What is FTX Token (FTT)?

Deep Dive

1. Original Purpose & Ecosystem Utility

FTT was launched in May 2019 as the backbone of the FTX exchange ecosystem. Its primary value proposition was to deepen user engagement through tangible benefits. Holders could use FTT to pay for trading fees at a discounted rate, use it as collateral for futures positions, and stake it to gain access to exclusive platform features like early token sale participation. The token was built on the Ethereum blockchain as an ERC-20 standard token, making it compatible with a wide range of wallets and services.

2. Deflationary Tokenomics Design

A key feature of FTT was its engineered scarcity. The exchange committed to using 33% of all trading fees, 10% of its reserve fund, and 5% of other commissions to regularly buy back FTT from the open market. These purchased tokens were then permanently "burned" or removed from circulation. This buy-and-burn mechanism was intended to create a deflationary pressure on the token's supply, with over 20 million FTT reportedly destroyed, as noted in a CoinMarketCap article.

3. Current Reality: A Token Without a Platform

The collapse of FTX in November 2022 fundamentally altered FTT's nature. The exchange filed for Chapter 11 bankruptcy, and its operations ceased. Consequently, all the utility functions—fee discounts, staking, and collateral use—became obsolete. Today, FTT exists as a digital asset whose price is almost entirely driven by sentiment, speculation, and developments in the lengthy bankruptcy and creditor repayment process, rather than any underlying functional use case.

Conclusion

FTX Token transitioned from a utility-driven exchange token to a speculative asset defined by legal fallout, with its future inextricably linked to court rulings and asset recovery efforts. What new purpose, if any, could possibly be assigned to a token whose original platform no longer exists?