Tag: FTX

FTX an exchange launched in 2019 which became popular among traders for its diverse range of trading products and markets has today launched a Uniswap index

Uniswap is a decentralized protocol based on Ethereum for providing liquidity to the Ethereum Network. It became popular in the past few months due to the yield farming craze.

The Uniswap index price will be the sum of the asset prices of the pools listed on FTX’s support page multipled by FTX’s ETH index.

With the launch of the index came the 4 products based around it. A Uniswap perpetual contract, a Uniswap futures contract, and 2 Uniswap leveraged tokens.

Today as revealed by The Block former head of Robinhood Crypto, Sina Nader has joined FTX.US as COO. Nader had also previously worked with Morgan Stanley, Credit Suisse, and crypto investment firm CryptoLux Capital.

Founder and CEO of FTX Sam-Bankman Fried told The Block “We’re really excited for Sina to join — he brings a ton of experience, energy, and vision for the exchange, and in general for the U.S. crypto market.”

Also revealed by Bankman-Fried that this new hiring coincides with future expansion plans for the FTX.US exchange.

FTX was first founded in 2019 and gained significantly popularity among traders for its innovative range of trading products. These include leverage tokens, options, perpetual swaps, and futures contracts. Currently FTX trades well over $300 million a day.

FTX.US was FTX’s foray into the US market. Currently offering 8 trading pairs it is a more bare-bones trading experience to that of FTX. This being due to financial regulations in the US.

Since its launch in May this year FTX.us has remained rather stagnant but with the reveal today that may be about to change.

Nader said via LinkedIn that he is “”super excited about all we will do.”

Launching in 2019 FTX has become a popular avenue for cryptocurrency derivatives trading. Currently ranked 8 on CoinMarketCap by volume doing over $280 million in 24 hour volume.

Today FTX in a partnership with 3 DeFi adjacent projects RUNE, KNC, and TOMO they announced a 15000$ trading competition. The competition will last for 7 days from the 22nd of July through to the 29th. Traders can enter the competition any time between the 22nd and the 29th.

It being a DeFi competition means traders are required to trade on DeFi markets. Currently the DeFi products listed on FTX are as follows: BAL, COMP, CUSDT, DEFI (Index), DMG, KNC, MKR, RUNE, and TOMO. All of these coins have spot markets, perpetuals, futures, and leveraged tokens which can be traded. The full list can be found here on the competition page.

The winner of the competition is the trader who trades the most DeFi products by volume at the closing date of the competition. The prizes are as follows:

• 1st – 5000$ worth of DeFi coins
• 2nd – 2500$ worth of DeFi coins
• 3rd – 1000$ worth of Defi coins
• 4th to 10th – 300$ worth of DeFi coins
• 11th to 20th – 200$ worth of DeFi coins
• 21st to 30th – 100$ worth of Defi Coins
• 31st – 50th – 50$ worth of DeFi Coins
• 51st – 100th – 20$ FTX Line of Credit

To enter the competition users simply have to go to the subaccount tab on their FTX profile and select ‘DeFi’. From there they can transfer funds from their main account and begin competing.

Read our FTX Review

Visit the Competition Page

FTX an exchange launched in 2019 has since Friday launched its DeFi Index. The index aims to track the value of a basket of DeFi products.

The index was launched after a vote was held on the FTX platform. Holders of FTX’s FTT Token could vote between either the DeFi index or VeChain with the DeFi index winning by a large margin.

Currently the index is made up of 11 different coins. KNC, LEND, MKR, KAVA, ZRX, LRC, REN, REP, BNT, SNX, and COMP. The full index weightings can be found on FTX’s help page.

DeFi stands for decentralized finance and represents a broad net of cryptocurrency products that have one main theme in common. Taking existing traditional financial systems and products and making them trustless and transparent through the use of blockchain technology. You can bring a lot of profits through the vast arena of opportunities bitcoin and cryptocurrency trading provides which are backed by Blockchain Technology. Good knowledge of bitcoin trading through trading bots will take you a long way. Have a look at this bitcoin loophole review which can make your trading easier and flexible. Get a pace with the best performing asset on the whole planet and start trading now.

DeFi products can vary from decentralized exchange tokens such as ZRX to liquidity aggregators with KNC or stablecoins that accrue interest.

At the same time that FTX launched its DeFi Index it launched both a market for COMP. Another DeFi product. COMP and CUSDT only launched this week. COMPS value has more than doubled in that space of time and according to DeFi Market Cap it is currently the largest DeFi product with a market capitalization of over $2 billion. Jumping the previous leader MakerDAO.

COMP is a decentralised governance token which allows users to vote on changes to the Compound protocol. These changes can be the addition of new assets to the platform, token buy backs, and fee changes. Mycryptopedia has written an excellent article explaining the entirety of the Compound protocol.

Alongside the launch of the perpetual swaps for COMP and the DeFi index they launched a variety of futures contracts and leveraged tokens. Since the launch COMP has risen over 40% while DeFi has risen over 15%.

FTX.com has made a name for itself in recent months. Its extensive range of trading products, brand new features, and a smooth sleek trading experience has enticed many traders to sign up for the exchange.

