FCoin (FT)

 Basics

• Founded in:
• Mainnet release:
• Based in:

History

• From Bankless (27-8-2020):

"FCoin, founded by Huobi’s former CTO, was once the hottest exchange in crypto. As far as we can tell, they brought the concept of “transaction fee mining” to the crypto ecosystem. Transaction fee mining was like Yield Farming V1 (but way more centralized and scammy).

FCoin distributed 51% of its native tokens (“FT”) to users as a way to reimburse their trading transaction fees. FCoin incentivized users to transact frequently since the platform reimbursed 100% of the transaction fees that users paid with FT tokens. 80% of the exchange’s daily revenue from transaction fees were paid back to users in the form of FT tokens.

In the FT white paper (which belongs in a cryptocurrency history museum) they described this process as: 

“Most importantly, FCoin has pioneered the “Trans-Fee mining” model, in which more than half of the platform’s total FTs will be rewarded to the community’s users to offset 100% of their transaction costs. In an unprecedented fashion, the FCoin community will distribute 80% of its revenue to FT holders.”  

This trading scheme made FCoin, at one point, the highest volume exchange in crypto. In practice, what happened with transaction fee mining was that you were participating in an “indirect ICO” (or as Binance Founder CZ called it at the time, a “disguised ICO”). 

In a typical ICO, you exchange BTC or ETH for the ICO token, usually at a fixed ratio. With FCoin, you were trading on their exchange, maybe something like the BTC/USDT pair, you paid your fee in USDT, and then received FCoin tokens (“FT”) in return. So you were giving away a token with actual value—USDT—and getting a new, arbitrary token in exchange. In practice, what caused this scheme to fail was that FCoin was minting new tokens every day to pay out the dividends, in turn increasing supply. While the mania drove an initial price spike, eventually FT crashed because of (oversimplification here) too much supply. This constant inflation decreased the token value for existing holders, giving holders more of an incentive to sell as soon as they received the FT dividend."

Tech

• Whitepaper can be found here.
• Code can be viewed [insert here].
• Built on:
• Programming language used:

Transaction Details

• Capacity (TPS):
• Latency:

Roadmap

• Can be found [Insert link here].

Audits

• Bug bounty program can be found [insert here].

Hacks/Bugs

• Was mentioned by CipherTrace as third (28-1-2021) in magnitude when it came to criminal activity and Rug Pulls in 2020 in DeFi.

Pros and Cons

Cons

• From Bankless (27-8-2020):

"This trading scheme made FCoin, at one point, the highest volume exchange in crypto. In practice, what happened with transaction fee mining was that you were participating in an “indirect ICO” (or as Binance Founder CZ called it at the time, a “disguised ICO”).

In a typical ICO, you exchange BTC or ETH for the ICO token, usually at a fixed ratio. With FCoin, you were trading on their exchange, maybe something like the BTC/USDT pair, you paid your fee in USDT, and then received FCoin tokens (“FT”) in return. So you were giving away a token with actual value—USDT—and getting a new, arbitrary token in exchange. In practice, what caused this scheme to fail was that FCoin was minting new tokens every day to pay out the dividends, in turn increasing supply. While the mania drove an initial price spike, eventually FT crashed because of (oversimplification here) too much supply. This constant inflation decreased the token value for existing holders, giving holders more of an incentive to sell as soon as they received the FT dividend."

Team, Funding, Partnerships, etc.

Team

• Full team can be found [here].

Funding

• Part of the portfolio of 8 Decimal Capital

=== Partners ===