Hey guys :) I’m back with another comprehensive Q&A piece, this time for the up-and-coming cryptocurrency derivatives exchange – FTX (FTT).
FTX is one of the industry’s fastest-growing cryptocurrency exchanges built by traders, for traders. FTX provides an intuitive new trading platform with a wide range of innovative products that are robust enough for professional trading firms and intuitive enough for first-time users.
Hope you enjoy!
The list of Q&A is kind of long so first comes the list of questions that I have prepared the answers to:
- What is FTX Exchange?
- Who and When Created FTX?
- What is $FTT Token Used For?
- How is FTX Different Than BitMEX?
- What is Unique About FTX vs Other Crypto Exchanges?
- What is FTX Serum?
- What are Some Notable FTX Partnerships
- Where to Sotre $FTT?
- Where to Buy & Sell $FTT?
1. What is FTX Exchange?
FTX website homepage
FTX Exchange is a cryptocurrency derivatives exchange that offers traders a variety of innovative products including industry-first derivatives, options, volatility products, leveraged tokens, and OTC trading.
The FTX Exchange prides itself on the following key advantages:
- A large number of trading products
- Low trading fees
- Hourly funding rates
- Robust Insurance fund and policy
- Advanced & intuitive trading interface
Core FTX Trading Product: Cryptocurrency Derivatives
The core product of the FTX Exchange is cryptocurrency derivatives trading – where contracts based on the underlying asset are traded instead of the asset themselves. Derivatives trading allows for trades with higher leverage and enables many more types of products.
FTX allows up to 101X max leverage on the following derivatives products:
- Perpetual Futures - Futures is a type of standardized forward contract, a legal agreement to buy or sell an asset at a predetermined price.
- Options - Options are a special form of futures contract that gives the holder the right but not the obligation to sell at a future strike price.
- MOVE - These are contracts that settle in the absolute change in the price of a coin over time. Time periods can be daily, weekly, or quarterly.
- Spot - Spot trades are market matched orders for an asset.
- Leveraged Tokens - are special tokens that provide leveraged exposure to cryptocurrency markets without having to manage a leveraged position.
Supported Crypto and Fiat currencies
FTX Exchange supports over 30 cryptocurrencies and is continuously adding support for more. The exchange allows its users to vote on new tokens to be listed and rewards those who vote and trade the newly listed coins.
Also, unlike most centralized exchanges, FTX supports the latest and hottest DeFi coins such as Ampleforth (AMPL), Swipe (SXP), Solana (SOL), Yearn.finance (YFI), ChainLink (LINK), Compound (COMP), Thorchain (RUNE), Kyber Network (KNC), Balancer (BAL), Maker (MKR) and DMM Governance (DMG).
Additionally, FTX offers trading for several cryptocurrency indices such as EXCH – which is comprised of several exchange tokens including BNB, HT, OKB, and LEO.
As for fiat on-and-off ramps, FTX Exchange supports USD, TRY, AUD, GBP, EUR, SGD, ZAR, CAD, CHF, BRL, and HKD fiat currencies as well as most stablecoins.
2. Who and When Created FTX?
FTX founders Sam Bankman-Fried and Gary Wang
FTX was launched in April 2019 by two professional traders, Sam Bankman-Fried (CEO) and Gary Wang (CTO) and the motto of the exchange is “FTX is a cryptocurrency exchange built by traders, for traders.”
FTX’s founders and team are highly experienced in the realm of trading and technology. They come from leading Wall Street quant firms and tech companies such as Jane Street, Optiver, Susquehanna, Facebook, and Google.
As well, they have backgrounds in equity derivatives trading and understand both how derivatives are traditionally designed, and what derivatives there is market demand for.
Prior to founding FTX, both its founders worked at and established Alameda Research – a top cryptocurrency liquidity provider and $100million AUM quantitative cryptocurrency trading firm.
