The goal of the FTX trading platform is to be an exchange that can fix the flaws in existing cryptocurrency exchanges and provide its consumers with a user-friendly, lucrative platform. FTT, the platform’s official currency, may be used to purchase discounts and staking privileges from FTX. The leveraged token and exchange costs charged by the FTX trading platform are modest. For novel products like the spot exchange, leverage trading, and options, it does provide exclusions. Except for withdrawals of eth, ERC-20 tokens, or BTC (only withdrawals of less than 0.01 BTC are subject to a fee), it does not impose any deposit or withdrawal fees.
FTT token staking procedure
Users may stake their FTT tokens on FTX’s platform to earn prizes depending on a range of criteria, including referral rate, maker fee refund, and bonus votes, among others. Staked FTT referrers get a greater cut of what their referrals make. Daily free erc20 and eth withdrawals are available to stakeholders. Stakeholders in FTTs get maker fee credits in addition to FTT fee discounts. Tickets, which will be distributed to FTX stakeholders based on their FTT token pledges, are required for the platform’s initial exchange offers (IEO) for various NFTs and token projects. Depending on their trading activity and the quantity of FTT tokens they possess, FTT stakeholders may be able to get additional votes on the FTX platform. Only when 14 days are up may FTT tokens be unstacked. Users will not get rewards during the time they wait for their tokens to be unstacked. The good news is that users may pay a fee and instantly have their tokens unstaked.
Characteristics of the FTX token (FTT)
The trading platform mechanics of FTX, according to the company’s official website, are difficult for anyone to duplicate, making it a unique asset in the blockchain industry.
Enhanced tokens
Leveraged tokens are made available to users of the FTX trading platform, allowing them to take short or leveraged bets without using margin. For instance, a trader may simply buy a 6x short Ethereum leveraged token on FTX if they want to buy a 6x short Ethereum. Any spot exchange may sell leveraged tokens built on the ERC-20 standard, and users of the FTX platform may purchase leveraged tokens such as BTC, ETH, EOS, USDT, and others.
Centralized collateral pool and universal stablecoin
It is more difficult for traders to adjust their positions and avoid liquidating holdings on many futures markets because collateral is spread over several different tokens and margin wallets. As a result, a centralized pool of collateral and global stablecoin settlement is required. To get around these issues, FTX derivatives use a stablecoin settlement system and only need a single global margin wallet.
Clawback avoidance
Accounts that go through bankruptcy are subject to socialized losses, clawbacks, and automatic deleveraging. Someone must cover the losses if a user has a collateralized futures position and market movements move against their account to the extent where their net asset value is negative. Since no bitcoin exchange can collect assets from a bankrupt account owner, the account owner is stranded with other customers who aren’t being liquidated and will pay the bills. The FTX trading platform uses a three-tiered liquidation technique that lowers the likelihood of clawback to reduce the socialized losses that take place in many derivatives exchanges. The backup liquidity provider plan will be enough to prevent any clawbacks, according to the official website of the FTX platform. On-exchange and backup liquidity providers were able to give to all almost bankrupt accounts before they collapsed, and market swings of 40% in 20 minutes did not result in clawbacks.
USDT futures
Given USDT’s historical volatility, many significant crypto firms want the ability to hedge USDT deltas, which USDT futures will provide them.
FTX token use cases
The FTT can be used for the following:
Trading fees
In comparison to other cryptocurrency exchanges, FTX futures trading costs are lower and OTC spreads are closer.
Black label services
Large investors and crypto institutions are interested in a white-label version of the FTX OTC site and futures market, where the purchase will be made using the FTT token.
As collateral
Long-term demand for FTT may be increased by using it as futures trading collateral.
Token value
The FTX platform’s potential for growth and improvement directly relates to the value of the FTT token. As the value of FTT rises, holders might anticipate an increase in their holdings.
Leveraged token listing creation
Future projects may pay a fee and use their currency to create leveraged tokens.
Burn/revenue share for tokens
A transaction fee will be charged for the FTT that is purchased from FTX; one-third of this money will be used to buy FTT tokens, which will then be burned.
Gains for FTT holders
FTT holders will benefit from the FTX backup liquidity fund when the crypto market experiences significant market swings.