Due to the stringent nature of US financial regulation US users can not sign up for FTX.com and so FTX.US was born. But can it live up to reputation that FTX.com set? Keep reading and find out.

In this review we will assess FTX.us on 3 key criteria. Safety, Security, and Regulation. Trading Fees. Markets and Standout Features. We will conclude by giving our conclusion and score rating.

Use the contents table below to navigate to the section most interesting or relevant to you.

1. About
2. Safety, Security, and Regulation
3. Trading Fees
4. Markets and Standout Features
5. Conclusion

About FTX.US

FTX was originally founded and launched by Sam-Bankman Fried and Gary Wang in 2019. Both founders graduated from MIT. Sam progressed on to join Jane Street a quantitative trading firm based on Wall Street. While Gary became a software engineer at Google aggregating prices for their Google flights service.

Their combined knowledge in both pricing systems and quantitative trading is what brought them both into the cryptocurrency realm. In the midst of the 2017 bull run they founded their own quantitative trading firm known as Alameda Research which set out to employ quantitative trading methods in the cryptocurrency market. This firm grew to become one of the largest trading firms in the cryptocurrency market. Currently Alameda does over $600 million in trading a day.

In an interview with Venture Coinist Sam outlined that it was the launch of Alameda Research which triggered their inspiration to launch their own cryptocurrency exchange. Subsequently launching FTX.com.

It was from the launch of FTX.com that FTX.us arrived. Hoping to take market share from already established US exchanges.

Safety, Security, and Regulation

Account Security

Like most other exchanges FTX has support for standard Google 2 factor authentication (2FA). 2FA enables users to add an extra layer of protection to their account. When you login with 2FA enabled you will be asked to enter a 6 digit pin generated on the Google Authenticator App. This ensures that even if your accounts email and password to FTX is compromised your accounts funds will still remain secure.

FTX also has support for withdrawal passwords. When this setting is enabled users will be asked to enter an additional password if they wish to withdraw funds. Again adding an additional layer of security to your funds.

Platform Security

Since launch FTX has not had a breach in either customer funds or data.

FTX uses cold storage to ensure the safety of user funds. Cold storage is where the keys to coins are kept offline which in theory can prevent hackers getting access. A smaller portion of coins are kept in a hot wallet which facilitates day to day transactions such as withdrawals.

Platform Stability

Before signing up to an exchange platform stability is always something to keep in mind. Nobody wants to trade on a platform that is going offline. It can cost traders time and money.

FTX’s platform stability has been overall very good. The platform had some minor teething issues when starting out but these have largely been resolved.

On what has been coined Black Thursday where on March 12th Bitcoin crashed by over 50%, FTX, along with every other major exchange had issues with downtime. FTX went temporarily offline for spots throughout the day and had other issues where orders were not going through. However overall it did better than average on perhaps the biggest stress test in crypto history.

KYC and AML

FTX’s KYC system is similar to that of other US based exchanges. There are 4 levels of KYC. By providing more documentation you increase your KYC level and unlock extra features. For example, increased withdrawal limits.

When you first create an account on FTX.us you will be at level 0. At this level you will have a have a life time withdrawal limit of 10,000$.

To get to level 1 you must submit basic information such as your name, state, and address. You do not have to provide any official documents at this level. By doing this you will gain the ability to withdraw up to 10,000$ a day as well as get to use ACH bank deposits.

To get to level 2 you have to provide a picture of your passport, as well as a selfie of you holding your passport.

Finally to get to level 3 you have to complete all previous levels as well as provide proof of address and a bank statement. This will remove any withdrawal limits, you will gain full wire transfers, and essentially full access to what the platform has to offer.

Completing the KYC is straightforward once you have the relative documentation at hand. Simply navigate to the KYC tab within settings. Once your application has been submitted FTX staff will review your application within 24 hours.

Regulation

Currently FTX.US does not accept users from the states of New York or Washington

FTX.US has done the utmost to be regulatory friendly with US financial lawmakers. This exchange has been built from the ground up to essentially be just that: A US based exchange so I am confident that it will stay on the good side of US financial regulations.

This does come up at cost when compared to FTX.com but we will address this later.

Trading Fees

Trading fees on FTX.us are tiered based on how much you trade. So the more you trade the less you will pay in fees as a percentage. Below is a table of the full fee schedule.

Withdrawal and Deposit Fees

FTX does not charge for deposits or withdrawals with cryptocurrency. FIAT deposits made via ACH transfers also do not incur any fees.

When using wire transfers there is a 1% fee up to a maximum fee of 35$ and a minimum fee of 5$.

FTX Fees in Comparison to the Competition

Due to the tiered nature of FTX’s fee schedule it is hard to make a direct comparison to that of other exchanges as the fees you pay are based off your trading volume. For simplicity in the table below we will assume tier 0.

As you can see from the table above one of FTX.US’ main competitors is charging much lower fees than them. At the first tier Binance.US’ taker fees are 0.3% cheaper.

One interesting point is how much more expensive fees are on FTX.US than FTX.com. The maker fee is 0.08% more expensive and the taker fee is 0.33% more. However as you go up in 30 day trading volume the fees become rather similar.

