FTX is a cryptocurrency derivatives exchange launched in 2019 that offers OTC trading, options, and futures trading. FTX was created by some of the world’s biggest crypto traders to solve the problems of existing crypto futures exchanges, such as low liquidity, slow trading, and clawbacks, which happen when funds are taken from traders to cover other trader’s losses.
The native FTX token is FTT. FTT coin is a utility token that can be used to help lower trading fees, or serve as collateral against futures positions. Investors can also stake FTT crypto to earn interest and get the chance to win NFTs.
Learn more about how FTX may provided needed solutions for the crypto derivatives market, and why investors may want to consider FTT coin.
How Does FTX Token (FTT) Work?
FTX Exchange is one of the top centralized cryptocurrency exchanges for derivatives and crypto spot markets. It was founded in 2018 by Sam Bankman-Fried, an MIT graduate who worked at Jane Street Capital. FTX offers a range of crypto investments, including derivatives, options, volatility products, and leveraged tokens. FTX also offers spot markets in 100-plus cryptocurrency trading pairs.
Perhaps most important, though, is that FTX offers solutions for some common problems with crypto derivatives trading. Millions of dollars have been lost due to the way the existing crypto futures exchanges are set up, so FTX aims to solve that through a multi-tier liquidation model that offers leveraged tokens, clawback prevention, universal stablecoin settlement, and a centralized collateral pool.
How FTT Works
Traders can use the FTT token to benefit from features such as lower trading fees on the exchange, enabling tighter trading spreads for OTC trades. FTT is available for staking, and investors can earn interest that way. Note, however, that FTT is currently not available to traders in the United States.
Traders can also use FTT as collateral for future positions. This use case increases market demand for the FTT token. Additionally, FTT can be used to create leveraged tokens.
FTX has an insurance fund that provides a net gain when there are significant price movements in the market. Some of the net gain gets distributed amongst FTT token holders.
FTX also offers the option for crypto institutions to purchase a white label version of the OTC exchange portal and futures exchange, and those white label versions can be purchased using FTT and utilize the FTT token.
FTX exchange has more plans for derivative products using FTT in the future as well.
FTX platform uses a three-tiered liquidation model to prevent clawbacks. Other crypto derivatives exchanges have had issues with customers’ funds being claimed by socialized losses, so the FTX model is set up to prevent that from happening.
Centralized Collateral and Universal Settlement
Derivatives on the FTX platforms are settled using stablecoins using one universal margin wallet. This differs from other crypto futures exchanges, which split collateral across many different wallets. When collateral is split up there is a risk that traders’ positions get liquidated, and FTX aims to overcome that hurdle.
Rather than using the traditional margin trading model to make leveraged trades to multiply their gains, FTX offers leveraged token trading. The leveraged token feature allows traders to take a leveraged position without trading on margin. Rather, there are tokens that are already leveraged, such as a 3x short Bitcoin token that traders can purchase.
Advantages and Disadvantages of FTX Token (FTT)
As with any trading platform, FTX has its pros and cons. Here are a few to consider.
There are several advantages to the FTX token. These include reduced trading fees, the ability to use the token as collateral against futures positions, and the ability to stake the token to earn interest.
The company has also exhibited some growth potential. FTX recently acquired derivatives company LedgerX, which is licensed to operate in the U.S. This acquisition may enable FTX to expand their U.S. operation. If this happens they will have the advantage of bringing their international experience and footing to the U.S. market. FTX also received $900 million in funding, which will help them expand.
The leveraged token model allows traders to make leveraged trades without the complexity of traditional margin trading. (Note: Although derivatives create the opportunity for significant gains through leveraged trading, they can also result in serious losses.)
Last, the leadership team (detailed below) is considered experienced and well-regarded. Founder Sam Blankman-Fried has also spoken out in favor of greater regulation of the crypto markets.
Traders in the U.S. currently only have limited access to FTX’s offerings due to regulations. FTX operates a separate site for U.S. traders which can be found at FTX.us. However, FTX may offer additional trading opportunities to U.S. customers in the future.
Although there are hopes for expansion into the U.S. market, it is also possible that increased regulation will prevent this and even halt some of FTX’s operation in other countries. There are ongoing talks about regulating crypto exchanges which will inevitably result in more regulation across the board. However, how that regulation will affect FTX is yet unknown.
