FTX token in focus, the leading derivatives exchange

FTX token in focus, the leading derivatives exchange

By Austras | Crypto in focus | 12 Oct 2021


Back in 2016/2017 a group of traders found that there was a lack of exchanges that properly offered a strong platform for traders to leverage themselves with. This group consisted of Sam Bankman-Fried & Gary Wang who got together and founded FTX, a derivates exchange that will soon find itself to be one of the world's largest exchanges.

Background

FTX functions as a crypto future and derivates exchange where traders can leverage their position for higher risk but higher rewards. The exchange is hosted by a company of similar name, FTX trading LTD, this company was founded by active crypto traders that wanted stronger power in their frequent trades. At launch, the exchange saw liquidity mainly from one company, Alameda Research. Alameda is still providing liquidity for the exchange but that volume today makes up 5% as opposed to 100% at launch. Since the launch in 2017 the exchange has become one of the largest exchanges today with often top 3 daily trading volume in derivatives and top 5 in spot trading. 

Network

The exchange is the main focus of FTX trading ltd's arsenal and development. FTX has its own native token, aptly named FTX, this serves various functions which rewards users of the exchange and holders of the token. FTX token is built as an ERC-20 standard token on top of Ethereum. The token itself is centrally managed and maintained by the FTX exchange, it does allow for staking and governance by token holders to help guide decisions on the token. Security on the network is achieved mainly through the underlying smart contracts, the point of staking is to increase the benefits you get from your FTX tokens, these are listed below.

Use cases

The native token that has its value correlated to the performance of the exchange, higher adoption and use of the exchange sees higher value of the FTX token. Its main function is discounted trading fees if you use FTX for trading. It also offers users who hold or use FTX enhanced voting power and free gifts such as airdrops or NFTs. It's most popular function however is the usage of FTX as collateral for trading on the exchange. You can find a full list of the benefits you get from the token here on FTX's website.

FTX today

Time has only been helping FTX grow stronger and become more reliable. With the increasing use and popularity of FTX, its token will also see its value increase as the main use case for it outside of investing is on the exchange itself. The entire base idea of the exchange is to empower frequent traders and they have made improvements that set themselves apart from the competition. Other than increasing adoption of the exchange or without implementing new features to the token itself the token has found a solid place at its current marketcap ranking. It seems to remain strong for the remainder of FTX's lifespan, however long that may be.

Pros:
  • Good use case on its native exchange
  • Is backed by a strong exchange
  • Deflationary burn
Cons:
  • Centralized token
  • The exchange is niched for experienced traders

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Austras
Austras

Product manager & tutor, love learning & teaching others. || https://cointr.ee/dorfel


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