What is FTX token (FTT)?

Luis Clark
Luis Clark
Luis is a personal finance expert who has been passionate and writing about crypto for more than five years.
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      What is FTX Token (FTT)?

      FTX Token (FTT) is the utility token of the FTX exchange. The token is used to cut down trading fees on the FTX platform and also serves as collateral against futures positions. Users can also stake the token to receive interest or win NFTs

      The FTX Token’s native platform, FTX is a cryptocurrency derivatives exchange developed to offer leveraged tokens, OTC trading, and futures. 

      what is ftt token crypto

      Who is the Founder?

      The FTX Token was founded by Sam Bankman-Fried and Gary Wang in 2019. Sam Bankman-Fried, a crypto billionaire superstar, also co-founded quantitative trading company Alameda Research in 2017 alongside Gary Wang. 

      How does FTX Token (FTT) Work?

      The FTX Token is one of the several innovative products of the FTX exchange. It is also considered to be the most valuable offering of the platform. Like a lot of other popular cryptocurrencies such as Ethereum or Cardano, the FTX Token is tradable, holds value, and can be used for other financial instruments.

      To maintain and support FTT’s value, the FTX exchange regularly repurchases its tokens to burn them. The FTX exchange buys FTX tokens using 33% of the trading fees that it generates from the platform. This is inclusive of 5% of miscellaneous fees and 10% of the backstop fund. 

      That said, FTT tokens also enable holders to get discounts on the exchange’s trading fees. So customers of the platform don’t just pay fewer fees for crypto futures exchange but they also get access to tighter spreads for holding the token. Traders can use the FTX Token as collateral for future positions. 

      FTT Tokens also come with insurance protection which protects traders from clawbacks. This is necessary for volatile markets as insurance providers net gains that give traders a cushion to keep trading without initiating margin calls. 

      FTT also works to create leverage tokens that enable traders to open positions where losses or profits are multiplied based on the leverage. The token also allows staking which enables FTT holders to exchange tokens as a reward for validating transactions.

      Key Features

      Leveraged Tokens

      leverage ftx token
      The FTX trading platform offers traders ERC-20-based leverage tokens. These tokens give traders up to 3 times leveraged exposure against their underlying trading pair without managing a leveraged position. Leveraged tokens have no margin requirements.  Leveraged tokens hold perpetual futures on FTX trading platform. This means that the tokens get their exposure to the underlying assets through the perpetual futures. This makes them subject to the price movements, funding rates, and premiums of the perpetual futures.  Each leveraged token owns its position in FTX futures contracts. The price of the leveraged token is in line with the price of the underlying position it holds.  Leveraged tokens can be sold on the FTX spot markets. They can also be sold from the user’s wallet on the exchange. All you need to do is to click “Convert” in the wallet.  Since leveraged tokens are ERC-20 tokens, they can be deposited and withdrawn from the FTX wallet to any ETH wallet.

      MOVE Contracts

      MOVE contracts represent the absolute value of the amount a product moves within a specified time frame. 

      Traders can use MOVE contracts to bet on how far the price of a cryptocurrency will move over some time regardless of the direction. As far as the price of the underlying cryptocurrency moves over a specific amount, the contract generates a profit. MOVE contracts play on volatility. 

      Even though MOVE contracts are similar to futures, they vary because unlike futures, MOVE contracts expire at the amount its price moved instead of expiring at the price of the token. 

      FTX users can use collateral to get leveraged short or long MOVE contracts. 

      For instance, if a daily BTC moves $100 from the beginning of the day to the end, the BTC-MOVE will expire at $100 irrespective of whether the BTC went up or down. A long MOVE contract means that if BTC moves a lot the next day, the user will win. On the other hand, a short MOVE contract means that there will only be a win if BTC is relatively stable the next day. 

      There are 3 types of MOVE Contracts on FTX:

      • Daily MOVE Contracts
        These trading contracts expire over a single-day period. The ticker for weekly MOVE contracts is [underlying]-MOVE-[expiration date].
      • Weekly MOVE contracts
        Weekly MOVE contracts expire over 7 days from when they were initiated. The ticker is [underlying]-MOVE-WK-[expiration date].

      Quarterly MOVE contracts
      MOVE contracts in this category expire roughly over 3 months. The ticker for contracts in this category is [underlying]-MOVE-[expiration year]Q[quarter number].

      Options

      An Option is a contract that gives the holder the right to buy or sell something at a predetermined date and price without being under any obligation to do so. 

      There are 2 types of Options: Calls and Puts. Calls refer to the right to buy while Put means the right to sell. 

