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The FTX platform is known for its low trading fees, advanced order types and more. We explore the attributes which make its native token FTT a viable investment.

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Disclaimer: Withdrawals on FTX Crypto Exchange are currently halted. This is a live article and will be continuously updated to reflect new information.

. Often described as the “backbone” of the FTX exchange, FTT provides its holders with many benefits.

The terms “FTX” and “FTT” are sometimes used interchangeably. By having FTT tokens in your possession, you get to enjoy lower trading fees and access a slew of perks on the FTX exchange. You can also use your tokens as collateral to trade derivatives.

Previously, the crypto space took notice of FTX because its value soared within a short period of time. From less than $4 in December 2020, FTT surged to a high of $85 in September 2021, then falling to as low as $2 in November 2022. As of November 9, 2022, the FTT token is currently trading at around $6, and is highly volatile. Similarly, FTX’s 

 swelled from $400 million to $9 billion during the same period, but has since retraced to $312 million.

The rise of FTX isn’t a fluke. Analysts suggest that increased public exposure, strong partnerships and new protocol launches on the FTX exchange have made the FTT token successful, and expect the upward trend of FTT’s price to continue if the exchange keeps growing over time.

However, in November 2022, due to CoinDesk’s leak of an Alameda Research balance sheet, concerns about FTX’s solvency grew. On November 8, 

. FTX halted withdrawals and approached Binance for assistance to cover the liquidity crunch. However, it was revealed on November 10 that Binance has walked away from the deal to acquire 

Here’s an overview of FTX and its token, FTT.

FTX is a centralized cryptocurrency exchange headquartered in the Bahamas. It was founded by Alameda Research and Sam Bankman-Fried. At the start of 2022, the platform had more than a million registered users, recorded billions of dollars daily in trading volume and allowed users to trade innovative derivative products, with many of these expected to set precedents for the future of crypto trading. However, as noted above, FTX paused user fund withdrawals on November 8, 2022 due to a liquidity crisis, and the situation is still being updated.

Since CEO Sam Bankman-Fried launched the platform in 2019, FTX has 

. It features a variety of tradable instruments. Here are some examples:

FTX is also popular among investors because it tries to solve problems that other crypto exchanges haven’t addressed. For instance, it’s the first crypto exchange to simplify derivatives trading.

Before FTX, liquidity was a major problem for most cryptocurrency exchanges because it was difficult for traders to get in and out at their desired price. However, FTX ensures that traders can enjoy high 

, FTX is the fourth most liquid exchange in the world after Binance, Coinbase and Kraken.

FTX has also reduced the chances of clawback, which exchanges frequently report. A clawback occurs when money is taken from investors to pay for the bankruptcy of an investor. Since you can’t repossess assets from outside the system, the exchange needs to pool money from its investors. This rarely happens with FTX because it uses a sophisticated algorithm which liquidates positions gradually, without decreasing the net asset value below zero.

FTT is among the many innovative products found on the FTX exchange, and it may as well be the most important. Like other popular instruments, such as 

, FTT holds value, can be traded and is used to carry out financial transactions. 

Sometimes, experts also refer to FTT as “one of the 

.” ERC20 tokens are digital coins that don’t run on their own blockchain: rather, they’re issued on the 

. Short for “Ethereum Request for Comments, number 20,” the classification defines technical standards for tokens, which need to be stored in a 

. Luckily, ERC20 is so popular that you’re unlikely to have any difficulty using FTT.

To support the value of FTT, the FTX exchange regularly repurchases and 

. It does so by purchasing FTX tokens with 33% of the trading fees generated on its platform, including 10% of the backstop fund and 5% of miscellaneous fees.

One of the major benefits of using FTT is receiving a discount on trading fees. Not only do you pay a lower fee on 

, but you also get tighter spreads. For active traders on the FTX exchange, the difference can be as high as 60%. In addition, traders can use FTT as collateral for future positions.

Using FTT can also protect traders from clawback because it provides 

 protection. During volatile markets, insurance provides a net gain which offers traders a cushion to continue trading without triggering 

. The insurance comes in extremely handy when using 

, which can be created (using FTT) to take positions where profits and losses are multiplied.

, a process that allows holders of FTT exchange tokens to validate a transaction. Staking FTT comes with a lot of benefits. For example, traders can get additional rebates, and spin the non-fungible swag wheel to win a free 

. In addition, they’re entitled to free ERC20 withdrawals, which can be helpful during periods of ETH congestion. Other benefits include increased 

In terms of value accrual, one-third of FTX's trading revenue is used to purchase and burn FTT supply, so as trading revenue increases, it creates intrinsic value and increases the market cap of the FTT token.

Like any other major online crypto exchange, people can trade cryptocurrencies and other financial instruments on the FTX platform. It provides a user-friendly interface that’s robust enough for institutional traders, yet intuitive enough for beginners to navigate. Apart from accessing FTX via its website, you can also download the FTX App on devices such as mobile phones.

To meet the demands of international regulators, the FTX exchange offers two separate platforms: One for international users, and another for U.S. residents. Its primary platform is available to users outside the United States, while its newly established U.S.–based platform offers services to U.S. residents, with a limited selection of coins and features available. Recently, the company partnered with LedgerX LLC to improve its offerings in the U.S.

FTX’s main interface lets users select a variety of instruments to trade. It allows users to trade stocks, forex and traditional markets. When required, you can use 

Signing up for FTX is very convenient. You simply fill out a basic profile and verify your identity. After the verification has been completed, you can deposit fiat using methods such as ACH bank transfer, credit card, digital wallet or wire transfer. Once your money is deposited, FTX’s user-friendly interface allows you to swap one coin or fiat currency with another easily.