CEO Sam Bankman-Fried went on Twitter to state that this was due to the increased cost of business within the US.

Markets and Standout Features

Perhaps the largest discrepancy between FTX.com and FTX.US are the unique features and variety of markets. FTX.us is completely stripped down when compared to its sister site.

Currently there are only 6 available cryptocurrencies on the platform. BTC, ETH, BCH, LTC, PAXG, and USDT. Wiht both a USD and USDT pair. This is compared to FTX.com which has over 100 markets.

But some might say that comparing it to an exchange operating outside of the US is unfair which is true. However, if we compare it to Binance.US it still comes out well below par, with Binance.US having 3x more tradeable markets.

In terms of features on FTX.US there are very few. On FTX.com there is leveraged tokens, options trading, prediction markets, and Quant Zone. However, on FTX.US none of these are present.

However that is not to say that it is all poor for FTX.US. They’re offering up to 10x leverage on a US based exchange, they have a solid mobile app for trading on the go, and it is easy to get orders filled. The fundamentals are definitely present.

Stringent US regulatory policy may be what is holding the exchange back. We have seen this with other US based exchanges where they are incredibly reluctant to launch new markets due to the fear of catching the eye of regulators.

Conclusion

FTX’s move into the US market is a positive for the cryptocurrency market. The more competition the better off the consumer. Increased cryptocurrency business within the US may also encourage regulators to loosen the financial regulation surrounding cryptocurrency.

However, in FTX.US’ current state there is not much that would entice me to sign up to the platform. Other US based platforms currently have a clear advantage. Both in terms of fees and platform features.

That is not to say that FTX.US’ current state will be all that it amounts to. The exchange is brand new, there is still huge room for improvement and the FTX team have already demonstrated their ability to create a great platform once. Why could they not do the same again?

FTX has made waves within the cryptocurrency industry in recent months. Its vast array of products and features in combination with its deep liquidity have enticed many cryptocurrency traders to sign up for the platform.

In this article we hope to answer the question; is FTX the best up and coming exchange? And if so should you sign up for it?

Review in Summary

In this review of FTX we will assess the exchange based on 4 key criteria. Safety, Security, and Regulation. Trading Fees. Markets and Standout Features, and finally Ease of Use. We will conclude by giving our conclusion and score rating.

You can use the contents table below to navigate to the section most relevant to you.

1. About
2. Safety, Security, and Regulation
3. Trading Fees
4. Markets and Standout Features
5. Ease of Use
6. Conclusion

Founded by Sam Bankman-Fried and Gary Wang. FTX launched in 2019. Both founders graduated from MIT. Sam progressed on to join a quantitative trading firm known as Jane Street. While Gary became a software engineer at Google aggregating prices for their Google Flights service.

Their combined knowledge in both pricing systems and quantitative trading is what brought them both into the cryptocurrency realm. In the midst of the 2017 bull run they founded their own quantitative trading firm known as Alameda Research which set out to employ quantitative trading methods in the cryptocurrency market. This firm grew to become one of the largest trading firms in the crypto market. Currently doing over $600 million in volume a day.

In an interview with Venture Coinist Sam outlined that it was the launch of Alameda Research which triggered their inspiration to launch their own cryptocurrency exchange. Citing that trying to use these other exchanges was frustrating and tiresome and they thought they could bring something much better to the cryptocurrency market.

Safety, Security, and Regulation

Account Security

FTX has industry standard support for Google 2 factor authentication (2FA). 2FA enables users to add an extra layer of security to their account. After entering both their email and password users are asked to enter a 6 digit randomly generated pin from the Google Authenticator app. This ensures that should a bad actor have access to both your email and password he will still not be able to gain access to coins stored on the exchange. 2FA is compulsory on FTX.

FTX also supports additional withdrawal passwords which require users to enter an additional password to withdraw. This password is different from the one users use to log and adds an additional layer of security.

One feature which is absent on FTX but present on other exchanges is the ability to whitelist certain IP addresses. So you can only login from a certain IP. However this is not a deal breaker and may be only useful to a small percentage of users.

Platform Security

Since its foundation FTX has not had a breach in either customer funds or data.

FTX uses cold storage to ensure the safety of user funds. Cold storage means that the keys to the coins stored in FTX wallets is kept offline away from potential hackers. A smaller fraction is then kept in what are called hot wallets which are connected to the internet. These hot wallets facilitate day to day transactions on the exchange such as withdrawals.

Platform Stability

The stability of FTX has overall been very good. The platform had a few teething issues when first starting out however these have been largely ironed out. The platform like its competitors still goes down occasionally but these are rare.

KYC and AML

FTX’s KYC policy is similar to other platforms and easy to understand. There are four levels of KYC. You increase your KYC level by providing more verification and documents. By increasing your KYC level you will be allowed greater withdrawal limits, and the ability to deposit FIAT currency and buy Bitcoin directly through the exchange.

When you first register, create your account, and confirm your email you will be at level 0. This level gives you a lifetime withdrawal limit of up to 1000$. You will be unable to withdraw more once you reach this cap.

Level 1 requires you to provide your name, country of residence and your local province. FTX do not ask for documents at this level. At level 1 you gain the ability to withdraw up to 2500$ a day. However, if you trade more than the sum of all your deposits and withdrawals you can withdraw up to 9000$ a day.