      With Options, traders can speculate on a future price direction via a crypto exchange and hedge against their open position. Option trading is similar to crypto derivatives trading but the only difference between it and crypto derivatives trading is that the users are under no obligation to purchase the underlying asset upon the expiration of the contract.

      Prediction Markets

      market prediction ftt token

      Prediction markets are open markets where individuals can trade contracts that pay based on the outcome of unknown future events. Specific outcomes are predicted using financial incentives in these markets. 

      FTX has a prediction marketplace where users can trade on the outcome of events. These prediction markets are similar to bets. 

      One of the latest prediction markets on FTX is TRUMP-2024. This is a futures contract that expires at $1 if Donald Trump wins the upcoming US presidential elections in 2024. If he loses the election, the contract will expire at $0.

      NFT Marketplace

      FTX has an NFT Marketplace where users can trade non-fungible tokens. There are a variety of NFT collections available in the NFT marketplace, including sports highlights, digital art, etc.

      Users can also mint their NFT in the NFT Marketplace. NFT Marketplace is only available to FTX users in the United States.

      Weaknesses of FTX Token (FTT)

      A major weakness of FTX and the FTX Token is that the FTX Token (FTT) is not available to users in the United States and other prohibited jurisdictions. Users in these regions have access to FTX but are deprived of the full benefits of the network by being restricted from accessing the token. Hence missing out on all the benefits of holding the token. 

      Also, retail derivatives trading is not allowed for FTX users in the UK.

      Another problem with FTX is that the interface is quite complex and overwhelming for beginners. Users who do not have advanced knowledge of how crypto exchanges and crypto trading work will have a hard time using the platform.

      How is FTX Token (FTT) Created?

      The FTX Token is the utility token of the FTX platform. This means that all tokens had already been pre-mined by their launch date. The token has a total supply of 345 million. 

      Mining FTX Token (FTT)

      You cannot mine FTT tokens as the FTX Token uses the Proof of Stake consensus. Staking is simply locking your coins in a wallet to earn interest or other rewards. 

      Which Blockchain does FTX (FTT) Use?

      FTT is an ERC20 token that uses the Ethereum blockchain

      How to Use FTX Token (FTT)?

      FTX Token also known as FTT is the utility token of the FTX ecosystem. 

      FTX traders can use FTT to get a discount on fees. Traders who hold FTT pay lower fees on FTX futures trading fees and also get tighter OTC spreads. Traders can also use FTT as collateral for a futures position. 

      FTT comes with insurance protection. This protects traders who use the token from clawback as the insurance provides a net gain that acts as a cushion for the traders when the market is volatile. This enables the trader to keep trading without triggering margin calls. 

      The FTT token can also be used to create leveraged tokens. For a fee, upcoming projects are allowed to create a leveraged token using FTT. The insurance attached to the token allows traders who use leveraged tokens to take positions where losses and profits are multiplied according to the leverage. 

      FTX holders can stake FTT on the platform and earn staking rewards and other benefits. Some of the benefits associated with staking FTT include:

      • Bonus votes on polls concerning the launch of new financial products and services 
      • Higher referral rebate rates
      • New maker fee schedule with discounts for FTT holders
      • Increased Serum Airdrop rewards
      • A chance to win a free NFT by spinning the non-fungible swag wheel

      FTT holders also have the opportunity to get extra gain and profit from the FTX backup liquidity fund when big fluctuations happen in the crypto space. 

      How to Buy FTX Token (FTT)?

      how to buy ftx token ftt

      You can buy FTT on the FTX platform exchange or on other crypto exchanges like Binance, and Coinbase. CoinMarketCap provides a list of all the crypto exchanges that support the trading of FTX. As already stated, FTX is not available to users in the US. If you are in the US or any other prohibited region, you will not be able to buy FTT. 

      Once you have chosen the right trading platform that suits your needs, you will need to create an account on the exchange and fund your wallet with fiat currency. Most exchanges support the funding of wallets with both credit and debit cards. 

      After funding your wallet, you can then purchase FTT at the current trading price. Asides from buying directly from the trading platform, other platforms like Binance have other options where you can buy FTT directly from other users.

      How to Store FTX Token (FTT)?

      FTT token can be stored in a wallet on the trading platform where you bought the token or it can be stored in a wallet on another exchange. Exchanges like Kucoin, Binance, and Huobi Global have inbuilt wallets that support FTT

      FTT can also be stored in a software wallet. Software wallets like MyEtherWallet, Atomic Wallet, Trust Wallet, etc support the storage of FTT. 

      Hardware wallets like the Ledger Hardware wallet and Trezor hardware wallets also support the storage of FTT.

