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What Is FTX Token? FTT Explained in Plain English

UPDATE ON FTT TOKEN: FTX, the issuer of the FTT token, filed for bankruptcy protection in November 2022. The information in this article was relevant when the FTX exchange was operational and is not relevant now.

FTX Token (FTT) is a beloved cryptocurrency for traders with just under 30,000 total addresses holding the token. In just over 3 years, it has grown to a market cap of over $3,000,000,000 USD, The FTX Token has proven itself useful for traders all around the world. But is this cryptocurrency’s utility built to last? Could FTT continue to increase trading efficiencies or will it become something from the past? In this article, we’ll answer these questions by explaining what the FTX token is, how it works, and how it differs from other popular cryptocurrencies. It took us countless hours of research to write this article. Thus, we can guarantee that  this guide will help you understand all there is to know about the FTX Token. 

What Is FTX Token (FTT)?

FTX Token (FTT) is a utility token that provides access to the FTX trading platform’s features and services. It is also the native token of the FTX ecosystem. It creates utility in the FTX ecosystem by incentivizing users to hold and use the token. FTX claims that it differs from other exchange utility tokens because it offers unique features. For example, clawback prevention is something that is very important to FTX and is not found on other exchanges. Clawbacks are when an investor loses money due to liquidation. FTX prevents this from happening by using a three-tiered liquidation model. 

The FTX Token was created to provide traders with a way to save on trading fees. When users pay for their trades using FTT, they are given a discount on the fees charged. The more FTT a user holds, the bigger the discount they receive. In addition, users who hold FTT can vote on new listing proposals and much more! 

Better referral rates, free daily ERC20/ETH withdraws (up to 1000 per day), and a higher probability of airdrops are additional bonuses that FTT holders can expect to receive. The best way to think of the FTX Token is as a way to reduce trading costs and earn rewards for using the FTX platform. It’s an incentivizing system that should make users want to hold and use the token. 

Another benefit of FTT is that they are leveraged tokens. This means that you can trade with up to 3x leverage. Users no longer have to trade on margin which means that they can avoid paying interest on their positions. This is important because it allows you to trade with more leverage without putting your entire account at risk. These leveraged tokens are ERC20 compatible which means that they can be stored on popular Ethereum wallets like MetaMask. 

In addition, the FTX Token has a centralized collateral pool. This allows for increased stability in the FTX ecosystem. When the markets are volatile, the collateral pool will increase in value. This helps to ensure that the system does not get bogged down by high transaction fees and that users can trade without issue. 

The last notable feature of the FTX Token is used for universal stablecoin settlement. This allows users to trade any cryptocurrency with any other cryptocurrency without having to convert their assets into a stablecoin first. This helps to save time and money. 

The FTX Token is an important part of the FTX ecosystem and provides many benefits to users. It is important to note that the FTX Token is not an investment and does not give users any ownership over the FTX platform. It is a utility token that is meant to be used. It serves as a way to reward loyal users and save on trading costs. For the FTX exchange, it works to increase stability and liquidity. In exchange for the benefits it offers users, it creates a marketing boost by being an ERC20 token. This is because it can be moved throughout the Ethereum network which gives it greater exposure.

How Does FTX Token Work?

The main way that the FTX Token works is by giving holders a discount on trading fees. Currently, the token gives token holders with at least $100.00 worth of FTT a 3.00% discount on trading fees. These rewards increase as more FTT is held in the trader’s account. The FTX Token rewards are based on a tiered system. Currently, there are 12 tiers total. The top tier is called “VIP 6” (the first 6 tiers are unnamed) and it requires a holding of $5,000,000.00 but users receive a 60.00% discount on trading fees. Of course, there are lower requirements for lower tiers, but it just goes to show how much the FTX Token can save a trader on their fees. 

Up to 0.02% discount on FTX OTC is also included as a benefit for this tiered system. OTC trading is a service that is used to buy and sell large amounts of cryptocurrency without affecting the price. This is done by using a more direct method. It is a great way to get around the slippage that can happen when trading large amounts at once. 0.02% might not seem like much, but for large trades, it can save a lot of money. 

The FTX Token also provides other benefits, such as a collateral pool. The way this works is that FTT holders can put their tokens into a pool and then earn interest on them. The interest rates depend on the amount of FTT that is in the pool. The more FTT that is in the pool, the higher the interest rate will be. This benefit is great for those who want to earn more from their tokens without having to do anything. 

Staking also provides additional bonuses. The difference between staking and holding is that users have to lock up their tokens for a set period of time. In return, they earn more rewards when using the platform. There are seven tiers for staking rewards. Maker Fee Rebates, a better chance of airdrops, and higher referall rate percentages are just some of the benefits that stakers can earn. 

The FTX Token also entitles holders to other benefits, like voting rights on the platform. For example, token holders can vote on which coins should be listed next. They can also vote to delist coins, though this is much less common. The FTX Token holder voting system ensures that the community has a say in how the platform develops. This works to ensure the user base gets what they want out of the platform, while also keeping things fair. 

Besides voting rights and fee discounts, the FTX Token also gives holders airdrops. These are free tokens that are given out to FTX Token holders regularly. The airdrops help to keep the community engaged and are a way for the platform to give back to its users. They also help to raise awareness of new projects and can be a great way to get started in the cryptocurrency world. You can think of this as both a loyalty reward for the platform’s users and advertising for the new crypto projects. 

The way the tokenomics of FTT works is through a buy and burn method. This helps to reduce the supply of FTT which, in turn, increases the price. The Exchange will repurchase and burn tokens equal to 33% of fees generated through their FTX markets, 10% of socialized gains, and 5% of the fees earned from other FTX platform uses. The company will buy FTT and burn the allocated amount based on the percentages above each week.

FTX Token Fun Facts

  • 18,995,661 FTT has already been burned
  • Over 30 different leveraged tokens are available
  • Designed by industry professionals for effective use cases
  • Market cap of 3,217,224,934 USD according to CoinMarketCap 

(Data as of 7/13/2022)

The Story of FTX Token (FTT)

The FTX Token (FTT) was created by FTX Exchange, a cryptocurrency derivatives exchange. The company behind the token is based in Hong Kong and was founded in 2019. The founders are Sam Bankman-Fried, who is also the CEO of Alameda Research, and Gary Wang. 

The goal of FTX Token is to provide a variety of benefits to those who use the FTX Exchange. The token is used to give holders discounts on trading fees, airdrops, and other benefits. The company behind the token plans to use it to help grow the FTX ecosystem. 

The token was launched through an Initial Exchange Offering (IEO) on their FTX platform. Since then, it has proven to be a popular token and a useful holding for FTX users. The token is ranked number 21 on CoinMarketCap and has the potential to grow even more in the future if the team behind it continues to execute its plans well. As more traditional finance traders start to move into the cryptocurrency world, the FTX Token (FTT) is positioned to be a top contender in the space. 

All in all, the FTX Token is a helpful tool for users of the FTX exchange. By having a native cryptocurrency, the FTX company can also help to increase the value of its platform. Through greater centralized stability, lower transaction fees, and increased exposure, the FTX Token is a great utility token that offers a lot of benefits for both the exchange and the holders.