Level 2 requires you to provide your full legal name, date of birth, proof of address, the source of your assets, passport or other government ID, and a picture of yourself holding your ID with the date and a piece of paper with ‘FTX’ written on it. Once completed you are allowed unlimited crypto withdrawals.

Finally, to complete level 3 you need to finish all previous levels and to now provide a recent proof of address and, to provide a recent bank statement. Once this is done you gain the ability to wire money to FTX and buy crypto directly on their FIAT markets.

Completing the steps is relatively easy once you have the documents for level 2 and 3 at hand. Simply navigate to the KYC page in your settings tab. Once your application is submitted FTX staff typically review your application within 24 hours.

Regulation

FTX.com does not currently accept users residing in the US. However the newly launched FTX.US does.

FTX is registered under FTX Trading LTD which is incorporated in Antigua and Barbuda. The registering of FTX here may raise some red flags to some but this practice is common in the cryptocurrency industry and some might say is necessary in order for an exchange to succeed. Strict regulatory guidelines in larger jurisdictions such as the US and EU make it almost impossible for exchanges to operate well and so a large percentage of companies register where financial regulation is more relaxed.

However there may still be some regulatory uncertainty’s with the platform. Earlier this year FTX launched a market which US regulatory boards may not approve of. The market in question is FTX’s crude oil futures market.

Back in 2018 the CTFC which regulates commodity trading in the US sued a cryptocurrency CFD platform which enabled users to trade oil and gold with Bitcoin. The domain was also seized by the FBI.

FTX has strict warnings that prohibit users trading oil if they are from a prohibited country. So I doubt the same faith awaits them as 1Broker but it is worth keeping in mind.

Trading Fees

Trading fees on FTX are tiered based on on how much you trade. The more you trade the less your trading fees will be. For example if you trade less than $1 million in 30 days your taker fee will be 0.07% while if you trade more than $1 million your taker fee will be 0.06%

See the table below for the full fee list. Maker fees represent what an order would cost if you used limit orders to fill your order. While the taker fee represents the fee if you used a market order.

FTX also has their own exchange token known as FTT. Holders of this token also get fee reductions based on how much tokens they hold. See the table below for the full benefit of holding these tokens.

FTX has a number of atypical trading products such as their leveraged tokens. We will address these products later in our review. These leveraged tokens have a creation and redemption fee of 0.10% and a daily management fee of 0.03%.

Using leverage of over 50x increases trading fees by 0.02%. Using leverage over 100x increases trading fees by 0.03%. These additional fees are paid to the insurance fund rather than FTX. Adding directly to the insurance fund is done to prevent socialized losses like what happened with margin trading on OKex in 2018.

Withdrawal Fees

Another factor to consider when using a platform is deposit and withdrawal fees. On FTX there are no fees for depositing or withdrawing money. If you decide to withdraw Bitcoin you will only have to pay network fees.

FTX Fees in Comparison to the Competition

Due to the tiered nature of FTX’s fee structure it is harder to make a direct comparison to another exchange which has a flat fee. But if we assume the lowest fee tier of less than 1m$ in trading volume FTX fees are by and large more expensive than those of their main competitor, BitMEX. However, If you trade more than $1 million in thirty days your fees will be lower than the example provided here.

BitMEX has a flat fee regardless of trading volume of -0.025% for maker and 0.075% for taker. The negative maker fee means you will receive a rebate for adding liquidity. This is considerably better than FTX’s 0.02% fee. The taker fee on FTX however is lower by 0.005%.

The justification FTX makes for its higher fees is that if you widen the spread between maker and taker fees you will inevitably widen the spread between the bid and ask in the order book. They state that market makers will shift their positions to compensate for the spread in maker-taker. In summary you will either pay the fee in the spread on the exchange or in the fee charged.

FTX does want to incentivize people to provide liquidity–doing so means taking the risk that prices will move against your order.  But we want to make sure that we don’t make markets artificially wide, which is why our maker – taker spread is significantly lower than many of our competitors.

FTX

Similarly both BitMEX and FTX charge no fees for withdrawals or deposits.

Markets and Standout Features

Trading Pairs

FTX has the widest variety of trading pairs perhaps out of any derivatives exchange in crypto. Currently having over 50 trading pairs. Each of these trading pairs typically has both a perpetual swap contract, variety of futures contracts and a spot market where you can trade directly in US dollars.

In comparison to BitMEX which only has 8 trading pairs FTX is streets ahead.

Leveraged Tokens

Not only does FTX have a wide variety of pairs it also has unique products which are not available anywhere else. One of these products are leveraged tokens.

These leveraged tokens give exposure to certain cryptocurrencies with leverage of up to 3x to the upside or downside.

FTX gives three potential reasons as to why using leveraged tokens might be better than simply using leverage to buy or sell an asset:

The first reason is that leverage tokens make it easier to manage risk. Leveraged tokens give traders the opportunity to use leverage without paying too much attention to managing leveraged positions. This is because the leveraged tokens manage leverage themselves without the need for trader input. FTX gives the example below.

