In May, FTX chief FTX stated that the exchange would spend billions of dollars to acquire stakes in other companies and expand its product lineup.
An important part of this strategy is the FTX Token (FTT). Here we explain the benefits for holders and the token’s role in the exchange’s ecosystem. At the end of the article — instructions on sending FTT into staking.
About FTX
FTX has operated since 2019 and ranks second in CoinMarketCap’s derivatives-exchanges by trading volume.
The platform supports spot and futures markets, margin trading, options and MOVE contracts. The FTX ecosystem includes an OTC platform, an NFT marketplace and Quant Zone — a venue where traders share their strategies.
FTX’s chief is Sam Bankman-Fried, a thirty-year-old billionaire and founder of Alameda Research. Previously he worked at the financial firm Jane Street Capital, and also held a role as Director of Development at the Center for Effective Altruism.
In July 2021, FTX raised $900m in a Series B round, later expanded to $1b. By January 2022 the exchange raised $400m at a $32b valuation.
In early 2022 the company announced the creation of FTX Europe, FTX Australia and FTX Japan divisions. The exchange also has a venture arm — FTX Ventures.
What is FTT
FTT is the exchange’s utility token, initially issued on the Ethereum blockchain. Later FTX migrated it to Solana and BNB Chain as wrapped token.
According to CoinMarketCap data, FTT is available on 60 exchanges in 90 trading pairs. As of July 2022, about 172 million FTT are in circulation out of a total supply of 331 million FTT.
The exchange spends a third of user-commission revenue weekly on buybacks and burning a portion of the tokens. As of publication the platform has removed from circulation more than 20 million FTT.
Bonuses for FTT Holders
Users who store tokens on the exchange’s wallets receive discounts of up to 60% on FTX trading fees. The amount depends on the dollar equivalent of FTT held on the client’s account:
- from $100 to $500,000 — from 3% to 35%;
- from $1 million — 40% + fourth level of commissions on futures and spot markets;
- from $2.5 million — 50% + level VIP1;
- from $5 million — 60% + level VIP-2.
In addition, holders of FTT receive a discount of up to 0.02% on the OTC desk, as well as access to weekly airdrops of tokens from the Serum (SRM) ecosystem — a DeFi protocol for decentralized exchanges on the Solana blockchain.
Participation conditions for distributions are from 500 FTT and meeting second-level KYC. For every 500 FTT the exchange awards 3 SRM. Airdrops will run until 2027.
Benefits of staking
FTX offers staking users up to 40% referrals rebates, additional voting rights on FTX and forced maker fees.
Also the exchange provides users up to six additional tickets for initial exchange offerings (IEO):
- from 150 FTT — one ticket;
- from 290 FTT — two tickets;
- from 420 FTT — three tickets;
- from 540 FTT — four tickets;
- from 650 FTT — five tickets;
- from 750 FTT — six tickets.
As of publication, FTX conducted 14 IEOs, including Maps.me, Star Atlas, Mercurial Finance and Solrise.
Note that users do not receive FTT for staking. On the contrary, FTX reduces supply on the market by burning tokens.
How to send tokens into staking
FTT staking is available to FTX users with KYC first level. To lock the tokens:
- transfer them to the platform or buy FTT on one of the spot markets of FTX;
- go to the FTT page and scroll to the «Staking FTT» section;
- click the «DEPOSIT INTO STAKING» button;
- enter the number of tokens and confirm the transfer.
FTX regularly updates the staking instructions. The latest version of the document is in the knowledge base of the exchange.
Withdrawal of the token is performed on the same page. To do this, click the «WITHDRAW FROM STAKING» button and specify the amount of FTT.
The procedure takes 14 days. When calculating bonuses the exchange does not include tokens that the user has planned to withdraw.
Assets can be withdrawn instantly, but you will have to pay a fee of about 10%.
ok if you ignore the warnings about the unstaking period and really want to unstake on FTX immediately—
now you can, for a large fee
— SBF (@SBF_FTX) March 10, 2021
The closer the planned withdrawal is, the lower the fee. For example, on the first day after the request it is about 10%, and after a week about 5%.
Conclusions
FTX has developed a comprehensive rewards system for holders of its internal token. In addition to the usual discounts on trading fees, users receive a discount on the OTC desk, access to airdrops, higher referral rebates and other bonuses.
The benefits for FTT holders directly depend on the development of the exchange’s ecosystem. FTX plans to expand the product lineup, including through acquiring stakes in other companies, so in the near future we may see new use cases for this token.
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