to hedge USDT deltas, and USDT futures will provide that feature to them.
Use Cases Of FTT Token:
Trading Fees: FTX futures trading fees are less and OTC spreads are tighter as compared to other crypto exchanges.
White Label Solutions: A white label variant of the FTX OTC site and futures market has piqued the curiosity of crypto institutions and large investors for which the purchase will be offered in FTT token.
FTT as Collateral: To increase the demand for FTT in the long run, it can be used as collateral in futures trading.
FTT Token Value: The value of the FTT token is directly proportional to the future expansion and upgrades of the FTX platform. Holders of the FTT token can expect a rise in their holdings as the price of FTT increases.
Create Leveraged Token Listing: Upcoming projects can pay a fee and generate leveraged tokens with their coin.
Token Burn/Revenue Share: The FTT that is bought from FTX will have a transaction fee, one-third of which will be utilized to repurchase FTT tokens and later become a part of the burning process.
Extra Gains For FTT Holders: When big market fluctuations will occur in the crypto market, FTT holders will profit from the FTX backup liquidity fund.
FTX Token (FTT) Tokenomics
There are a total of 350,000,000 FTT tokens. The current circulating supply is 170,923,766 FTT. 13,171,373 FTT tokens are burned and 64,862 FTT are yet to be burned. For the updated stats, visit this link.
FTX Token (FTT) Price
FTX Token (FTT) is now trading at $66.02, as of Sept. 6, 2021. Its 24-hour trading volume on exchanges is around USD $686,727,101.56.
FTX Token (FTT) Future Outlook and Price Prediction
As of Nov. 11, 2022, considering the current market condition, it is very difficult to say in which direction the FTX Token (FTT) will tilt. Therefore, it is advisable to keep an eye on market indicators before investing in this token.
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