BULL/BEAR/HEDGE tokens will automatically reinvest profits into the underlying asset; so if your leveraged token position makes money, the tokens will automatically put on 3x leveraged positions with that.

Conversely, BULL/BEAR/HEDGE tokens will automatically reduce risk if they lose money. If you put on a 3x long ETH position and over the course of a month ETH falls 33%, your position will be liquidated and you will have nothing left. But if you instead buy ETHBULL, the leveraged token will automatically sell off some of its ETH as markets go down–likely avoiding liquidation so that it still has assets left even after a 33% down move.

FTX

The second reason is managing margin. Leveraged tokens will manage their own margin. You can simply buy $10000 of BTCBULL which gives you exposure to 30000$ of Bitcoin. If price sharply declines 33% chances are you might be liquidated, but your maximum loss can not exceed 10000$ and you did not have to worry about your liquidation price or collateral.

Leveraged tokens have gone to zero before where the automated system which maintains them could not catch up with an extremely sharp decline in price. But this is rare as the automated system typically can begin to sell off exposure before liquidation.

The final reason given by FTX as to why using leveraged tokens is beneficial is that they are ERC-20 tokens based off the Ethereum blockchain. This makes them transferable too. So you can keep them off the exchange in an Ethereum Wallet for example. It brings up an interesting use case where you could keep 30000$ of a Bitcoin long in an Ethereum wallet.

There are leveraged tokens for every market on FTX.

Indices

Alongside all the variety of tradeable markets on the exchange there are a number of cryptocurrency indexes curated by FTX themselves.

Some examples of these indexes are their EXCH-PERP, PRIV-PERP, and ALT-PERP. The EXCH-PERP is an index of exchange tokens such as Binances BNB, Huobi Token, and Bitfinexes LEO token and others. The PRIV-PERP is a basket of 9 different privacy coins like Monero, Komodo, and Zcoin. While their ALT-PERP is an index of a number of high ranking altcoins.

These index products are incredibly convenient for traders and investors who are bullish on certain sub sections of the cryptocurrency market to gain exposure. For example if I am an investor who is bullish on privacy coins I can gain exposure to all of them in one market rather than have to buy and manage them all separately.

Options

The demand for more complex derivatives in crypto has increased over the past few years and FTX is helping to fill that demand with its options markets.

Users can request quotes directly through the options market tab. Here users can request quotes for calls and puts or make bids on other users requests for calls and puts. There is also a convenient graph on how profit and loss for a chosen option will work.

Alternatively users can trade FTX’s volatility markets. There are currently 3 main types of volatility contracts. MOVE contracts, BVOL, and IBVOL.

Move markets for those familliar with options trading are essentially call straddles. This is a type of options trade where you buy a put option (betting price will fall) and buy a call option (betting price will go up). The result is that traders will profit from a volatile move in price as long as the move is sharp.

Move contracts work somewhat similarly where they will expire to the absolute value of the change in the price of BTC over a specific time period. That time period varies based on what move contract you choose. There are move contracts for the day, the next day, the week, and all the way up to a few months away.

There are also BVOL and IBVOL. Both are erc-20 tokens similar to leveraged tokens however they either track 1 times the the implied volatility of Bitcoin (BVOL). Or, -1 times the implied volatility of Bitcoin (IBVOL). Implied volatility is a metric which tracks the markets view of a change in an assets price.

Exotic Crypto and Non-Crypto Markets

If the previous trading markets were not enough FTX has also began to list markets which you might have not even considered. One of these is its new hashrate futures market.

Just launched before the recent halving, hashrate futures allow traders to long or short what they believe Bitcoins hashrate will be at a specific date. There are a variety of futures expiring from 6 months away to 18 months.

The futures contracts expire to the average difficulty value of blocks mined divided by 1 billion.

These contracts can be useful for pure speculation. Or miners can use them to hedge. The market is in its infancy so it will be interesting to see how traders use them to their advantage.

FTX has also began to dabble in non-crypto markets. One of these non-crypto markets we have mentioned earlier and its FTX’s crude oil market. Previously we have discussed it in regard to its potential regulatory risk. However if you are in a jurisdiction in which trading crude oil on FTX is allowed it may be worth dabbling it.

Gold also has a market on FTX through its Tether gold perpetuals. Tether Gold (XAUT) is similar to USDT in that it is simply a token which is backed by a real world asset. In USDT’s case a dollar, in XAUT’s case an ounce of gold.

Traders can trade the price of gold through XAUT the same as they would on a traditional financial exchange. It being a token backed by gold also means that it is free of the regulation that FTX’s oil market is shrouded in. If you’re allowed sign up to FTX you can trade XAUT.

FTX has also began experimenting with prediction markets, launching for the 2020 American Presidential Campaign. Here traders can bet on who they believe will be elected.

Each presidential candidate has a market which varies between 0$ and 1$. If the candidate wins the contract expires at 1$ while if they lose it expires at 0$. The variance between 0$ and 1$ in valuation represents what traders feel the probability of a certain candidate being elected is.

If you’re informed on US politics you can imagine how the valuation of some candidates has gone.

Trading Competitions

FTX has also set its self aside from its competition by doing regular large scale trading competitions. These competitions often have large prize pools making them incredibly competitive.

