FTX is a cryptocurrency derivatives exchange supported by Alameda Research, a quantitative trading company and crypto liquidity provider.
The exchange launched in April 2019 and featured the usual spot trading, reverse swaps, and futures contracts found on other major platforms.. In early 2020, the exchange launched its daily and weekly bitcoin options binary markets.
FTT is the exchange’s native token and is issued on the Ethereum blockchain. FTT stakers receive a discount on the trading commission based on a tiered system. Additional perks include additional votes in their polls and higher airdrop rewards.
The first airdrop occurred in August 2020 when 500 million serum (SRM) tokens were distributed to FTT holders. To stand out from the competition, user guarantees are shared in a universal stablecoin wallet.
It means that Traders can drastically reduce their margin requirements. Numerous leveraged tokens that mimick the leveraged stocks of ETFs were also listed, including 3x Long Bitcoin and 3x Short Litecoin.
Leveraged tokens are derived from the exchange’s open-ended exchange contracts and function as tradable ERC-20 tokens that can be withdrawn and traded.and. These innovative products have made FTX a popular exchange among investors, which is reflected in its growing open interest in futures contracts.
As shown above, the number has grown 340% over the past six months, and has passed the $ 2 billion mark far outperform other established exchanges.
In November 2020, the exchange ventured into trading token shares, although this is not available to your US citizens. Your partner CM-Equity protects the tokens that are redeemable for the underlying stocks. Interestingly, your users are allowed to buy less than one stock, which is especially useful for high-priced stocks like Amazon ($ AMZN) and Google ($ toget).
In December, FTX continued its innovations with the introduction of pre-IPO futures contracts for AirBNB and Coinbase.. These contracts allow traders to speculate on the price at which these companies will go public. The exchange also offers trading in thematic productsincluding a basket of listed cannabis stocks.
By creating multiple markets with sufficient liquidity thanks to its market-making structure, the exchange has been able to attract the attention of a new customer base. He recently launched a Wall Street Bets index that includes GameStop ($ GME), Dogecoin (DOGE), and iShares Silver Trust ($ SLV)..
Thanks to these popular offers, the price of FTX Tokens (FTT) has doubled since early 2021.
To further promote token holding, FTX buys back and burns 33% of all commissions generated by the exchange and 10% of its net cash inflows from insurance funds. This process will continue until half of the original 350 million supply is destroyed.
While this may seem like a deflationary agenda, The team is allocated 31.25 million tokens, which is at least 17.8% of the expected circulating supply of 175 million. Taking into account the current price of the tokens of USD 11.70, their market capitalization will in any case exceed USD 2 billion once the burning process is complete.
This number corresponds to a discount of 45% on Binance Coin’s (BNB) market capitalization projected for 2031according to Messari. This is also more or less in line with the entire open interest of the exchanges – $ 4.26 billion – for a difference of about $ 2 billion.
Strangely enough Binance has an undisclosed investment in FTX, which may create less incentive for direct competition.
Right now, the market seems to value both tokens equally. Binance appears to be expanding its ecosystem through its decentralized exchange, Binance Smart Chain, its blockchain project incubator, and a successful token launch pad.
For its part, FTX is focused on leading the innovation in derivative products..
All of these projects are currently bringing value to token holders and with the burnout program and the growing popularity of the futures exchanges FTT may still have a higher valuation of its price.
The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risks. You should do your own research when making a decision.
Don’t stop reading: