FTX is one of the most stable and successful exchanges in the world. Additionally, it has its own FTT exchange token. In this article, we’re going to explain what FTX is and who created it. How does FTX work, How does FTT crypto work, what is FTT coin, and what are my thoughts on it?
What is FTX?
FTX is a cryptocurrency exchange that primarily focuses on derivatives and leveraged goods. Derivatives are those assets that draw their worth from particular items, which in this case are cryptocurrencies.
In addition to derivatives trading FTX also offers several features like spot trading, futures trading, leveraged tokens, and many more. From its foundation in 2018 till now FTX has enjoyed enormous popularity and has become one of the major cryptocurrency exchanges in the world. Its popularity can be illustrated by the fact that celebrities and superstars alike are jumping on the bandwagon. Sports superstars like tom Brady and Steph curry have already backed FTX. While shark tank’s Kevin O’leary has volunteered to become a spokesperson for the exchange it seems that the sky is the limit for FTX.
Who created FTX?
FTX was founded by Sam Bankman-Fried who is a MIT graduate. Before starting FTX Sam Bankman-Fried used to work at jane street capital. He was also the co-founder of Alameda research together with Gary wong. Gary Wong is presently the chief technical officer at FTX and used to work at google as a software engineer.
Megaman freed and Gary wong along with Nishad Singh head of engineering created FTX in 2018. Sam Bankman-Fried is a fervent believer in effective altruism, which is a utilitarian movement that supports doing as much good as possible in one’s life. So he has dedicated billions of dollars to charity. In addition to this one percent of FTX’s net trading fees also goes to charity.
FTX is headquartered in the Bahamas and is registered in Antigua and Barbuda. It remains unregulated in us. However, all is not lost for us-based crypto traders as they may access its partner company known as FTX.us, which is registered with FinCEN. There’s a severe lack of trading alternatives in FTX.us and the account creation process is also substantially tougher.
How does FTT crypto work?
Futures trading is one of the trading types covered by FTX’s expertise in derivatives. Leveraged trading is a part of the futures market. This implies that if you invest in a position, you may be borrowing money or taking out a loan. This increases the size of your entire position and could produce sizable profits, but it could also produce disastrous losses. The majority of FTX’s futures contracts come with up to 101x leverage. If we compare this with the rest of the industry then Binance is the obvious leader here by providing up to 125x leverage, while BitMEX for example provides 100x.
By providing a variety of call and put options, FTX also gives its users the opportunity to speculatively predict the price of their positions in the future. These options provide the user the right but not the obligation to buy at a future strike price. Likewise, there’s also the option of moving contracts. These contracts allow the user to wager on how far the price of a token will fluctuate over a defined period of time. Essentially what this implies is that depending on the parameters of the contract the growth or decrease in the price of the token will result in either a profit or loss based on what the user is bet on.
In addition to its derivative trading choices, FTX also features spot trading markets. Here customers can purchase and sell cryptocurrencies quickly or put in a market order for the price at which they would want to buy or sell. More than 100 different trading pairs are currently available on the exchange. It offers trading for all the leading cryptocurrencies, including BNB, Ethereum, bitcoin, and XRP. Another intriguing characteristic of FTX is that it permits the trade of leverage tokens. It primarily facilitates the trading of erc20-based tokens which gives up to 3x leverage to the traders.
What this means is that if a user opens a position of eth to us dollars at 3x long for eth and Ethereum goes up by 5% then the leveraged token would go up by 15% and vice versa if it goes down. FTX also has an insurance fund, traders who use 50x to 100x leverage and their trades incur significantly higher costs these fees are subsequently remitted to this insurance fund. The insurance fund is used to help avoid the losses of the traders in the event of sudden volatility in the market.
For example, if the FTX liquidation engine fails due to a huge decline in the price of bitcoin or a similar catastrophic occurrence happens then the traders are compensated for their unfairly canceled positions through the insurance fund.
What is the FTT coin?
The FTX exchange’s native token is called FTT. In terms of function, it can be likened to how BNB functions within the Binance exchange. Holders of FTT are entitled to cheaper trading costs and collateral for futures trading. Additionally, they are entitled to any profits made by way of the FTX insurance fund. This trade is known as socialized gains.
Another similarity with BNB is that FTX wants to burn at least half of the total amount of FTT, thus generating scarcity and boosting the overall value of the token. FTT ranks among the top 30 most valuable cryptocurrencies in the world with a market cap of approximately 8 billion at the time of writing.
Where can you buy FTT crypto?
FTT coins may be purchased on major crypto exchanges like Binance, Okex, or FTX.us, identical to the way one would buy any other cryptocurrency you can either place a market buy or a limit buy. With a limit buy you choose the price you’re ready to pay and your order gets completed once the token price hits your chosen limit price. You can place a market order and agree to buy the token at the current market price, which will almost immediately result in the fulfillment of your order if you need it right away. If you’re interested in trading FTT you may do so by visiting FTX.
FTX’s most immediate problem is the level of competition it has to deal with from the previously established and successful crypto exchanges. These exchanges include giants like Binance and Coinbase while also including more popular exchanges such as Kraken, Okex, and Gemini. Another problem regarding FTX is that its overall functioning and interface are much more suited to experienced crypto traders. Newbies and others who are inquisitive about crypto may find alternative exchanges such as Binance to be a bit more user-friendly. Although FTX is a relative newcomer to this business its spike in popularity together with its numerous celebrity endorsements has demonstrated that it’s a viable contender.
Related: Why Decentralized Exchanges are the future of crypto trading?
As always I hope you learned something new about cryptocurrency from this article. Is there anything you’ve learned about FTX that you didn’t know beforehand? So what are your thoughts on FTX if tom Brady and Steph curry endorse it I’m curious where you think FTX is going in the future leave a comment below.