According to FTX’s official website, the platform is “built by traders, for traders.” The idea seems to have taken off, as FTX has quickly become one of the top crypto platforms in the world.

To entice new users, the exchange has made the registration process easy. Anyone can register for an account, using their personal email address. Members receive additional perks for completing Level 1 

 verification, after which the platform allows instant access to almost all available features.

The following are just a few popular trading attributes likely to draw derivatives traders in:

Besides the trading features, here’s an overview of other notable benefits:

: The trading fee starts at only 0.10%. Traders can reduce the price further by using FTX tokens.

Staking coins with FTX allows account holders to earn up to 8% interest. You can unstake crypto coins for a fee, or free of charge with a 14-day waiting period.

: The FTX exchange offers many types of advanced orders to protect your account. These include 

: When you trade with FTX, 1% of the fee is donated to charitable causes.

Since its inception in 2019, FTX has become a force to be reckoned with. According to Forbes, 

: FTX is primarily a crypto derivatives platform. It distinguishes itself from competitors by offering a wide range of derivatives and trading conditions, some of which aren’t found elsewhere.

Unlike other major crypto platforms, FTX doesn’t have a learning curve. With their easy-to-understand features, new traders will find themselves right at home.

With just an internet connection, anyone can easily register an account with FTX and begin trading within minutes.

Although FTX didn’t start with a lot of cryptos, as 

 did, they eventually ramped up spot listings and now support a wide range of cryptocurrencies.

: As of this moment, the FTX exchange is potentially insolvent after the bank run on November 8. Withdrawals are halted, and users are unable to withdraw their funds. 

: Despite low trading fees, unless a user has staked FTT, withdrawing anything under $10,000 will set you back up to an additional $75 in withdrawal fees during periods of congestion. This is an expensive undertaking, compared to other crypto trading platforms of similar size.

Due to local regulations, U.S. residents can’t trade on 

. To compensate for this loss, FTX offers a limited range of derivatives on its FTX US platform. The company is already working with LedgerX to bring more opportunities to U.S. traders.

 a document claiming to be the balance sheet of Alameda Research, a crypto trading hedge fund. It revealed assets of $14.6 billion, some of which were commingled with FTX, although the two entities are supposedly separate. Specifically, $5.8 billion of the $14.6 billion is reputedly in FTX's own token, FTT.

FTT was also sold to Alameda Research at a very low price, early on. When FTX artificially inflates the value of FTT, Alameda is able to use FTT as collateral on FTX to borrow other assets from FTX's customer deposits.

However, Alameda held most of the FTT circulating supply, and the FTT token has had a low circulating liquidity. Therefore, Alameda wouldn’t be able to sell all of its FTT, as there wouldn't be enough liquidity or buyers. This usually wouldn't be a problem, as Alameda has controlled most of the supply. However, Changpeng Zhao (“CZ”), the CEO of Binance, 

 that he was selling all of Binance's FTT holdings, worth over $500 million.

The CEO of Alameda offered to purchase all of Binance’s FTT at $22, which increased suspicions that the value of FTT was heavily used as collateral to borrow other assets — and that a further price drop may result in their loans being liquidated.

Panic set in when CZ declined the offer, causing FTT’s price to eventually break below the $22 level, which accelerated the bank run on FTX. This ultimately led to remaining users being unable to withdraw their assets from FTX, as they had been loaned to Alameda — which is now insolvent, since Alameda had also borrowed from other creditors.

FTX exchange now owes billions, and although it was reported on November 9 that Binance planned to acquire FTX, the latest news reported on November 10 revealed that CZ from Binance has ultimately decided to walk away from the potential buyout. FTX user funds are likely lost but details are still finalizing. 

: As of November 2022, the price range of FTT is between $2 and $6. It previously reached a historic high of $85 before receding by over 90% to the current price. The sudden crash from $22 to $6 was caused by the news of FTX’s insolvency and its inability to return customer funds.

 has dropped from a high of $9 billion to $312 million.

: The daily trading volume of the FTX token is $3.4 billion. This has spiked due to the unanticipated news, and has caused FTT to become extremely volatile. 

The total supply of FTT coins is pegged at around 329 million. At the time of this writing, there are 133 million FTT tokens in circulation.

 Bybit no longer offers any contracts or Earn products on FTT tokens. 

Considering the recent bank run on the FTX exchange and the amount of debt it owes, investing in FTT is highly speculative and, therefore risky. 

Due to the current volatility, experts predict that FTT will likely reach new lows in the future. For instance, the analyst and algorithm at

 will likely drop below the $3 mark within a couple of years. If the issues around FTX aren’t resolved quickly, FTT will continue to face downward momentum over the long run. 

Short-term predictions for FTT are also not positive, as most experts predict that FTT will offer a low ROI in the coming year due to the reputational damage from the bank run.

Despite FTX's innovative lineup and “first-mover” advantage as a groundbreaking leverage trading platform, they eventually became insolvent due to leverage before they had the chance to grow to be the biggest exchange. If cryptocurrency exchanges want to continue to grow and serve the crypto community, on top of reinventing their offerings in line with local/global 

 and being innovative, they must become more transparent and, according to CZ, should produce 

 proof-of-reserves to re-instil trust in users.

What’s more, cryptocurrency traders and investors need not to blindly trust centralized exchanges. It will take time for many crypto users to adopt a “trust but verify” approach when dealing with centralized entities. Ironically, the fall of FTX due to centralization and opaque activities again underscores the need for true 

 (DeFi) which offers permissionless, transparent and self-custodial solutions for crypto.

FTX Token (FTT): What It Is & Why You Should Care

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