As an example the current competition titled ‘Man vs Machine’ puts regular traders against quantitative traders to decide who is best. Regular traders must trade through the platform while quantitative traders must trade through the API or Quant Zone.

There are individual prizes top traders on both teams as well as team prizes for the winners.

Quant Zone

For those with an interest in programming or quantitative trading you may want to look into Quant Zone. FTX’s attempt at trying to make quantitative trading easier.

Quant Zone allows you to create trading algorithms directly on the platform, without the need for API’s. Within the Quant Zone interface users can create trading rules and actions. These trading rules and actions can then make up your very own quantitative trading strategy.

Your trading strategy can be as simple as shorting Bitcoin when it is over 10000$ or you can create something much more refined and sharp.

This is what is available now but in future iterations FTX plans to launch a number of new features. One said feature is the ability to create your own trading program and then share it with other users. When these traders then use your program you will earn a portion of their fees.

Mobile Apps

FTX has both an app for Apple and Android devices so users can monitor and manage trades on the go.

The app is not the most intuitive mobile experience but it does what it needs to do.

Liquidity

Liquidity is perhaps the most important force behind whether an exchange will be successful or not. Having no liquidity creates a sort of exchange death spiral. If you have no liquidity you will not attract users to sign up, and if you have no users you won’t attract liquidity. You can have the best trading platform in the world, but if you have no liquidity its nothing but a tech demo.

FTX however never fell into the liquidity death spiral that many other smaller exchanges fall into. From the get go FTX had the advantage of coming from Alameda Research, one of the largest liquidity contributors in the cryptocurrency industry. On day 1 the exchange had great liquidity.

Not only were Alameda providing liquidity but so too were other liquidity providers. FTX went out of their way to recruit other liquidity providers and trading firms in the crypto space.

Liquidity on FTX still remains very strong. On larger pairs such as Bitcoin and Ethereum you will typically have no problems with getting orders filled. Volume on FTX is typically lower than other large exchanges such as BitMEX and Binance but this is unlikely to negatively affect you unless you trade very large sizes.

As you go from Bitcoin and Ethereum down to the smaller altcoins volume begins to decline but this is the case with every exchange. However, again if you plan on trading altcoins with large size you may want to keep it in mind.

Ease of Use

Trading Experience

The trading experience on FTX is much like that of any other derivatives exchange. If you have used other platforms like BitMEX you will be right at home.

Even if FTX is your first experience with cryptocurrency trading it is all largely intuitive.

You can search through the markets in the markets tab and select the one you want to trade or alternatively you can use the search bar.

Once you have found the market you want to trade you can place orders using the orders box. Here you can select what price you want to buy or sell the asset at, what order type you want to use, and how much of the asset you want to buy or sell.

Once you have placed an order it will appear in your open orders tab at the bottom. It will give you the details of the order you just placed as well as how much of your order has been filled.

Once your order has been filled in your positions tab it will show you details like profit and loss, estimated liquidation price, and the notional size of your order.

One thing to keep in mind which might be different from previous trading platforms is that FTX only supports cross leverage. Cross leverage is contrasted against isolated leverage. Isolated leverage is what most people are use to and is the easier to understand. With isolated leverage if you get liquidated on a trade you will only lose the amount you put into that trade. So if you bought 10000$ worth of Bitcoin with 10x leverage you have put up 1000$ in margin. If Bitcoin falls 10% your position will be automatically liquidated and you will lose your 1000$.

However with cross leverage the assets of your whole account are used as margin. This typically means that you are less likely to get liquidated but when you do get liquidated assets in your wallet will be liquidated as well.

If you want to use isolated leverage on FTX there is a work around by creating a sub-account. Simply create a sub-account then transfer the maximum you want to risk into the sub-account from your main account. If you get liquidated in this case only your sub-account’s assets will be liquidated and the assets in your main account will remain untouched.

User Interface

Perhaps my largest albeit a relatively minor issue with FTX is its UX. From the home page there is drop down menus, hover menus, all directing you to an infinitude of different things. If I weren’t involved in crypto I wouldn’t even think based on the home page that it was a trading site.

If we compare it to BitMEX when you first login you’re immediately presented with a trading terminal, you can see price charts, trades taking place, markets, your orders and your positions. You immediately know you are in an environment where something to do with trading is taking place.

While when you first login to FTX you’re at minimum 2 clicks away from even getting a glimpse of a trading interface.

User interface is not the greatest concern when signing up for an exchange. FTX is still excellent once you get used to it. However, if FTX worked on crafting a good UI and UX it would make a great exchange even better.

Conclusion

Now that we have assessed FTX on all of our criteria we can finally give out conclusion and final score.

FTX although only starting to make its first trades just over a year ago has made massive leap forwards. In terms of the sheer number of features and markets on offer it is leagues ahead of the competition. No other derivatives exchange offers options trading, leveraged tokens, Quant Zone, prediction markets, a vast array of indices, spot markets, and trading competitions all in one package.

There are slight issues with regulation. Having an oil futures market puts them on the radar of regulators when they don’t necessarily need to be.

