In the past few years, we've seen cryptocurrency exchanges evolve from basic peer-to-peer trading all the way to offering unique investment products and opportunities such as futures contracts or synthetics.
Leading the pack in this regard for innovation and diversity is FTX, which in just two years went from a few million in trading volumes to having recorded over $400-billion worth of cryptos changing hands in April 2021. Seeing this, how would our FTX Token review play out?
Surely, a 25-fold surge in volumes must be a good sign for FTX's own in-house utility token, no? And what about FTX itself, which is already among the largest and most popular of the big exchanges, continually leading the pack as far as offering users the most varied set of products to bet their money on.
If you're an enthusiastic trader, there are few things you can't do on the FTX exchange. So, read along our FTX Token review to see if its native cryptos are something you should consider.
What Is the FTX Exchange?
FTX Exchange is a centralized cryptocurrency exchange that offers a variety of different markets to trade from, such as spots, futures, derivatives, predictions, and more. It was created in 2019 by Alameda Research, which manages $100-million in cryptocurrencies and other digital assets, as well as having invested in a large portfolio of companies and platforms that are blockchain and crypto-focused. Currently, FTX is being run as a subsidiary of Blockfolio.
What Can You Do on the FTX Exchange?
As we highlighted earlier in our FTX Token review, the FTX exchange is among the most diverse cryptocurrency marketplaces when it comes to the services, markets, and investment products that it actively offers for its users. It gained public attention very recently, as Bloomberg News reported on FTX having capitalized on the rising lumber prices by creating a cryptocurrency-backed and tokenized futures contract for lumber within just two hours.
Naturally, it has a basic spot trading section where you can buy, sell, and trade cryptocurrencies, as well as a select number of fiat currencies. But aside from that, here are some of the other markets that we can put money on for our FTX Token review.
As with many exchanges nowadays, you can trade on the rise and fall of prices for a certain crypto-asset, but with its contract expiry set at a future date. So, for example, if you bet that the price of a June contract for a particular asset is going to rise by or before the end of June, you're on the winning side of the trade. Among FTX's most popular cryptocurrency futures contracts are for large-cap tokens such as Bitcoin or Ethereum.
FTX is among the pioneers of tokenized stocks. As we understand them, these represent shares in a company, such as Tesla, Amazon, Uber, Airbnb, Netflix, Google, Apple, Facebook, GameStop, AMC, and so on. But following a partnership with CM-Equity, FTX's tokenized stocks are able to have those underlying stocks and their real-time performance be exposed and traded with cryptos instead of fiat currencies. Unlike regular stocks, these tokenized variants can be subdivided into smaller units.
3. Leveraged Tokens
Leveraged tokens are specially designed cryptocurrencies that track the performance of an underlying asset with increased leverage. However, unlike a regular leverage or margin trade, the use of leveraged tokens offsets the risk of liquidation if the market goes the other way. FTX offers a number of leveraged tokens such as the BNBBULL, which seek returns to 3x the daily returns of Binance's BNB, as well as other popular crypts with up to 3x leverage for both long and short.
4. Volatility Index Trading
FTX has made a specialist volatility index built to measure and track the price volatility of an underlying cryptocurrency or asset. This traces its performance through several time frames – by the day, week, month, quarter, and so on. It gives an option for riskier traders to play around and bet on gaining from intense market volatility.
5. Prediction Markets
A fairly new phenomenon that's making its way to more cryptocurrency exchanges – including FTX – is prediction markets, where traders can make bets on future events such as whether someone is going to win an election or if the Olympics will be held this year. You can then earn rewards for predicting correctly.
What Is the FTX Token?
Now coming back to the main topic in hand for our FTX Token review, many cryptocurrency exchanges have their own cryptocurrencies. These native utility tokens can have any number of unique functions based on their design, whether it may be regular crypto as an additional trading pair and appreciative asset or as a non-volatile store of value in the form of stablecoins. Binance, for example, has two native tokens – the Binance Coin (BNB) and the US-Dollar pegged BUSD.
For FTX, its native cryptocurrency is the FTX Tokens or FTT. As with most other exchanges, the goal of building your own token is merely to attract more users to your platform by offering extra perks and access to special services or if the token itself shows the value of becoming a profitable investment. That's why FTX made the FTX Token as a way to incentivize as many people as possible to join and ramp up trading activity. As we'll see for our FTX Token review, there are a few other benefits…
1. Earn Discounts on Your Trading Fees
As we noted in our FTX Token review, the goal of making your own token is to incentivize your users to keep them using your exchange for as much as possible. One way to do this is, of course, to offer them a discount on their trading fees, as that is the way exchanges make money. In order to encourage users to trade bigger volumes more frequently, FTX is offering discounts on trading fees across its entire exchange (not counting OTC services) if you hold some FTX Token in your account.
How big of a discount you get will depend on how much FTT you've kept in your account. For example, holding at least $100 worth of FTT tokens on your account could net you a 3% discount on your trading fees. Meanwhile, holding more than $5,000,000 in FTT tokens could get you a 60% discount. As such, FTX's FTT tokens should be highly sought after by high-volume traders. Plus, holding FTT in your account even qualifies you to receive airdrops.
