What is FTX Token (FTT)?

Deep Dive

1. Purpose & Value Proposition

FTT was launched as the backbone of the FTX exchange ecosystem. Its primary value was to create network effects by rewarding users and reducing their costs. Holders could receive trading fee discounts, use FTT as collateral for futures positions, and access exclusive features like early token sale participation. The token was integral to FTX's aim of building a loyal user base and improving platform liquidity.

2. Tokenomics & Governance

The token employed a deflationary model. According to FTX's mechanism, 33% of all trading fees, 10% of the reserve fund, and 5% of other commissions were used to buy back and burn FTT tokens (CoinMarketCap). This process permanently removed over 20 million tokens from circulation, aiming to create scarcity and support the token's value over time. Governance was centralized, with the FTX team controlling key decisions.

3. Ecosystem Fundamentals & Current Reality

FTT's utility was tightly coupled with the FTX exchange, which offered derivatives, leveraged tokens, and OTC trading. Features like clawback prevention and a centralized collateral pool were innovative for their time. However, following FTX's collapse and bankruptcy proceedings, the token's core functionalities became obsolete. Its price action is now primarily driven by speculation around legal outcomes and creditor repayments, rather than active utility.

Conclusion

FTT is fundamentally a legacy exchange token whose designed utility vanished with its parent platform's failure. Its ongoing existence is a speculative asset tied to bankruptcy proceedings. What new purpose, if any, could possibly be rebuilt around this token in the future?