In terms of KYC and AML leniency FTX is not the best but it is not the worst either. On the plus side you can begin trading without having to submit any form of documentation. Once you confirm your name and country of residence you can withdraw 2000$ a day which is good. However, in comparison Bitmex, the largest exchange has no withdrawal limits with no identity verification.

KYC on FTX may be due to its spot FIAT markets which allow you to wire money to the exchange, but for some that benefit may not outweigh the drawbacks.

The user interface is also an issue we brought up however this is not exchange breaking issue and is something that FTX can fix in future iterations.

To conclude, we posed two questions at the start of our review. Is FTX the best up and coming exchange? And is it worth signing up for? To answer simply the answer to both questions is yes.

This review contains affiliate links. By using them you will receive a 5% discount on your fees. You will also help support our website. Although we receive commission through our affiliate links we remain as objective and honest as possible when reviewing. FTX did not contact or send us money to conduct this review.

One of the major players to emerge from the cryptocurrency industry last year was FTX. Launching in mid 2019 on the back of an incredibly successful quantitative trading firm Alameda Research they took the exchange industry by storm becoming one of the top 5 exchanges by volume in a matter of weeks.

One of major keys to success that allowed FTX to become so prominent so quickly was its heavy focus on innovation. Having new and unique trading products such as altcoin indices or leveraged tokens brought droves of traders to the platform. And this innovation looks like its going to continue with the launch of options contracts.

Options contracts are a somewhat complicated financial product and their complexity goes well beyond the scope of this article. In the most simplest of forms they allow someone to buy or sell a specific asset at a certain price within a certain time frame. Buying an options contract when you expect it to go up is a ‘Call’. This is opposed to a ‘Put’ which is a contract to sell an asset at a specific price. You can get a better understanding of options here.

Options trading is not new, already doing billions of dollars in volume on traditional financial markets. However their growth in cryptocurrency markets is. They were first popularly launched by Deribit in 2018. But remained relatively difficult for large players to use fully due to liquidity issues. However the final quarter of 2019 brought a lot more interest.

With this growth of interest more exchanges are launching options trading. OKex recently launched options on their platform. The giant that is CME Group also just launched options trading contracts based on futures. We wouldn’t be surprised to see other giants like BitMEX dip their toes in soon.

FTX Options Trading in its first day alone did 1700BTC in volume.

Options contracts aren’t particularly exciting in themselves. What is interesting though is what they represent. They represent the somewhat continued exponential growth of sophistication in cryptocurrency markets. Whether this increased sophistication is a good thing or a bad thing is for you to decide..

There has been a huge rise in the number of exchanges offering their own exchange tokens. The early days were brought about by Binance’s BNB token. Which launched during the famous bull run of 2017. Since its launch, returning over 13000%. Other major Exchanges like, Bitfinex, Huobi, Bitmax, Kucoin, among others have all launched their own exchange tokens since. The newest exchange token to be launched is FTT. Backed also by a brand new derivatives exchange FTX. But where does FTT fit into this already competitive market? Does it have good value propositions? Lets find out, this is our FTT Token Review.

The Exchange Itself

To review an Exchange token without reviewing the exchange itself would be futile. You can have the best value propositions ever but if you’re exchange is poor then your token will reflect that. We have previously gone in depth on the FTX Exchange in our FTX Exchange Review. However we will cover it briefly here.

As previously mentioned FTX is primarily a Cryptocurrency Derivatives Exchange. Derivatives trading is where the vast majority of cryptocurrency trading occurs and it is this market that FTX is targeting. The current market leader being BitMEX which has traded over 1 Trillion dollars in the past year alone.

FTX is currently giving BitMEX a run for its money. BitMEX’s essential monopoly on cryptocurrency derivatives trading lead them to complacency. Issues with downtime, order submission errors, among others all allowed FTX to pick up the pieces as traders looked for alternatives.

One of the main hurdles exchanges have right out of the gate is liquidity. If you don’t have liquidity you cannot attract users. FTX had this issue solved right from the beginning having been born from one of the largest liquidity providers in crypto Alameda Research.

FTX having solved the liquidity problem had the opportunity to put 100% of their attention towards innovation and innovate they did.

To put it in perspective BitMEX the major derivatives exchange in crypto only currently has 8 markets. Whereas FTX has over 100 tradeable pairs. Not only does it have a large quantity of markets but of these markets some are brand new. FTX has markets for leveraged tokens, indices for privacy coins, altcoins, and DeFi tokens, prediction markets, hashrate futures. Its innovative features such as Quant Zone which allows users to create quantitative trading scripts directly on the platform, and its trading competitions have enticed many traders to sign up for the exchange.

The Tokens Value Proposition

FTT’s token utility is not too dissimilar to something like Bitfinex’s LEO token. However, there are some unique elements.

Much like LEO and Binance’s BNB, FTX carries out token buy back and burns based off of revenue generated by the exchange. Currently 33% of all fees earned by FTX will be used to buy and burn FTT tokens. The thought process behind buy and burn schemes is to drive up the price of FTT tokens by continuously reducing the supply. What is however unique to FTT is the concept of socialized gains in which a portion of money added to the exchanges insurance fund will be used to buy back FTT.