      Best Place to Stake FTX Token (FTT)?

      As with any other cryptocurrency, the best place to stake a token is on its native platform and since the FTX exchange supports the staking of FTT tokens, that’s the recommended option. So you can stake your FTT tokens on the official FTT page or the platform’s staking page That said, staking your tokens on the FTX trading platform offers a ton of benefits as listed below:
      • Maker Fee: Override Users that stake the FTT token unlock lower maker fees, as well as, maker rebates, and this overrides the platform’s standard fee schedule. For users in the various market maker tiers, the reward rebates are included in the various market maker level-based rebates. For example, a market maker 1 user with 1,000 FTX tokens staked will get a net maker fee of -0.0035% This is the -0.001% plus -0.0025% from MM1. 
      • IEO Tickets: Staking FTT gives you tickets for all IEOs held in FTX. 
      • Increased Airdrop Rewards: FTT Token stakers get more SRM airdrops.
      • Bonus Votes: Staking the FTX Token on the exchange allows stakers to get bonus votes in the FTX exchange polls. This is plus the regular number of votes that is dependent on trading volume and FTT held. 
      • Increased Referral Rebate Rates: FTX exchange referrers that stake the platform’s native token get paid a larger fraction of their referees’ fees. 
      Now, it’s important to state that to own and stake FTT on the FTX exchange users must have completed KYC 1, plus the following rules:
      • Only users who have completed KYC 2 are eligible for SRM rewards. 
      • If you unstake the FTX Token, your tokens will be locked up for 14 days before release. 
      • You cannot use staked FTT Tokens as collateral.
      • To be eligible for SRM airdrops you must hold a minimum of 500 FTT in your FTX exchange account either unstaked or staked. 
      • If you qualify for fee discounts from staking FTT or hold the same, you will get the better option of the two. 
      Discounts for maker fees cannot be less than -0.01%.

      What You Need to Know About the Future of FTX Token (FTT)

      The FTT is the utility token of the FTX exchange, which means that its future performance is largely dependent on the widespread adoption of the FTX exchange. The FTX Token also aims to maintain its price value as it is a deflationary token meaning it continuously buys back tokens to be burnt. 

      The above factors all tie the FTX Token’s future value to the FTX exchange. So if the platform is widely accepted and its burning mechanism is maintained then users can expect the value of the coin to rise. If not, the FTT Token will lose value rapidly.

      The FTT Token also isn’t allowed to be traded or held in the United States for various regulatory reasons. This means the entire US crypto market is closed to the token, which can accept the token’s acceptability in the crypto space in other parts of the world.

      ftt crypto market future

      Conclusion: Should You Put Your Money in FTX Token (FTT)?

      If you intend to use the FTX exchange or derivatives then the FTX token is an excellent investment as it offers tons of on-site benefits for holders and stakers. It is also a great investment opportunity if you trust the FTX management and its overall objectives.

      Risk in Investing in FTX Token (FTT)

      The FTT Token currently offers a moderate risk opportunity. However, like any other cryptocurrency, the FTX token is extremely volatile and can result in investors losing their entire investment. So before putting your money into FTX ensure that you do proper research on the FTX exchange objectives and goals and only invest money you’re willing to lose. 

      FAQ

      Most frequent questions and answers

      United States residents cannot trade on the FTX global platform or hold FTT due to the tight crypto regulations in the country. The FTX exchange is also sanctioned by the United States. But the FTX global exchange has a partner in the USA called FTX.US. This allows American citizens to trade on the platform. However, FTX.US has very limited offers in comparison to its global partner. 

      FTX is a great choice for a cryptocurrency exchange for newcomers and advanced traders who are looking to trade leverage tokens, volatility products, and futures. It also supports margin trading, as well as, crypto derivatives trading. The exchange also offers a ton of ways to get low trading fees and discounts using its native utility token, FTT. FTX also utilizes a tiered fee structure that’s dependent on the trading volume, offering rates lower than what most cryptocurrency exchanges would charge.

      The FTX exchange is a legitimate cryptocurrency platform, however, it isn’t legal to trade the FTT token or use the FTX exchange in the United States due to regulatory reasons. 

      Yes, the FTX Token is a deflationary coin that reduces its supply with time by buying back and burning tokens. This will increase demand over time and ultimately hike its value in the crypto market. 

      Skrumble.com provides all its content for informational purposes only, and this should not be taken as financial advice to buy, trade or sell cryptocurrency or use any specific exchange. Please do not use this website as investment advice, financial advice or legal advice, and each individual’s needs may vary from that of the author. This post includes affiliate links with our partners who may compensate us. 

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