FTX is a cryptocurrency exchange that offers derivatives, options, volatility products, and leveraged tokens. It stands out from other cryptocurrency exchanges from its marketplaces, functionality, design, and trading fees.
Let’s explore how the exchange operates in the following FTX review.
FTX Exchange Guide: How it Works
FTX was launched in May 2019 by Sam Bankman-Fried, the co-founder and CEO of Almeda Research, and CTO & Co-Founder Gary Wang. Its core team includes Head of Engineering Nishad Singh, General Counsel Dan Friedberg, and Chief of Staff Jen Chan. It built its brand by offering cryptocurrency derivatives trading, as well as a wide variety of trading products like leveraged tokens, options, and advanced trading. It also has a few standout features like a “quant zone”, a volume monitor, exchange statistics reflected in leaderboards and competitions, FTX Pay, and even NFTs.
The FTX native token, FTT, allows holders to earn rewards, exercise voting rights, and stake. The exchange has markets for popular cryptocurrencies like BTC, ETH, BNB, and a wide variety of fiat currencies like USD, EUR, GBP, AUD, HKD, SGD, TRY, CAD, CHF, and BRL.
FTX Company Info
FTX.com is a cryptocurrency trading exchange incorporated in Antigua and Barbuda, with a primary HQ in Hong Kong.
FTX is supported across the UK, Australia, and New Zealand. It is banned only in Quebec (Canada), Cuba, Crimea, Sevastopol, Iran, Syria, North Korea, Sudan, Singapore, and the United States.
United States customers must use the U.S. version– FTX.US.
Is FTX Exchange Safe?
FTX uses multiple bank-level security features that ensure the safety of the personal information and security of funds stored on the exchange across all of its users. There have been no reported hacks or security incidents thus far.
FTX Products and Features
The FTX exchange aims to make rather complicated trading features like derivatives a little bit more simple.
The key features of FTX include:
- Fiat on-ramps through bank or credit card.
- 50x, 100x and 101x leverage, all of which must be selected in the setting page.
- Easy conversions and stablecoin settlements with a single margin wallet.
- Institutional-grade services– FTX incorporates a high level of liquidity, unlimited withdrawals, liquidation funds, and an OTC desk.
- Extensive customer support and plenty of resources to navigate the platform. Chat groups in multiple languages are also available.
FTX also offers:
Futures: agreement to buy or sell an asset at a predefined price. FTX supports perpetual features on large-cap, mid-cap, and small-cap coins.
FTX Leveraged Tokens: tokens that provide users with leveraged exposure to the cryptocurrency market, without actually managing a leveraged position. The platform sets 10x leverage as the default for users interested in leverage trading and allows it to extend up to 101x. These are divided into three different categories.
- For example, 1x tokens are known as Hedge, and if ETH goes up by x%, ETHHEDGE goes down by the same %.
- 0.5x Long is known as HALF, where if ETH goes up by 2x%, it goes up by x%.
- 3x tokens are known as BEAR or BULL. If ETH perpetual features go up by x%, then ETHBEAR goes down by 3x% while ETHBULL goes up by 3x%.
Options: The right to sell an underlying asset at a predefined date and price.
Move Contracts: trade based on crypto price movement by only risking a small amount.
Spot Markets: The ability to purchase and trade cryptocurrencies through traditional methods using market-matched orders.
Prediction Markets: Trade through traditional methods, but trading on the prediction of an event’s outcome. For example, you could win and the contract would settle at 100% or lose, and the value drops to 0%.
How to Create an FTX Account
To create an FTX account, simply register on the home page and go through the typical KYC process. The amount of information required will vary on the amount of money you plan to withdraw, deposit, and trade.
The FFT Token
FTT is the exchange’s native cryptocurrency; holders enjoy perks like reduced trading fees, gains from the insurance fund, fees generated by buying and burning activities on a weekly basis and can use FTT as collateral for futures trading.
The FTX Trading Fees
FTX has a tiered fee structure for all futures and spot markets.
|
Tier |
30 Day Volume (USD) |
Maker Fees |
Taker Fees |
|
1 |
|
0.020% |
0.070% |
|
2 |
|
0.015% |
0.060% |
|
3 |
|
0.010% |
0.055% |
|
4 |
|
0.005% |
0.050% |
|
5 |
|
0.000% |
0.045% |
|
6 |
|
0.000% |
0.040% |
A funding fee is also charged when it comes to perpetual contracts; it isn’t taken by the exchange but is given to the opposing contract holders.
FTX’s liquidation engine is built in-house from scratch, it sends reasonable volume-limited liquidation warnings to gradually close positions that drop below a certain maintenance margin. This in turn prevents any possibilities of clawbacks, even though they are still possible, specifically in high market unpredictability.
Final Thoughts: Is FTX Worth Using?
FTX is gradually niching itself as the bridge between advanced trading features and a beginner population. However, it isn’t as beginner-friendly as one would assume– these features are still incredibly complicated, and users should have an advanced understanding of how to use them. Leveraged trading and options, for example, and incredibly risky– which makes an already volatile asset class like cryptocurrency even riskier.
The FTT token is also a unique feature that shouldn’t be overlooked– consider the growth BNB saw with the Binance ecosystem. The exchange lists many DeFi tokens, but its U.S. version is still a bit limited for those that want exposure to the more obscure tokens of the DeFi ecosystem.