The insurance fund is something exclusive to cryptocurrency derivatives exchanges and ensures users on the exchange are liquidated properly should their not be enough liquidity from traders to close someones position.

We’ve performed backtests and live simulations to see how FTX will fare during large market movements. While other futures exchanges suffered from clawbacks, FTX managed to net increase their insurance fund by a sizeable amount thanks to its unique backstop liquidity provider program. For instance, during a recent market move, Okex incurred ~$3 million of clawbacks. Meanwhile, our demo simulation which mirrored positions on OKEx demonstrated no clawbacks and a net gain of a million to our insurance fund.

FTT Token Whitepaper

Holders off FTT get the standard fee reduction on the exchange depending on how much FTT they hold. The fee reduction applies to both the live markets and OTC trading.

FTT can also be used alongside USD, USD Stablecoins, and BTC as collateral (to prevent liquidation) for trading on the exchange.

Conclusion

We pointed out the requirements for a successful exchange token at the beginning of this article. You need a solid exchange, which can generate consistent liquidity and attract new users. And you need a token that is actually worth something which will encourage people to buy it. You can’t just print a new ERC-20 token and throw some marketing behind it. Value propositions such as buybacks, and fee reductions, competition entrys, among others are absolute crucial.

In terms of both a solid exchange and token value propositions FTT has both

There has been a huge rise in the number of exchanges offering their own exchange tokens. The early days were brought about by Binance’s BNB token. Which launched during the famous bull run of 2017. Since its launch, returning over 13000%. Other major Exchanges like, Bitfinex, Huobi, Bitmax, Kucoin, among others have all launched their own exchange tokens since. The newest exchange token to be launched is FTT. Backed also by a brand new derivatives exchange FTX. But where does FTT fit into this already competitive market? Does it have good value propositions? Lets find out, this is our FTT Token Review.

The Exchange Itself

To review an Exchange token without reviewing the exchange itself would be futile. You can have the best value propositions ever but if you’re exchange is poor then your token will reflect that. We have previously gone in depth on the FTX Exchange in our FTX Exchange Review. However we will cover it briefly here.

As previously mentioned FTX is primarily a Cryptocurrency Derivatives Exchange. Derivatives trading is where the vast majority of cryptocurrency trading occurs and it is this market that FTX is targeting. The current market leader being BitMEX which has traded over 1 Trillion dollars in the past year alone.

FTX is currently giving BitMEX a run for its money. BitMEX’s essential monopoly on cryptocurrency derivatives trading lead them to complacency. Issues with downtime, order submission errors, among others all allowed FTX to pick up the pieces as traders looked for alternatives.

One of the main hurdles exchanges have right out of the gate is liquidity. If you don’t have liquidity you cannot attract users. FTX had this issue solved right from the beginning having been born from one of the largest liquidity providers in crypto Alameda Research.

FTX having solved the liquidity problem had the opportunity to put 100% of their attention towards innovation and innovate they did.

To put it in perspective BitMEX the major derivatives exchange in crypto only currently has 8 markets. Whereas FTX has over 100 tradeable pairs. Not only does it have a large quantity of markets but of these markets some are brand new. FTX has markets for leveraged tokens, indices for privacy coins, altcoins, and DeFi tokens, prediction markets, hashrate futures. Its innovative features such as Quant Zone which allows users to create quantitative trading scripts directly on the platform, and its trading competitions have enticed many traders to sign up for the exchange.

The Tokens Value Proposition

FTT’s token utility is not too dissimilar to something like Bitfinex’s LEO token. However, there are some unique elements.

Much like LEO and Binance’s BNB, FTX carries out token buy back and burns based off of revenue generated by the exchange. Currently 33% of all fees earned by FTX will be used to buy and burn FTT tokens. The thought process behind buy and burn schemes is to drive up the price of FTT tokens by continuously reducing the supply. What is however unique to FTT is the concept of socialized gains in which a portion of money added to the exchanges insurance fund will be used to buy back FTT.

The insurance fund is something exclusive to cryptocurrency derivatives exchanges and ensures users on the exchange are liquidated properly should their not be enough liquidity from traders to close someones position.

We’ve performed backtests and live simulations to see how FTX will fare during large market movements. While other futures exchanges suffered from clawbacks, FTX managed to net increase their insurance fund by a sizeable amount thanks to its unique backstop liquidity provider program. For instance, during a recent market move, Okex incurred ~$3 million of clawbacks. Meanwhile, our demo simulation which mirrored positions on OKEx demonstrated no clawbacks and a net gain of a million to our insurance fund.

FTT Token Whitepaper

Holders off FTT get the standard fee reduction on the exchange depending on how much FTT they hold. The fee reduction applies to both the live markets and OTC trading.

FTT can also be used alongside USD, USD Stablecoins, and BTC as collateral (to prevent liquidation) for trading on the exchange.

Conclusion

We pointed out the requirements for a successful exchange token at the beginning of this article. You need a solid exchange, which can generate consistent liquidity and attract new users. And you need a token that is actually worth something which will encourage people to buy it. You can’t just print a new ERC-20 token and throw some marketing behind it. Value propositions such as buybacks, and fee reductions, competition entrys, among others are absolute crucial.

In terms of both a solid exchange and token value propositions FTT has both