FTX (FTT)

From CryptoWiki

FTX is a Cryptocurrency Derivatives Exchange

Alameda Research is a trading desk, it has close ties with FTX (and the same owner) and its interconnectedness is up for discussion (16-3-2021).

Basics

"FTX is owned by FTX Trading LTD, a company incorporated in Antigua and Barbuda. FTX was incubated by Alameda Research, a cryptocurrency liquidity provider. FTX’s leveraged tokens aim to provide a clean, automated way for users to get leverage. FTT is the FTX ecosystem utility token. Holders of FTT reportedly receive benefits such as:

  • Weekly buying and burning of fees
  • Lower FTX trading fees
  • OTC rebates
  • Collateral for futures trading
  • Socialized gains from the insurance fund"

"FTX is a cryptocurrency derivatives exchange launched in April, 2019 that offers futures, leveraged tokens and over-the-counter (OTC) trading. It is backed by Alameda Research, a trading firm accounting for between $600 million and $1 billion of volume a day or roughly 5% of global volume.

FTX was designed to prevent clawbacks using a three-tiered liquidation model that closes positions with rate-limited orders and leverages an insurance fund to prevent customer losses. Rather than fracturing liquidity across various tokens, collateral is shared in one universal stablecoin wallet to mimic the traditional futures market. FTX also allows traders to take leveraged or short positions without trading on margin or futures with their Leveraged Tokens that mimic the experience of trading on spot markets but allow 3x, -1x or -3x on various tokens. The FTX OTC desk is powered by Alameda and trades around $30 million per day with no fees."

History

  • From The Generalist (8-8-2021):

"Alameda is a crypto investment firm. It was founded by Sam Bankman-Fried (SBF), Gary Wang, and Nishad Singh to capitalize on the arbitrage opportunity presented in the Asian markets in late 2017. It has grown in the intervening years, becoming one of the most influential allocators in the ecosystem, investing directly in protocols as well as private companies. Several sources confirmed that Alameda may be the single largest investor in the crypto ecosystem, trading billions in assets a day. Alameda was FTX's primary market maker in its early days, providing liquidity. The firm makes up a much smaller percentage of volume today."

Audits & Exploits

Bugs/Exploits

Governance

Admin Key

DAO

Treasury

Token

Launch

Token allocation

Utility

"33% of all fees generated from the exchange, 10% of net additions to the insurance fund, and 5% of fees from other uses of the platform will be used for repurchase and subsequently burned until half of the total supply is destroyed."

  • From The Generalist (8-8-2021):

"Much like Binance’s BNB, FTT grants discounts on fees, along with other benefits. If you choose to stake FTT, perks include enhanced voting power, bonus NFTs, airdropped rewards, and further rebates. FTT can be used towards an account’s collateral requirements, too, something we’ll unpack in a moment. To maintain scarcity and create pricing pressure, FTX “buys and burns” FTT."

Token Details

"FTT — FTX Token

FTT will get socialized gains from the insurance fund on FTX.

FTX will buy and burn FTT equal to 33% of all fees generated on FTX markets.

FTT holders will get a fee discount and tighter OTC spreads.

FTT will be usable as collateral on FTX."

"FTT is the FTX ecosystem utility token.  Holders of FTT receive numerous benefits, including:

  1. Weekly buying and burning of fees
  2. Lower FTX trading fees
  3. Collateral for futures trading
  4. Socialized gains from the insurance fund"

Stablecoin

Coin Distribution

Tech

  • Whitepaper can be found [insert here].
  • Code can be viewed [insert here].
  • Built on: Solana (27-7-2020)
  • Programming language used:

Transaction Details

How it works

Fees

Upgrades

Staking

Different Implementations

Interoperability

Other Details

Oracle Method

Privacy Method

Compliance

Their Other Projects

  • The exchange offers (8-8-2021) the following products:

Tokenized stocks, Leveraged tokens, Volatility tokens, a prediction market and a fiat market.

Blockfolio (changed name into FTX as well)

  • Changed name into FTX (like the FTX father company). No longer Blockfolio (28-7-2021).

"FTX has acquired popular crypto price tracking app Blockfolio for $150 million in one of the largest acquisition deals in the digital asset space this year."

DEX

"FTX is building a DEX, Serum, on the Solana blockchain with the help of partners like Kyber Network and Multicoin Capital. Serum is cross-chain comptaible, giving it access to liquidity on DeFi dApps on Ethereum. The DEX will run on a central limit orderbook, but will still operate in a trustless manner."

NFT Marketplace

  • Has launched a new NFT marketplace (3-6-2021). Seems to only have really launched now (6-9-2021).

Roadmap

  • Can be found [Insert link here].

Usage

  • From The Generalist (8-8-2021):

"FTX grew daily trading volume from $50 million to $150 million in less than two weeks. It jumped to $300 million two weeks after that.

After its most recent fundraising round, FTX noted it was reducing the available leverage on the platform to 20x. As part of the announcement, the company revealed that leveraged trading makes up a relatively small portion of volume on the platform. Per SBF, the average investment on margin was 2x at the time of the update.

Reviewing data from March of this year, Turkey is actually FTX’s largest market from a userbase perspective, with more than 20% coming from the country. Others in the top ten including Korea, Gibraltar, Australia, China, and Japan.

