FTX Exchange: Advanced Crypto Trading for the Global Market

6 min readNov 3, 2021

FTX is a cutting-edge crypto derivatives exchange with a robust and expanding array of products for seasoned crypto traders.

Summary

FTX was founded in 2019 by seasoned crypto traders looking for more advanced trading capabilities than mainstream crypto exchanges could provide.

To suit its knowledgeable user base, the FTX Exchange has evolved into a leading crypto exchange with unique offers such as derivatives, options, margin trading, volatility products, leveraged tokens, tokenized equities, and advanced trading tools.

Many of FTX’s products are unavailable in regulated jurisdictions such as the United States, despite the fact that the company is based in Hong Kong.

Origins of FTX Exchange

The FTX Exchange was founded in May 2019 with the goal of providing a competitive alternative in the crypto world for innovative trading methods, as well as enough liquidity and security.

Sam Bankman Fried and Gary Wang co-founded FTX. Both founders are also executive directors at Alameda Research, a renowned cryptocurrency token liquidity service. As a result of its strategic alliance with Alameda Research, FTX has reaped significant benefits and received significant liquidity since its inception.

The FTX crypto platform claims to have been created “by traders for traders,” and while it is complex enough to handle professional trading firms, it aims to be simple enough for ordinary trading. FTX is based in Hong Kong, and many of its most popular trading services are only available in a few countries.

As a result, certain FTX Exchange services are unavailable in the United States and other restricted territories.

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FTX Exchange’s Product Offerings

FTX provides a comprehensive range of basic trading techniques, as well as a number of unique goods and services, such as derivatives like futures and options and margin trading.

Some of FTX’s proprietary offerings include:

Leveraged Tokens: Traders can use leveraged tokens to place leveraged trades without having to trade on margin. Traders can gain more market exposure by purchasing leveraged tokens with USD rather than needing to supervise their margin or collateral. Tokens with built-in leverage are known as leveraged tokens.

BULL tokens monitor an underlying asset with 3x returns, while BEAR tokens track an underlying asset with -3x returns.

MOVE Contracts: MOVE Contracts keep track of how much an underlying asset moves — up or down — over a given period of time. In other words, rather than trading in a certain direction, the user bets on the volatility of an underlying asset. MOVE Contracts have daily, weekly, and quarterly expiration dates.

MOVE Contracts are similar to futures contracts in that they expire based on the amount an asset’s price changed rather than the asset’s price.

MOVE Contracts are for traders who believe an asset will see significant price movement but aren’t sure which way it will go. Long MOVE Contracts, which win if an asset has a lot of volatility, and short MOVE Contracts, which gain if an asset is generally stable, are available to traders.

Quant Zone: Quant Zone is a tool for creating programmatic rules that may be used to conduct automated trading strategies on the FTX Exchange. Quant Zone rules can be created by traders and shared with other users. Following “if, then” logic, Quant Zone rules require a trigger condition and an antecedent reaction.

They are made up of arbitrary formulas that include FTX market data, personal account information, and mathematical functions and range in complexity from simple to complicated. For example, you may write a rule that says “get 3x long BTC if Bitcoin falls below $47,000.”

Tokenized Stocks: Spot tokens backed by shares of a particular stock are known as tokenized equities. FTX is able to offer tokenized equities to users on its platform because of a strategic agreement with CM-Equity. Tokenized stocks bring the 24-hour availability and permissionless features of cryptocurrency to regular stock exchanges.

Users can also use their FTT voting power to say which tokenized equities they think should be added in the future.

FTX’s platform includes a variety of exclusive products in addition to its strong spectrum of financial instruments. Prediction markets are one such unique product. FTX offers a number of prediction markets that allow users to wager on the outcomes of real-world events using futures contracts that expire based on real-world data.

Special indexes for high-cap, mid-cap, and low-cap cryptocurrencies are available on FTX Exchange. Users can acquire exposure to baskets of altcoins based on their weighted average prices using these indexes, without having to worry about buying individual coins.

While prediction markets and asset indexes are not new to the crypto world, FTX Exchange is one of the first places to find them all in one place, alongside a wider range of products and instruments.

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How FTT Tokens Power FTX Exchange

The FTX Exchange is powered by FTT, the FTX Exchange’s own native exchange token, which plays an important role in the FTX ecosystem. The ERC-20 tokenization standard is used to create FTT tokens, which have a maximum supply of 339 million. FTT is not available in the United States, as are other FTX services.

FTX has devised techniques to make FTT more useful to FTX Exchange users. FTT token holders, for example, receive fee refunds on the FTX platform based on the amount of FTT they possess, with trading fee savings ranging from 3% to 60%. FTT holders additionally get a 0.02 percent discount on FTX OTC prices, proportional to their existing FTT holdings.

Furthermore, FTX imposes an anti-inflation mechanism on the FTT token supply by burning a portion of it on a regular basis. FTX buys and burns FTT tokens equal to 33% of fees collected on FTX exchanges, 10% of net additions to the insurance fund, and 5% of fees generated from other portions of the FTX platform to put deflationary pressure on the FTT supply.

Users of the FTX Exchange can also stake FTT tokens to obtain larger referral bonuses, maker fee reimbursements, bonus votes in community governance (in addition to ordinary votes based on FTT owned and trading volume), waived blockchain fees for specific withdrawals, and additional airdrop goodies.

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FTX Exchange: Charitable Projects and Future Outlook

Since its start, FTX has made philanthropic donations a part of its business model. The FTX Foundation is in charge of ensuring that 1% of the platform’s net fees are contributed to charities. Since the start of 2020, the exchange, its affiliates, and employees have given more than $10 million.

By exercising the voting power of their FTT tokens, users may have a significant voice in how FTX’s contributed money is directed.

FTX is a cutting-edge exchange that is owned and operated by crypto traders with a track record of success. FTX has gained a sophisticated user base because of its innovative trading goods and services — many of which are unavailable anywhere else — as a crypto derivatives exchange that offers traders superior tools and techniques. FTX’s solutions aren’t designed for beginners or intermediate users, but they more than meet the needs of their target audience of experienced users.

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