2. Get Additional Returns by Staking
Rather than just holding it in your account, you could optionally stake your FTT tokens using the FTX exchange, and you could earn a lot more with this. For our FTX Token review, here's a rundown of the upsides of staking FTT.
Increased Referral Rates
You (the referrer) can refer people (the referee) to join the FTX exchange using a special referral link. Once the referee signs up for an account and starts trading, you could earn a portion of their fees as a reward. If the referrer stakes their FTT tokens, they could increase this portion quite significantly. For instance, staking 25 FTT tokens could up the referral rates you earn to 28%, from the base of 25%. It can keep going up to 40% if you stake 1,000,000 FTT.
Get Rebates on Maker Fees
If you are trading, there's two types of fees that can be incurred – maker and taker fees. As for the former, if you initiate a trade that isn't matched immediately based on what's already on the order books, you are essentially adding liquidity to the exchange. In short, you are, in a way, a market maker. With FTX, you can get a further discount on maker fees – on top of the trading fee discounts, you already get just by holding FTT – between 0.0005% to 0.0030%.
Acquire Bonus Votes
The FTX exchange regularly holds polls and votes for its members. Here, they can vote on which new cryptocurrencies they'd like to see make their way onto FTX for instance. Another example is how FTX is currently running a charity run for a few donations, and users can vote on which charities get FTX's money, which is raised from a portion of the trading fees. By staking FTT tokens, you are entitled to bonus votes on top of your existing count, from 1 to 50 extra votes.
More Airdrop Rewards
Airdrops are regularly carried out on FTX, and they are currently – as of this FTX Token review – running an airdrop campaign to disburse Serum's SRM tokens to FTX users. As we learned earlier, holders of FTT tokens will naturally get these airdrop rewards. However, you can increase the amount of said airdropped tokens by staking FTT. This percentage increase of extra airdrop rewards can be as little as a 2% increase, or up to 14%.
Free Daily Blockchain Network Fees
Many blockchains have some form of transaction fees that users will need to pay for moving assets. For example, moving ETH across the Ethereum blockchain requires you to pay gas fees. On FTX, these fees are charged whenever you have to make a withdrawal. Thankfully, you can waive these if you stake FTT tokens, where FTX can subsidize all Ethereum-based ERC20 and ETH withdrawals each day. It can be anywhere from just one free daily withdrawal or all the way up to 1,000.
Gain Extra IEO Tickets
FTX hosts IEOs, or ‘initial exchange offerings.' These are the cryptocurrency equivalent to a stock going public on a stock exchange. As new platforms host their tokens for the first time on crypto marketplaces, these exchanges can restrict the initial sale of tokens to a select few users. FTX has the same rule, but FTT stakers can get additional tickets to join IEOs. At the very top-end of the staking pool, you can earn 6 more tickets to join future IEOs.
What Are the Tokenomics Like on FTX?
FTX has programmed in a fixed supply cap for FTT tokens. As of this FTX Token review, 127,761,577 FTT are in circulation out of 338,687,959 FTT. They're also practicing deflationary tokenomics thanks to FTX's implementation of a buyback campaign and subsequently burning those bought FTT to gradually reduce the supply. This roughly-weekly buyback is funded by fees collected by the platform. Thus far, they FTX has burned 11,312,041 FTT, worth US$636,992,326 altogether.
Next up, they'll be planning another burn of 79,144 FTT, worth around US$4,451,836. Owing to this burning mechanism and following FTX's rapid growth overall, FTT tokens have gained significantly in value since late 2020. At the time of writing this FTX Token review, FTT is priced at $56.39. This marks a monstrous gain of more than 6,600% from its all-time lows in September 2019. With a market capitalisation of $5,319,776,072, FTT is the 36th-most valuable cryptocurrency.
FTX Token Review – Conclusion
There's certainly no end to our FTX Token review, as the exchange itself is going through a period of exponential growth in userbase and trading activity. But they're not stopping here, with plans to list more assets across the many different markets that FTX dabbles in, as well as offer new services such as the Quant Zone, where users can build their own automated trading algorithms. Seeing how much FTT's growth is tied to FTX as a whole, it's hard not to expect this young token to reach the moon in just a few month's time.
FTX Token Review
- Ease of Use
- Project Values
- Tokenomics Model
- Long Term Sustainability
- FTX Exchange as a whole offers a lot of different markets (futures, leveraged tokens, stocks, etc.) for traders to bet on.
- You can earn very big discounts on your FTX trading fees by holding FTT.
- You can get a lot of extra perks by staking FTT (increased referral rates, airdrop rewards, IEO tickets, etc.).
- Ability to waive your blockchain network or gas fees for outbound (out of FTX) transactions such as withdrawals.
- Deflationary tokenomics will keep reducing the supply to increase FTT's scarcity.
- Regulatory concerns, as FTX is incorporated in Antigua and Barbuda, with its HQ in Hong Kong.