FTX Review: The Fastest Moving Derivatives Exchange

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Coinmonks

7 min readJun 8, 2021

FTX is one of the most rapidly growing exchanges, swiftly making a reputation for itself by rapidly adding new services. It pioneered new products such as basket trades, prediction markets, and fractionalized stock trading. It is unfortunate Americans cannot take advantage of this exchange.

Alameda Research has invested in FTX (both entities founded by Sam Bankman-Fried). Alameda is a quantitative crypto trading business with a $100 million AUM that is a prominent market maker on FTX.

Alameda was one of the major liquidity providers and market makers in the industry within a year of its start, trading up to $1 billion per day. TUSD and USDC were also early liquidity partners.

Moreover, FTX created Serum(SRM), a decentralised exchange that is independent of the FTX ecosystem.

Disclaimer : Throughout this article I have used referral links. Most of these services gives you additional discounts if you use referral links.

FTX Products & Features

1. NFT Marketplace

The FTX marketplace appears to run on both the Ethereum blockchain and a network named Solana, which employs a proof-of-stake consensus mechanism and consumes substantially less power than Ethereum.

Non-fungible tokens (NFTs) are a sort of cryptocurrency that may provide verifiable ownership and scarcity of any sort of asset. NFTs have been widely utilised for digital art, music, and memes, among other sorts of material, to date.

Some of FTX’s NFTs are linked to physical objects and “redeemable” for their physical equivalents. An NFT linked to an image of three KAWS statuettes should result in three genuine KAWS statuettes; the same is true for an NFT linked to an FTX-branded condom. FTX levies a 5% fee to both the buyer and the seller on each transaction or trade on NFTs.

2. Futures

FTX offers over 100 futures pairings that may be traded using a stablecoin as collateral, such as USD or USDT.

Futures contracts are paid using stablecoins. That is, you will be putting up stablecoins as collateral. You don’t need a bank account to pay the futures when they expire this way. Instead, use a stable coin to make it easy to enter and exit a position. When you deposit stablecoins, they are converted into USD to cover your margin needs.

FTX also includes a structure of backstop liquidity providers that will step in if clawback is required.

Sign Up on FTX & get 5% Off on Your Trading Fees

3. Leveraged Tokens

Leveraged Tokens are a unique asset for cryptocurrency traders developed by FTX. These are ERC20 tokens with leveraged exposure to the trading pair of up to 3x. To begin trading leveraged coins, there is no margin need from the user’s FTX account balance. There are also exchange-traded funds (ETFs) that have leveraged exposure to a variety of existing and popular cryptocurrency assets.

Using FTX leveraged tokens can assist a trader control risk. Any transaction gains are immediately reinvested back into the underlying asset being traded by the derivatives exchange.

This implies that if your leveraged token investment is profitable, the tokens will automatically add 3x leveraged holdings to it. Conversely, if the position is negative, leveraged tokens will immediately lower risk.

4. MOVE Contracts

Move Contracts enable you to trade depending on the movement of the price of a certain cryptocurrency while only risking a small amount of money. Movement can occur in any direction.

They are futures contracts that expire based on the total amount of Bitcoin. It can be done on a daily, weekly, monthly, or quarterly basis. Weekly contracts do not have to match to the calendar week. The total volatility of the BTC during a certain time period is the major determinant. This feature draws a large number of users to the exchange.

5. Options

You may also trade Bitcoin options on FTX, which offer you the right but not the responsibility to purchase or sell the digital coin at a certain date and price.

You can use leverage to go long or short on options, just like you can with futures. When it expires, the contract will be settled for an amount equal to its expiry price in dollars.

6. Prediction Markets

They make it possible for users to trade in more conventional ways. It’s comparable to traditional betting. You may place a wager on any real-world occurrence. You will either win and the contract will settle at 100%, or you will lose and it will settle at 0%.

One well-known example is betting on who will win the forthcoming elections. Each candidate will be given a contract. The buy-in fee will be different for each contender and will be determined by their chances of winning. They have the option to long or short each contract.

Following the success of our presidential election prediction markets, we will strive to extend our prediction market service to include new events such as sports, e-sports, midterm elections, and more. This process is already in motion, with Super Bowl prediction markets live on the platform and more intriguing markets on the way.

7. Tokenized Stocks

Tokenized stocks are the most exciting product from FTX. Giving qualified traders the opportunity to trade a tokenized stock 24 hours a day, 7 days a week, 365 days a year is something that has never been done before in crypto.

These are backed up 1:1 with shares held at a registered brokerage, entitling the trader to all of the economic benefits of owning the stock: dividends, stock splits, and so on.

In addition to stock spot trading, we have implemented futures trading capability for these products, enabling customers to trade with up to 101x leverage in the same manner they would with any other market on FTX; same collateral pool, same margin requirements, same everything.

8. Spot Trading

Similarly to a spot trading exchange, traditional traders may acquire a variety of popular digital assets on the market. FTX presently supports over 100 trading pairings that may be exchanged for USD or USDT, including BTC, ETH, LINK, FTT, PAXG, ADA and XRP.

9. OTC Desk

Assume you are purchasing a big number of assets. In such situation, you may be allowed to purchase ‘over the counter,’ or ‘OTC.’ Professional traders typically pick this option since the order book may be too thin to complete the deal. Another argument may be that it will have an impact on the price of that coin.

Most exchanges provide this option, however FTX charges no fees other than the spread for it. You have the option of requesting OTC quotations. It offers discounted prices. You may learn more about it by visiting the FTX OTC Quote webpage.

Sign Up on FTX & get 5% Off on Your Trading Fees

How to get started with FTX

To open an account in FTX, go to the top right corner and click on the Register option. In the profile settings, you may safeguard your account by using two-factor authentication.

Following that, you must complete your KYC. You can now deposit funds to trade; however, your account has a total withdrawal restriction of $1,000 until KYC verification is completed.

https://help.ftx.com/hc/en-us/articles/360027668192-Individual-Account-KYC

FTX Trading Fees

https://help.ftx.com/hc/en-us/articles/360024479432-Fees

FTT Token

FTT is the FTX Exchange’s native token. It provides some benefits to users, such as lower FTX trading fees. It may be traded on the exchange’s Spot/Futures market. It can, for example, be exchanged on Binance.

Maker refunds of up to 0.0030% are available to FTT stakeholders, and it costs just 25 FTT to have no maker fees.

FTX US Review

FTX.US offers several account tiers, each with its own set of criteria. A client’s account must be verified if they wish to expand their limits or gain access to other financing options. Individual and corporate accounts have various needs, and each tier need more information.

https://help.ftx.us/hc/en-us/articles/360048666713-Account-Tiers-and-Limits

FTX US Trading Fees

https://help.ftx.us/hc/en-us/articles/360043579273-Fees

Conclusion

FTX is continually expanding, with more creative products and services being added to the platform. The exchange has already made a name for itself in the Cryptocurrency derivatives market.

The unmatched assortment of crypto financial products accessible at FTX distinguishes it in the industry. If you have a solid grasp of the complexities of trading derivatives, FTX can provide you with a plethora of chances.

Sign Up on FTX & get 5% Off on Your Trading Fees
Disclaimer : Throughout this article I have used referral links. Most of these services gives you additional discounts if you use referral links.

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Originally published at https://hackernoon.com on June 8, 2021.