The huge potential of the derivatives market is beyond doubt. Mark Lamb, CEO of CoinFLEX, recently predicted that by the end of 2020, the size of the crypto-derivatives market will reach 20 times that of the underlying spot market. In 2019, more and more spot exchanges began to get involved in derivatives trading, such as FCoin's launch of FMEX and KuCoin's launch of KuMEX. At the same time, the new exchanges continue to join the battle with new gameplay and new models. Today we are talking about the recently hot FTX, a derivatives exchange that was just established in April this year.
Backed by first-class market makers, FTX has entered the second line in March.
Let's not talk about the specific trading business, open the FTX official website, we saw an interesting tag: trading volume. Different from the general exchange, only the trading volume on the platform is counted. The trading volume measures the trading volume of the major friends, and adjusts the trading volume to display the adjusted trading volume of more than 10 million US dollars. In this list, we see that FTX's trading volume reached $69.17 million at 1600 pm on July 31, with derivatives trading at $59.28 million, ranking seventh in exchanges offering derivatives trading. Compared with the first BitMEX 25.57 billion US dollars trading volume, the FTX's volume is still far from the front line, but it is only on the line for more than three months.
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Some people may ask, the exchange itself to get a exchange statistics, will you be self-defeating? Perhaps we can explore the answer through the team Alameda Research behind FTX. According to official website information, Alameda currently manages more than $100 million in digital assets, with daily trading volume of $6 billion to $1 billion, providing liquidity and market-making services to Top 35 exchanges worldwide. At the beginning of July, the over-selling of 7500 BTCs in the currency can be digested in half an hour, and Alameda Research is the hero behind it.
In the project white paper, Alameda mentioned his original intention to do FTX:
“In the past year and a half, as one of the world's largest market makers of digital currency derivatives trading, we found many existing head contract exchanges during the transaction. There are many problems. We have been to these exchanges. There are countless white papers, countless feedbacks, but the problems still exist and there is no improvement. So, instead of expecting the existing head exchanges to adopt our feedback and improve their products and services, it’s better to build one that directly solves these problems. Based on this idea, a digital currency derivatives trading platform FTX, which is completely different from the existing contract exchanges on the market, was born."
Index contract + stable currency settlement, FTX launches contract new gameplay
The team looks very powerful and the liquidity is guaranteed. So what about the FTX products? Like the general exchange, FTX also offers contract trading for mainstream currencies. But looking at the list, we also saw the figure of USDT, which is a bit of an accident. With a little thought, USDT faces various problems of manipulation or thunderstorms all day long, and volatility can indeed meet the needs of contract transactions. In addition, FTX brings some very different things to users.
The first is the index contract. FTX offers three index contracts , including ALT , which is based on mainstream altcoin and a digital currency index with head liquidity. The market value is in the front middle section of the altcoin (such as ADA, NEO, ONT, DOGE, etc. 25). The target MID and the SHIT with the market capitalization of 150 altcoins . In fact, the naming of index contracts is quite consistent with the actual content. The classification of head mainstream currency, mid-range mainstream currency, and altcoin can basically cover the needs of general investors. Users can also avoid the risk of large fluctuations in a single currency in a certain type of cryptocurrency when trading, and achieve a more stable and worry-free investment. At a time when the current index track is receiving more and more attention, FTX seems to be the first exchange to launch an index contract transaction, which has taken the lead in the exploration of the index's commercial value.
Another feature is that the stable currency is settled . In other exchanges, we must hold a cryptocurrency in order to participate in the contract transaction of the currency. For example, we must hold BTC to open a position on OKEX or BitMEX. On the FTX, users can trade all kinds of contracts with a guaranteed money package, which is obviously superior to the user experience. It is worth mentioning that FTX's stable currency partners show higher-performed or regulated stable currencies such as TUSD, USDC and PAX, without USDT. The USDT contract is actually giving users the opportunity to short.
Platform coins have new uses, but there are also new questions
FTX also has its own platform currency FTT, a total of 350 million. In the context of repurchase and destruction that has become the standard for platform currency, FTT also adopts this mechanism. Each week, FTX will use the FTX contract fee income of 33% (main repurchase funds), 10% of the net increase in risk margin, and 5% of the FTX platform's other fee income to repurchase the FTT and destroy it until the FTT reaches the total Half of the circulation.
In addition to repurchase and destruction, FTX has also given FTT a new use, namely as a margin for use on the FTX platform , which greatly enhances the use of platform coins. In addition, FTX also adopts the current popular ladder rate, and the more positions FTT, the higher the transaction fee discount.
The FTT has been launched on July 29, with an opening price of US$1. Currently, it is temporarily reported at US$1.71. According to the total amount of 350 million, the market value has reached US$598.5 million. In contrast, OKEx's daily trading volume is 10-20 times that of FTX, and OKB's total market capitalization is only 824 million US dollars. In terms of volume, the current market value may be overestimated. In the primary market before the official launch, even if FTX provides a good discount, many investment institutions still feel that the valuation is too high. The head of an overseas fund said to Babbitt: "Although the team is reliable, the products are good, the discount is also good, but it is still too expensive."
After the user subscribes to the FTT, it needs to be linearly unlocked for a period of time. Investors who purchase Round 1 need to wait 3 months to complete the settlement, Round 2 1 and a half months, Round 3 1 month. In fact, half of the 350 million FTTs belong to the Company Token and must go through a long unlocking period – three years. In the non-Company Token section, 60% of them were not sold, and the 60% of the teams held 20%. According to the information published by the FTX, we can see the estimated number of sales per round, but we can't see how many tokens are actually sold in each round. This means that we don't know how many tokens are in the hands of the team. Ordinary investors may not care, but for organizations, the black box of information is enough to shake their willingness to invest.
Moreover, according to the rules, the unlocking time is only four months, one and a half months, three months and three years. However, Babbitt learned from an overseas organization that understands the project that in actual operation, the unlocking period for investors to purchase FTT has not appeared in the official terms of FTT for 6 months, 1 year and 2 years. The FTT clauses are not used to comply, so what is the significance of the public?
Finally, what's interesting is that by entering the FTX official website, we can see a very well-optimized Chinese interface, and FTX has also found a partner for community building in China. Li Muyang, the founder of the AKG community responsible for FTX China's community building, believes that FTX is “a trader suitable for traders.” To the benefit of this, this is FTX's emphasis on the Chinese market; it is bad to think, in fact, this is the sight of China's “chives”. ". According to Babbitt, FTX is more targeted at B-end users in many countries, while FTX in China has focused on C-end. In general, from the feedback of products and user experience, FTX can indeed be said to be an excellent exchange. However, the contract transaction is highly risky, and the C-side “chives” must not be blindly confident, especially in front of the B-side “sickle”.