• Holding FTT crypto can allow traders to pay lower fees, leverage their positions, and stake FTT coin.
• FTT crypto currently isn’t available on U.S. exchanges or to U.S.-based investors.
• Recent acquisition of LedgerX suggests FTX may find a way to enter the U.S. market.
• The future regulations of derivatives is unknown, and may impact FTX.
• Leveraged token model holds advantages over margin trading.
• Experienced leadership team has indicated support for crypto regulations.
Who Created FTX Token (FTT)?
The leadership team of FTX has a strong background in the crypto markets.
Sam Bankman-Fried is the co-founder and CEO of FTX Cryptocurrency Derivatives Exchange. He is also CEO of quantitative trading firm Almeda Research. Previously he was a trader at Jane Street Capital and director of development at the Centre for Effective Altruism.
Gary Wang is the co-founder and CTO at FTX, and the CTO at Almeda Research. Previously he worked as a software engineering intern at Google and Facebook.
Both Bankman-Fried and Wang are graduates of the Massachusetts Institute of Technology (MIT). They started Alameda Research in 2017, before founding FTX.
Why Does FTX Token (FTT) Have Value?
There are many types of cryptocurrencies, and FTX token offers a unique value proposition. FTX token has value because it offers unique features not offered by other crypto derivative products.
The FTX ecosystem solves some of the problems of crypto derivatives trading and offers benefits such as staking and low fees. FTX exchange has already grown significantly, and due to recent funding and support it appears poised to continue growing.
Price of FTX Token (FTT)
FTT is worth about $41.98, as of March 16, 2022. It’s the 26th largest cryptocurrency, with a market cap of about $5.77 billion. About 39% of the total supply of FTT is currently in circulation; the total supply is about 345 million.
Why Use FTX Token (FTT)?
For traders interested in trading crypto derivatives with low fees, FTT has a clear use case. The ability to stake the token to earn interest may also be appealing to investors, although as of March 2022 FTT was not available for trading in the U.S.
Outside of the U.S., any trader currently using FTX exchange or planning to use it may want to use FTT. By using FTT, FTX customers can take advantage of the many benefits offered by the exchange.
How Can I Buy FTX Token (FTT)?
According to the FTX website, “FTX Token (FTT) is not available for sale or transaction in the United States or other prohibited jurisdictions. Traders who are established in, incorporated, located or residing in the United States are not permitted to transact in FTT.”
Those located in permitted jurisdictions can buy FTT on the FTX exchange as well as other exchanges such as Binance, Bitfinex, Mandala Exchange, Bybit, Huobi Global, and Ascend EX.
It can be purchased on an OTC such as Genesis Block HK or using certain crypto ATMs. As of March, 2022, FTX exchange lists spot FTT/USD, FTT/USDT, and FTT/ BTC markets.
FTT is ERC-20 compatible. Once traders buy FTT they can keep it on an exchange, store it using one of the many available cryptocurrency wallets that accept FTT.
FTT token security audits are completed by the Blockchain Consilium auditing firm.
Does FTX Token (FTT) Have Staking?
Yes. FTX allows traders to earn interest through crypto staking. Traders can stake FTT token on the FTX exchange. It offers referral rates, airdrop perks, a maker fee rebate, and other benefits.
FTX exchange also repurchases tokens from traders on the FTT/USD market and burns them each week.
FTX Exchange is one of the top centralized cryptocurrency exchanges for derivatives and crypto spot markets. It was founded in 2018 by Sam Bankman-Fried, an MIT graduate who worked at Jane Street Capital, and Gary Wang, the CTO, also an MIT grad and a software engineer.
Bankman-Fried and Wang set up FTX to supply solutions to today’s ever-evolving crypto derivatives markets. Although U.S. traders cannot trade FTT, the native utility token, at the moment, FTX offers a range of crypto investments, including derivatives, options, volatility products, and leveraged tokens. FTX also offers spot markets in 100-plus cryptocurrency trading pairs.
Traders can use the FTT token to benefit from features such as lower trading fees on the exchange, enabling tighter trading spreads for OTC trades. FTT is available for staking, and investors can earn interest that way.
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