Yes – it’s another trading platform. No – it’s not just any trading platform.

A trading platform built by traders – for traders. FTX offers new age products and services that include innovative derivatives, options, leverage and, of course, volatility products. The company aims to develop a base that is powerful enough for pro-trading companies and with an intuitive interface for newbies.

story

The FTX team comes from leading Wall Street quant fund and technology companies: Jane Street, Optiver, Susquehanna, Facebook and Google. The traditional secondary market is the bread and butter company. The management has a background in equity derivatives trading; They understand both how derivatives are traditionally designed and which derivatives the market is in demand.

Sam Banker Fried (CEO) was once a Trader at Jane Street Capital, a company that uses quantitative strategies to trade stocks, bonds and ETF markets. He founded FTX in May 2019 with former Google software engineer Gary Wang. theyou wanted Build in Platform with an interface and functionality that is suitable for both professionals and new traders.

After commencing operations in May 2019, FTX caught the attention of the industry’s whale Binance, who bought the company’s shares in December 2019 and took a long position on FTT – the platform token.

Just under a month ago, FTX bought back its shares from Binance in July 2021, which ended their investment relationship.

I think there are some differences between the way we do business. We recently bought back shares in Binance to buy from our cap table, ”said Bankman-Fried. “I think it just makes sense given the role our companies play in this area. It can also give us more flexibility in the future. “

The two-year-old exchange raised a whopping $ 900,000,000 last month from investors like Sequoia, Paradigm, Softbank, Paul Tudor Jones and legendary NFL quarterback Tom Brady in its final round of funding that made it the largest ever crypto Exchange valued FTX at a cool $ 18 billion.

The initial buying and selling prices are not disclosed. But FTX was worth just $ 1.2 billion just under a year ago and is now worth $ 18 billion – an increase of 1,400%.

FTX has grown into a platform with more than 1,000,000 users and an average trading volume of USD 10 billion per day.

What’s new

There is currently no short or leveraged position available on many spot exchanges. Traders need to trade on margin or futures exchanges such as Bitfinex, Okex and Bitmex. This can be more complicated for retailers as they have to deal with funding rates and borrowing costs and constantly monitor their positions to avoid margin calls. Additionally, traders are also at risk of losing significant funds, especially given the high profile liquidity shortfalls we’ve seen on futures exchanges lately.

Leveraged tokens allow traders to take short or leveraged positions without having to trade on margin or futures exchanges. Suppose a trader wants to short Bitcoin 3x. You can simply buy a 3x Short Bitcoin Leveraged Token on FTX. This process is as simple as buying BTC or ETH on a spot exchange. FTX offers 3x, -1x and -3x leveraged tokens for BTC, ETH, XRP, EOS, USDT, BNB, TRX, LEO and BCH and would like to add more in the future. With these tokens, traders can use leveraged tokens more capital-efficiently, so that none of their assets have to be stored in a margin wallet.

Leveraged tokens are ERC20, which means that they can also be listed on other spot exchanges. This enables spot exchanges to offer their clients inverse price action and leverage positions without having to implement their own margin trading and liquidation engine.

Prevent reclaims

Current futures exchanges often have large reclaims that lead to losses in the millions due to poorly designed risk management systems. FTX significantly reduces the likelihood of reclaims by using a three-stage liquidation model.

The exchange initially carefully closes positions with price-limited liquidation orders in the market.

FTX has a unique backstop liquidity provider program that steps in to fund accounts in the event of bankruptcy.

The platform uses the backstop liquidity fund to prevent customer loss.

About the FTX token (FTT)

The local “utility” token of the FTX blockchain is the FTT. It can be used as collateral for trading on the platform and pays out a share of the profit to the insurance fund that supports futures trading. Inventories of $ 100 or more offer discounts on trading fees, depending on the amount held

In March 2020, FTX sold up to 15 million FTT tokens, which give their holders a stake in the company. Tokens originally sold for $ 2.00 per token and are currently trading at around $ 32, which is half the ATH. There are no voting rights associated with the tokens. There are a total of 350,000,000 FTT tokens and no more will be created.

summary

FTX expanded its offering over the past year to include trading in tokenized stocks, contracts on pre-IPO stocks, and even forecast markets that allow traders to speculate on events like the outcome of the US election – around 200 million contracts were traded acted at this event. May 2021, Sam Bankman-Fried tweeted that FTX will offer binary options that will be paid out if Brazilian President Jair Bolsonaro is re-elected in 2022.

It plans to use the raised funds to develop other services, including the FTX Pay payment processor, a service that allows users to store crypto assets known as FTX Liquidity and a NFT Companies.

“As crypto becomes ubiquitous, FTX has the opportunity to build a next-generation financial services brand that includes exchanges, payments and many other future categories,” said Nick Shalek, general partner at Ribbit Capital.

As COO of FTX US, Sina Nader would say:

“I think three things are important with crypto and that is trust, compliance, and execution.”

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