Prior to founding FTX and Alameda Research, Bankman-Fried was previously a professional trader at Jane Street and worked for The Centre for Effective Altruism as their Director of Development. As for Wang, he previously worked at Google and at Facebook as a Software Engineer and has always had a strong interest and understanding of trading.
FTX is now owned and operated by FTX Trading Limited, a company incorporated in Antigua and Barbuda, and its main base of operations is out of Hong Kong.
3. What is $FTT Token Used For?
FTX Token ($FTT) logo
FTX Token ($FTT) is an exchange utility token that acts as the backbone of the growing FTX ecosystem.
FTT Use Cases Include:
- Trading - FTT can be traded on FTX and other cryptocurrency exchanges
- Burning - FTX buys and burns FTT equal to one-third of all exchange fees
- Collateral - FTT is usable as collateral on FTX
- Socialized Gains - FTT gets socialized gains from the insurance fund on FTX
- Fee Discounts - FTT holders get a fee discount and tighter OTC spreads
The total supply of FTT was 350,000,000 FTT tokens but is now 344,355,946 FTT as of August 26, 2020. The buying and burning of FTT will continue until at least half of all FTT is burned (removed from circulation forever).
FTT can be traded just like any other cryptocurrency on a wide variety of reputable and liquid cryptocurrency exchanges. See question #9 for more information on buying and selling $FTT.
FTX will buy and burn FTT equal to 33% of all fees generated on FTX markets. Additionally, FTX will burn 10% of net additions to the insurance fund ('Socialized Gains'), and 5% of fees earned from other uses of the FTX platform.
FTT is bought and burned on a weekly basis in accordance with a schedule adopted by FTX.
By default, FTX will use FTT as collateral for your leveraged trades. Collateral is used for the purpose of liquidations in the event that your USD balance falls too far below zero.
FTX has managed to net increase its insurance fund by a sizeable amount thanks to its unique backstop liquidity provider program. As a result, FTX distributes a portion of the net insurance fund gains to FTT holders.
FTT gives fee rebates to holders. You can find the current fee structure here. Also, FTT token holders benefit from tighter spreads on FTX OTC trades.
4. How is FTX Different Than BitMEX?
FTX and BitMEX differ in the following ways:
- Trade Experience
- Available Contracts
- Trading Fees
- Supported Cryptocurrencies
Both BitMEX and FTX offer very intuitive trading experiences, but FTX appears to better in two key areas:
1) BitMEX only supports withdrawals in BTC once every 24 hrs, while FTX supports withdrawals in a wide array of cryptocurrencies, stablecoins, and fiat currencies at any moment the user wants.
2) On BitMEX, leverage is set with the use of a sliding bar that can be adjusted based on the desired leverage. On FTX, leverage is set by simply inputting the amount of margin that you want to borrow and the FTX will automatically calculate the required leverage based on your equity in your account.
BitMEX only offers perpetual swap contracts for Bitcoin and Ether, and regular futures contracts for Bitcoin Cash, Cardano, EOS, Litecoin, Ripple, and Tron.
FTX, on the other hand, offers more than 15 crypto perpetual swaps, 3 altcoin indices, 45 leveraged tokens, MOVE contracts, and more.
BitMEX charges traders a fixed 0.075% taker fee and pays traders a fixed -0.025% maker fee and has no withdrawal fees, other than the network fee.
FTX has a standard 0.07% taker fee and 0.02% maker fee and the FTT token can be used to lower trading fees.
BitMEX only supports BTC, ETH, EOS, XRP, LTC, BCH, TRX, and ADA while FTX supports 30+ cryptocurrencies, stablecoins, and fiat currencies.
BitMEX requires KYC while FTX does require KYC to withdraw $1,000+.
5. What is Unique About FTX vs Other Crypto Exchanges?
FTX Leveraged Tokens (source)
FTX is a unique cryptocurrency exchange compared to others because it offers unique tradable products not seen anywhere else and offers highly sophisticated and advanced features for professional traders and institutions.
