The FTX exchange backed by the Alameda research, a top cryptocurrency liquid provider, provides its users with access to a range of innovative trading products, including Bitcoin options, more than 45 leveraged tokens, 20 perpetual swaps, prediction markets, etc.
In this article, we are going to be doing a deep dive and review of the FTX exchange. There are a whole lot of exciting tales about FTX history and the innovations they are bringing to the crypto space. We will look into these and many more below. Let’s get started.
What is FTX?
FTX is a crypto exchange developed by traders for traders. In other words, it is a cryptocurrency derivative exchange which gives users a variety of innovative and unique trading options, most of which cannot be found elsewhere, with tremendous rewards and risk to match.
What’s different about FTX
Many things differentiate the FTX from other cryptocurrency exchanges. Most of it is the various tradable products offered by the platform. Let’s look into the different tradable products offered by FTX;
This is in the form of an agreement to buy and sell an asset at a predefined price. The FTX platform allows for perpetual futures on more than 20 cryptos like BTC, BNB, LINK, etc. The platform also allows for Index Future, which permits users to trade several segments of the crypto market with much more ease, such as Small-cap, large-cap, and middle-cap coins. The platform also allows for trade exchange tokens, privacy tokens, and regional baskets.
This allows users to buy cryptos and then trade them using the traditional techniques and market-matched orders. Most of the popular cryptocurrencies that are available for spot trading in the platform include BTC, ETH, LINK, BNB, USDT, FTT, etc.
It is like the European-style options contract. It permits you to sell an underlying asset at any predefined date and price. However, it is not mandatory. When you choose the options contracts, you have two options: “right to sell” or “right to buy.” Also, you have the right to trade long or short with leverage and can also set your strike price and expiration time. Once you have keyed in all the necessary details in the options contract, the FTX will give you a quote to generate a bid or offer the deal within seconds. However, you can also customize the setting to your choice.
FTX Leveraged Token
The FTX leveraged tokens give you more exposure to the cryptocurrency market without handling a leveraged position. The FTX exchange provides 45 different leveraged tokens and allows for up to 101x leverage. It places 10x leverages as a default for safety. It is divided into three distinct segments;
- The 1x tokens are known as a hedge. That’s, if the ETH value goes up by x%, the ETHHEDGE will go down by the same %.
- 0.5x Long is also known as HALF. That is, if the value of ETH goes by around 2x%, it also goes up by x percentage.
- 3x tokens are known as Bear or Bull.
In precise details, the Bull tokens are the ERC 20 tokens. If the Ethereum perpetual futures are up by x percentage, then the ETHBULL will replicate the same and go up by 3x percentage, and ETHBEAR will fall by 3x percentage.
In general, both BEAR and BULL tokens rebalance themselves automatically to maintain target leverage and stop liquidations.
FTX Move Contracts
The FTX Move contracts permit users to trade based on a particular cryptocurrency price movement by only risking a small amount. The movement can go in either direction.
These are futures that expire according to the amount of raw BTC. It can be daily, weekly, monthly, or even quarterly. However, the weekly contracts might not correspond with the calendar week. What determines it is the overall volatility of Bitcoin over a set period. It is one of the significant features that differentiate FTX from other cryptocurrency exchanges. And it draws users to the platform.
The FTX prediction market allows users to trade in various traditional ways like conventional betting. You can bet on any real-world event. You can either win, and the contract will settle at 100%, or you will lose, and it will drop at 0%. One great thing about this is that you can bet on who would win an upcoming election. The candidates will have a separate contract. The buy-in price will be different for each candidate, and it will depend on the likelihood of winning. They can short or long each contract. It is another unique feature that differentiates the FTX exchange from most of the other cryptocurrency exchange platforms.
The FTT is the native governance token of the FTX cryptocurrency exchange. It allows users to pay fewer fees for FX trading. You also receive socialized gains from the insurance fund. The token also allows you to buy and burn your fees weekly. The FTT token can also be traded on the spot/futures of the exchange, like trading in the Binance cryptocurrency exchange.
The token can also be used as collateral for future trading.
History of FTX Exchange
The FTX exchange was founded by Sam Bankman-Fried, a graduate of physics at MIT. He is also the CEO and co-founder of Alameda Research, a top cryptocurrency liquidity provider that allows FTX access to industry lending order books. The Alameda research institute controls over $100 million of digital assets and trades over $600 million to $2 billion daily across thousands of products like derivatives through FTX exchange.
