FTX is a platform for cryptocurrency derivatives trading. It is designed by professional crypto traders to facilitate cryptocurrency enthusiasts and trading firms with a more intuitive and easier-to-use platform.
The derivative exchange market has been dominated by companies like OKEx and BitMex over the years. However, FTX has now entered the race by bringing in new and innovative features for all traders. Since their inception, they are able to garner a lot of support from the crypto community and have built up a strong reputation. FTX is gaining popularity for bitcoin and altcoin derivatives and becoming the go-to exchange market for traders.
The exchange is focused on expanding cryptocurrency derivative products like BTC Perpetual and Futures contracts. They are also allowing indexes on small, medium, and large cap altcoins.
Before FTX, traders had to revert to previous cycles to understand the risks associated with keeping altcoins and their relationship with the price movements of Bitcoin. However, FTX has solved this problem by introducing several markets through one product and provides the facility for users to hedge their holdings.
Furthermore, FTX has introduced innovative and unique products like MOVE indices to track the volatility of crypto movements. The platform has also introduced new tokens called the 3XBull Tokens, which are represented by ERC-20 tokens.
FTX exchange was launched in 2019 and is currently owned by the FTX Trading Limited Company based in Barbuda and Antigua. Its operations are conducted from Hong Kong, where its headquarters is located.
The CEO position of the company is held by Sam Bankman-Fried while the CTO is Gary Wang. The platform was incubated by Alameda Research, which consists of experienced cryptocurrency traders who have been working since 2017. They are a $100 million cryptocurrency trading firm and have become a market maker in the industry.
The major competitors of the company are Deribit and BitMEX. While FTX is significantly smaller than its competitors but it offers a lot of improvements over them due to its innovative features. They are on track for closing the gap with their competitors. Their daily average trading volume is about $50 million. The platform also offers huge liquidity for its users despite it being relatively new.
The platform offers its users perpetual swaps for 15 digital assets. Its competitors only offer two. Moreover, FTX has introduced tradable indices such as the “altcoin index” and has a leveraged token for more than 45 assets. They offer not only several future contracts for the popular cryptocurrencies but also for lesser-known cryptos like LEO, ALGO, or MID.
FTX offers its users a wide variety of products in the cryptocurrency derivatives exchange industry. Their core features include over 40 leveraged token and MOVE contracts. This is one of the reasons why the platform has hit more than $800 million of trading volume since its launch.
FTX is known for the following distinguishing features:
- API: FTX provides a public API, which is always available and free to use. It is offered in Chinese and English.
- Order Types: They offer basic and advanced order types, which include trailing stop, take profit, and stop and take profit limit orders. These provide users with flexibility in entering and exiting positions. The site also confirms an order before it is processed to allow the user to make any changes before they send the order.
- Token Utility: The FTT token offers several benefits. Users are rewarded for holding the FTT tokens and receive a reduction in trading fees as well.
- Trading pairs: FTX has currently listed 28 base pairs for trading, which include a large number of submarkets. Users have a lot of options on the number of pairs and the type of market in which they can trade. Traders can easily convert listed pairs into collateral for trading in other markets. There is no obstacle for users to access new markets.
- Mobile App: FTX has its own phone application, which is available on iOS and Android. It allows its users to make trades on the go. The app has a simplistic user interface and is very easy to use.
- Multiple Deposit Methods: The platform has multiple deposit methods and even accepts stable coins.
- Prevents Clawbacks: FTX has a liquidation system that monitors all positions very closely and has a unique system to prevent any clawbacks when users face losses.
- Indices: It provides indices, which track the price of a bundle of coins like ZEN, XMR, ZEC, etc.
- Referrals: The platform has a unique referral program that allows its users to earn 30% of their referral’s trading fee. They are also able to enjoy a 5% discount on their own trading fee. You can earn even more from this referral program depending on how many people you have referred to and their trading volumes.
One of the main advantages of using FTX is its low fee structure. They have a tiered fee structure starting at tier 1. It has a trading fee of 0.02% for makers and 0.07% for takers. The average industry trading fee is about 0.02%. Therefore, we can see that FTX offers substantially low trading fees as compared to their competitors. Moreover, this trading fee can be reduced further depending on the volume of trade by the user. The highest tier has offered the lowest fee, i.e., 0.01% for makers and 0.04% for takers.
The platform, like Binance, offers a token with their exchange facilities to provide a discounted trading fee to its users when they hold this token. This discount varies from 3% to 60% on the trading fees if users are holding the FTT token.
Moreover, the leveraged tokens have a creation and redemption fee, which is 0.10%. A management fee of 0.03% is also charged on them. A 50x leverage increases the fees by 0.02% while a 100x leverage or higher increases the fees by 0.03%. This is paid to the insurance fund.
The fees charged on MOVE contracts depends on the price of the index and not the price of the contract itself. Moreover, there is no fee on OTC trading or converting the assets in your wallet. These costs are inbuilt to their quoted price.
FTX does not levy any fees on futures settlements. There are also no deposit or withdrawal fees charged.
Verification: Is KYC required?
You need to pass KYC to access all the features of the FTX platform. If users want to withdraw more than $1,000 per day, then they will be required to verify themselves by the KYC protocol.
To do this, users can go to the identity verification page. They will have to provide some standard documents to make their account verified. They will be required to give proof of their address, an identification document that is legally recognized, and their own picture with the date and FTX written on it.
However, the KYC process for FTX has three different tiers of requirements.
- Tier 0 has a withdrawal limit of $1000 all time. It only requires the user’s email.
- Tier 1 has a withdrawal limit of $2000 every day or $9000 if the trading volume is higher than the transfer volume. The KYC tier 2 requires your name, email, region, and the country you are located in.