Unique FTX Trading Products:
FTX enables you to bet on political events such as the outcome of the 2020 Presidential election. You can also trade perpetual futures on things like Uniswap’s revenue. No other crypto exchange is offering futures products like these.
Leveraged Tokens were introduced first by FTX (then Binance started to use them too). They are simply ERC-20 tokens that give traders leveraged exposure to cryptocurrency markets without the complicated specifics of managing a leveraged position. There are 4 leveraged tokens for every future on FTX:
- Bull +3x
- Bear -3x
- Hedge -1x
- Half +.05x
FTX offers traders the ability to trade unique index funds such as:
- DeFi Index Perpetual Futures
- Shitcoin Index Perpetual Futures
- Exchange Token INdex Perpetual Futures
- Privacy Index Perpetual Futures
- + Many More
Unique FTX Features:
- Quant Zone - users can build and share custom automated trading strategies
- FTX Trading Competitions & Events - DeFi trading, man vs machine, spot trading, futures trading, options trading, etc.
- FTX OTC - over the counter trading with zero fees, tights spreads, and fast settlements
6. What is FTX Serum?
Serum website homepage
Serum is a completely decentralized derivatives exchange with trustless cross-chain trading. It’s a decentralized exchange (DEX) offered by FTX and the Serum Project and is now fully permissionless and operated by the community.
Important Serum Features:
- Fully Decentralized - prices do not rely on centralized oracles.
- Cross-Chain Support - trustlessly exchange assets between chains.
- On-Chain Stablecoin - Serum uses its own decentralized stable coin, SPL, with no single point of failure.
- Orderbooks - decentralized, automated, limit-order based.
- Speed - Serum is powered by Solana to make it fast and efficient while being interoperable with ETH.
Serum also has its own native cryptocurrency called Serum (SRM), which is the backbone of the Serum ecosystem. SRM utility on the Serum DEX includes:
- Reduced fees on Serum
- Staking rewards
- Buy and burns for 100% of net fees
- Specialized governance
7. What are Some Notable FTX Partnerships
FTX has partnered and collaborated with many leading cryptocurrency firms, including but not limited to:
- Almeda Research
- True USD
- Paxos PAX
- Fenwick & West
- Proof of Capital
- Consensus Lab
- Galois Capital
- FBG Capital
8. Where to Store $FTT?
Official FTX mobile wallet
The FTX Exchange Token (FTT) is an ERC-20 token residing on top of the public Ethereum blockchain. That said, you can store FTT in any ERC-20 token supported wallet.
However, perhaps the best place to store FTT is directly on the FTX exchange to benefit from fee discounts and tighter spreads on the FTX cryptocurrency exchange.
Popular FTX Exchange Token (FTT) Wallets:
- Trust Wallet (mobile)
- Argent (mobile)
- Coinbase Wallet (mobile)
- Ledger Nano S (hardware)
- MyEtherWallet (MEW) (web)
In addition to the above-listed wallets, FTX Exchange Token (FTT) can be stored on a wide variety of other reputable wallets supporting ERC-20 tokens.
9. Where to Buy & Sell $FTT?
FTX Exchange Token (FTT) can be bought and sold on a peer-to-peer (P2P) basis but the most popular way to buy, sell, or trade FTT is through cryptocurrency exchanges.
You can buy FTT with cryptocurrency or fiat currency at the following top exchanges. In most cases, you will be able to buy FTT with BTC, ETH, fiat, or stablecoins.
- FTX - USD, USDT, BTC
- Binance - USDT, BTC, BNB
- Bitfinex - USD, USDT,
- Huobi Global - USDT, BTC, HT,
In addition to the exchanges listed above, FTX (FTT) is also traded on a variety of other exchanges and platforms that enable people to buy, sell, or trade cryptocurrencies.
Hope you enjoyed that read :) Let me know if I have missed something in the comments.