Sam founded FTX in 2018 after leaving wall street to go and try his hands on something new. Since launching the exchange, the FTX has risen to the limelight tremendously. The Alameda, which turns over $2 billion a day, ranks among the top 10 on the BITMEX leader board of all-time most profitable traders. According to hedge funder-turned crypto enthusiast Mike Novogratz, the Bankman’s FTX is the most innovative exchange out there.
Also, Bankman came to the limelight again when he donated $5 million to Biden’s campaign organization in 2020, making him the second-highest donor. This also helped to increase the popularity of the FTX platform.
Other notable members of the team are Gary Wang, who is the CTO of the platform. Gary was a former software engineer at Google before co-founding the Alameda and FTX crypto exchange.
How to Sign Up on FTX
Signing up in the FTX exchange is very easy and straightforward. It is similar to signing up on other crypto exchanges. To sign up;
- Go to FTX and click on the “Register” tab at the top of the home page. After that, fill in your email and password and tick the terms and conditions agreement box.
- Click to verify and go to your email and confirm your account.
- You can now go back and log in and secure your account using the 2FA by clicking on “Account security” and choosing Authy, Google Authenticator, or SMS.
- You can now deposit funds to your account in order to trade; however, your account has a total withdrawal limit of $1000 until you complete KYC verification.
- Go to the “Settings” page and complete the KYC verification process and unlock higher withdrawal limits.
How to Buy on FTX and the Supported Payment Methods
Buying on FTX exchange is very easy. The platform allows for a wide range of deposit methods for traders to fund their accounts on the exchange. They allow the deposit of cryptocurrency, stablecoins, or fiat currency.
The platform also allows the use of traditional bank cards such as VISA and Mastercard for deposit.
The crypto exchange supports the deposit, withdrawal, and trading of several fiats and digital currencies. The platform supports the deposit and withdrawal of the following fiat currencies; USD, EUR, GBP, AUD, CAD, CHF, HKD, SGD, ZAR.
The platform also supports the deposit/ withdrawal of the following cryptocurrencies; BTC, ETH, BCH, BNB, LTC, FTT, BTMX, TRYB, and USD stable coins like; USD, USDC, TUSD, BUSD.
To buy a coin on the platform, login to your account and locate setting and fund your account. You can also link your credit card and use it to purchase your desired cryptocurrency.
FTX trading Fees and Charges
FTX charges are minimal. The platforms offer one of the cheapest fees for trading ranging from 0.07% to 0.04% for its future and spot market, which is based on the taker and maker model. The FTX exchange fee structure uses a tiered system that benefits high-volume traders with lower trading fees.
Below is the FTX maker and taker fees;
|Tier||Volume (30d)||Maker Fees||Taker|
The platform charges fees of 0.10% and a daily management fee of 0.03% for leveraged token. Also, if you wish to use the leverage of 50x or higher, the trading fees increase by 0.05%, with half of the FTX fees allocated to the insurance fund.
Furthermore, for all the markets excluding BTC-PERP and ETH-PERP, using the leverage of 50x rises the trading fees by 0.02% and 100x or higher trading fees increases by 0.03%, which is paid to the FTX insurance fund. Remember that BTC-PERP and ETH-PERP do not incur more charges for using higher leverage.
How Secure is FTX?
Currently, FTX is one of the largest cryptocurrency derivatives exchanges in the world. It is a platform that is secure and highly safe for transactions. Users can use the 2FA to access their accounts and withdraw funds, making it very hard for hackers to access users’ funds.
According to the platform, its team is working with top security researchers to detect potential threats and vulnerabilities while ensuring that the platform is safe for transactions.
Although the platform did not open its security practices, considering that there have not been any issues of hacking in the platform, we can say that it is safe for trading.
The FTX cryptocurrency exchange has separated itself from other cryptocurrency exchanges by offering new and innovative futures trading products in the futures and leveraged tokens space. The platform allows for over 100 crypto trading pairs to select across spot, futures, options, index, and leveraged tokens. It means that users will not be short of finding trade opportunities.
However, looking at the platform’s services shows that it is not for beginners in crypto trading. Products like leveraged tokens, perpetual swaps, MOVE contracts, and bitcoin options take some time to understand and do not fit well for those that started trading newly.
Derivative trading is a bit complicated than spot trading, and leveraged trading can lead to higher losses than expected if you don’t master it. The complex nature of these trading products makes them more suitable for experienced traders. However, above all, the FTX is one of the best exchanges to trade cryptocurrencies.
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