These shares change when analyzing on a volume basis. Most volume comes from institutions, which FTX doesn’t nationalize. Beyond that though, most trading comes from Taiwan, followed by China, and Hong Kong. This breakdown indicates that FTX’s power base is really in Asia, with Singapore and Korea also included.

Finally, looking at revenue by country, we get yet another view. Though there are fewer Korean than Turkish users, for example, they are the biggest revenue contributors. Switzerland, Australia, Gibraltar, and Canada round out the top five. It is perhaps telling that the United States is not included in this analysis.

We can see that FTX’s userbase benefits from some serious whales. More than 25% of total volume comes from a grouping that moves more than $30 billion per month. More than 50% comes from a segment that moves more than $3 billion. This is a market designed for those with considerable appetites. "

Projects that use or built on it

Competition

Pros and Cons

Pros

Cons

Team, Funding, Partners

Team

  • Sam Bankman-Fried; CEO and Founder "Before founding Alameda and then FTX, Sam was a trader on Jane Street Capital’s international ETF desk. He traded a variety of ETFs, futures, currencies, and equities, and designed their automated OTC trading system.  He graduated from MIT with a degree in physics."
  • Gary Wang; CTO and Founder "Gary was a software engineer at Google prior to founding Alameda and FTX with Sam.  There, he built systems to aggregate prices across millions of flights, decreasing latency and memory usage by over 50%.  He graduated from MIT with a degree in Mathematics with Computer Science."
  • Sergei Chan
  • From their About Us (20-4-2020):

"FTX is owned by FTX Trading LTD, a company incorporated in Antigua and Barbuda.

FTX was incubated by Alameda Research Ltd., a top cryptocurrency liquidity provider.  FTX has had industry-leading orderbooks from day one."

Funding

"FTX was founded with the goal of donating to the world’s most effective charities.  FTX, its affiliates, and its employees have donated over $10m to help save lives, prevent suffering, and ensure a brighter future."

"Binance backs Band, FTX (aka SBF Alameda, the new sushi controller), and Serum (via 3commas Cap)."

Update (25-7-2021): SBF has bought back the Binance shares in FTX, presumably due to regulatory issues around Binance heating up.

"Tom Brady and his wife, Gisele Bündchen, will each be taking an equity stake in FTX Trading Ltd., the company behind Sam Bankman-Fried’s FTX.COM and FTX.US.

The couple will receive crypto as part of a deal that makes Brady an exchange ambassador and Bündchen FTX’s environmental & social initiatives adviser, a press release Tuesday said. The specific financial terms of the long-term partnership with Bankman-Fried’s exchange company weren’t disclosed. FTX subsidiary Blockfolio is also involved in the package."

"FTX has raised $900 million from over 60 investors, bringing its valuation to $18 billion. Investors including Sequoia Capital, Paradigm and Coinbase Ventures. More than 60 investors participated in its Series B fundraise—the largest ever for a crypto exchange. Revenues have increased over tenfold in 2021, and over a million users now use the platform, which averages over $10B of daily trading volume.

"According to the announcement, FTX said Ontario Teachers’ Pension Plan Board, via its Teachers’ Innovation Platform, Temasek, Sequoia Capital, Sea Capital, IVP, ICONIQ Growth, Tiger Global, Ribbit Capital, and Lightspeed Venture Partners participated in the latest financing."

Had a 3AC position which it liquidated after the UST fallout in May 2022.

Partners 

"FTX is proud to have partnered or collaborated with many leading cryptocurrency firms, including but not limited to:"

Alemeda Research, Circle, BUSD, HUSD, TrueUSD, Paxos, BiLira, Fenwick and West, Galois Capital, Proof of Capital, TomoChain, Bitfinex, Mars Finance, Consensus Lab, CoinGecko, BitMax, CoinEx.com, FBG and Lemniscap.

  • Is a partner with HUSD, also according to their website (20-4-2020).

Alameda Research

Basics

  • Started in late 2017 by Sam.
  • Quant trading firm / trading desk

"When asked about farming and dumping SUSHI tokens and reportedly shorting YFI on our podcast in November 2020, , Alameda chief Sam Bankman-Fried said his firm’s involvement in DeFi was motivated by short-term profits. He added that Alameda will not seek to have a long-term impact on protocols via governance."

"Alameda Research took advantage of with the Balancer Protocol. As Sam Bankman-Fried documented on Twitter, Alameda was able to game the Balancer Protocol and should have received a ton of $BAL as a result. However, by decree of Discord chats, Balancer decided to enact a whitelist, meaning Alameda would not receive the rewards."

Reputation

  • The trading desk is respected for its success at making money, but also deemed notorious; Rekt going so far as calling it "one of the most savage trading desks in the business".
  • Alameda used CREAM as to "taking over a decentralised protocol by depositing his own centralised tokens, and using them as collateral to short other decentralised tokens." (9-10-2020)
  • Alameda has been blamed for shorting YFI in the past (12-10-2020)

Funding

"Balancer Labs announced that Pantera Capital and Alameda Research have made an investment in Balancer, through the direct purchase of BAL tokens from the Balancer Labs treasury."

"Raised $3.9 million for a platform to insure individuals and investors. 3 Commas, AAM, Alameda Research, Alpha Chain, Black Edge Capital, Solidity Ventures, and Spark Digital Capital provided the bulk of the capital for the startup, which is eyeing a platform release “in the coming months.”

Team, funding, partners

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