What Is FTX Token (FTT)?
FTT is the native token of the FTX cryptocurrency derivatives exchange. You can check out the FTX token price on the FTT price chart placed above. With a focus on institutional-grade solutions, FTX provides users with OTC trading, leveraged tokens, and futures. The FTX crypto project is backed by Almeda Research, which is one of the top-tier crypto trading companies on the market. Overall, FTX aims to offer features that other derivatives exchanges don’t.
The main features of FTX include:
- Universal stablecoin settlement. The derivatives on FTX are traded through stablecoins, which means that you only need one universally-accepted margin wallet.
- Centralized collateral pool. The same collateral pool is used for all positions by default. Thus, any token stored in the central collateral wallet can be used as collateral.
- Clawback prevention. FTX employs a three-step liquidation model to reduce the number of customer funds claimed by socialized losses.
- Leveraged tokens. Traders can enter leveraged positions without trading on margin. They simply need to purchase leveraged tokens when they want to short their tokens with a certain quantity of leverage. ETH, EOS, USDT, and many other tokens can be leveraged on FTX. The leveraged tokens, as well as FTT tokens, are audited by the Blockchain Consilium.
Besides, despite the fact that the main function of FTX is allowing users to trade derivatives, it also allows them to transact fiat currencies. However, in order to do so, they have to undergo a 3-level KYC verification. FYI, KYC stands for "Know Your Customer," and it’s a financial institution regulation that requires institutions to investigate clients' backgrounds before letting them use their services.
The Developers of FTX
Sam Bankman-Fried and Gary Wang are the founders of FTX.
Sam Bankman-Fried is an American entrepreneur and a billionaire. He has a Bachelor’s degree in physics. Apart from being a CEO at FTX, Bankman-Fried is also the CEO of Almeda Research. In 2021, investors valued FTX at $18 billion, making him one of the wealthiest people under 30 in history.
Gary Wang is a Chinese entrepreneur. He has a Bachelor's degree in computer science and mathematics. Similar to Bankman-Friend, he is a CTO of FTX as well as a CTO of Almeda Research.
Overall, FTX is built "by traders, for traders." The main intent of Sam Bankman-Fried and Gary Wang was to build their own derivatives trading platform that solves the problems of other similar derivatives exchanges.
The Purpose of FTT Tokens
FTT is the utility token of the FTX ecosystem. Essentially, it drives the whole FTX crypto project. FTT coins are mainly used to pay fees on the FTX exchange. However, FTT holders can get discounts on these fees. The size of a discount depends on the amount of FTX tokens a trader holds.
For instance, a 3% discount belongs to traders holding FTT tokens that are worth at least $100. 5% discount belongs to traders holding FTT tokens that are worth at least $1,000. After a holder reaches the amount of FTT tokens worth $5,000, he/she gets a 10% discount, as well as starts getting discounts for the OTC trading.
Though it doesn’t stop here. The discounts keep growing as the worth of FTT holdings keeps increasing. The ultimate discount is 60%, which is provided for holders that hold FTT tokens worth at least $5 million. In addition to that, these holders become 6th-level VIP members, which brings them additional privileges.
Besides, FTX tokens can be staked. By staking the tokens, holders get a huge variety of benefits. This includes increased referral rewards, lower maker fees and maker rebates, bonus votes in staking pools, increased airdrop rewards, free daily ERC-20/ETH withdrawals, and IEO tickets.
Lastly, just like the stablecoins offered by the platform, FTT coins can also be used as collateral on the margin account. In fact, accounts on the FTX exchange use FTT tokens as collateral by default (you can change that on the settings page if you want to use stablecoins instead).
Besides, don't forget that you can see the live FTX token price on the aforementioned FTT price chart above.
Tokenomics of FTT
Since FTT tokens are deflationary, they have a max supply of 345 million FTX tokens. To keep FTX tokens deflationary, the platform performs weekly buybacks. Essentially, FTX buys a portion of its own tokens each week and burns them. The amount of burned tokens is usually equal to 33% of FTX market fees, 10% of net additions to the Socialized Gains fund, and 5% of additional FTX fees.
Though, if you plan to buy FTT tokens, you should really keep in mind the fact that the FTX token price tends to fluctuate. Why? In essence, it happens because the fluctuations of the whole crypto market also affect the FTT price, alongside the prices of many other crypto assets.
Lastly, note that users in the US and some other jurisdictions cannot purchase FTT tokens.