- Tier 2 has no withdrawal limits. It requires the following details and documents:
- Legal name
- Date and place of birth
- Address with proof
- Description of the source of all assets
- Passport or ID card issued by the government
- Picture of the user holding a paper with FTX and the date written on it as well as their ID
To submit your KYC application, you need to follow the following steps:
- Log on to the FTX website.
- Click on Register.
- Create your account and click on verify identity.
- Enter all the details for Level 1 identity verification if you want to achieve the Tier 1 KYC verified status, which will allow $2000 per day withdrawals.
- Ensure that all information added on the KYC form is accurate and upload all the required documents to achieve the Tier 2 status.
- Click on Submit.
FTX exchange provides its services in many countries, including Canada, UK, France, Australia, Spain, Italy, Portugal, Russia, China, Turkey, Ireland, Netherlands, South Africa, Brazil, Mexico, Austria, Poland, and Switzerland. However, users in the United States are not able to use this platform yet.
Similarly, the platform is not available in Crimea, Iran, Cuba, Syria, Antigua, Barbuda, or North Korea. It is also important to note that there are a few countries where cryptocurrency trading is not yet legalized. As a result, residents from those countries are also unable to use the FTX platforms.
Moreover, multiple languages are also supported by the platform, including English, Chinese, Turkish, Korean, Russian, Vietnamese, Spanish, French, German, Dutch, Italian, and Portuguese.
Deposit & Withdrawal
One of the most distinctive features of FTX exchange is that it allows multiple methods of making deposits. FTX currently accepts deposits in Bitcoin, Bitcoin Cash, Tether, Ethereum, Litecoin, TUSD, USDC, PAX, and the FTT token, which is supported by the platform itself.
To make your deposits, you must go to the top menu and click on the wallet option. You must then select which deposit method you are opting for and the cryptocurrency you are depositing. This will also require two factor authentication.
After selecting the currency and entering the amount, click on the deposit button and follow the rest of the instructions. If you do not possess any cryptocurrency, then you will need to purchase it using fiat.
It is important to note that some digital coins need a tag or a memo before it is deposited. If you are depositing such a coin, then including the tag is necessary. This tag helps identify who deposited the coin. If the tag is not included, then the currency will not be credited to your account, and you will lose funds.
The platform also accepts wire transfers. However, there are a few stipulations with it. For wire transfers, users must hold a Tier 3 KYC verification. These transfers also take a few days before the balance is added if the currency is not the US dollar.
Similarly, withdrawals are also possible through wire transfers. FTX does not charge any deposit or withdrawal fee. However, if the withdrawal is being made using bank transfers, then $75 fees must be paid for withdrawals less than $10,000 Users prefer to make all deposits and withdrawals in cryptocurrency, as it is a cheaper alternative.
FTX processes all withdrawals promptly. They usually take up to a few minutes for processing. However, larger withdrawal amounts need a manual review from the company and can take a few hours to be processed. For stablecoins, the withdrawals can be slowed down depending on how fast they are created or redeemed. Larger withdrawals can even take up to 6 hours on business days and 24 hours on the weekends.
Users should always ensure that they are making all their deposits and withdrawals to the correct wallet address. If an incorrect address is added, this can result in a loss of funds that even FTX will not be able to recover for you.
Account: Register & Login
The process for new users to get registered on FTX exchange is very quick. All you need to do is follow these simple steps to make your first trade on the platform.
- Sign-up and create a new account. For signing up, all you need is an email id and a password. You will then be taken to the FTX homepage.
- If you want to withdraw an amount of more than $1000, then you will have to go through the KYC process, which we have already covered in detail. It can be done from the Verify Identity option. This process is available for individuals as well as institutions. All documents need to be submitted according to their requirements. You must follow all instructions very carefully. When all your uploaded documents are approved, you will gain unrestricted access to the site and have no withdrawal limits.
- Now its time to deposit your funds. This is also done in the wallet section. Choose your deposit type. FTX will provide you with a deposit address. All deposits must be made to this address, which may take up to 30 minutes.
- When deposits are made, the balance will be updated. You can now make your first trade using FTX’s platform. You can either trade perpetual swaps from the Futures tab or trade-in leveraged tokens by going to the Tokens tab.
- After your trade is complete, you can now make your withdrawals. To do so, go to the wallet tab again.
- Click on Withdraw. This will give you the option to withdraw amounts to an ERC20 wallet address.
- FTX also provides the option to convert your bitcoins to USD stablecoins. To do so, you can click on the convert option. The conversion takes place instantaneously.
Safety and Security
FTX has a robust security system in place, which makes it a popular platform for cryptocurrency traders. Since it was launched only a few months ago, there hasn’t been some serious testing about its security services. However, many factors give testimony that the platform is as secure as it can be.
Firstly, FTX is a project of Alameda Research, which is a quantitative trading firm that manages over $100 million of digital assets. Over $1 billion assets are traded daily. The firm has top notch security. Since FTX is handled by their team, the safety of FTX can also be guaranteed.
Moreover, the technical team at the company is very talented. It comprises of graduates from the top universities like Berkeley and MIT. They also have previous experience in working for Facebook and Google and are well versed in the security systems. FTX has also partnered with renowned companies like FBG Capital, Circle, and True USD, which prove its trustworthiness.
FTX’s security system includes two-factor authentication. However, IP address whitelisting is not yet supported by their system. They store all the user’s assets in a multi-signature cold wallet to prevent any theft or fraudulent activities. The funds are kept offline. This protects them if the system ever compromises and does not give the attacker full access to the funds.
The platform has also obtained the SSL certificate, which is issued by Cloudfare and is a renowned web security company in the United States. They do not have any history of theft or fraud yet. However, it is difficult to assess whether they are entirely reliable because the company is relatively new.
The company has recently linked with Chainalysis to help them monitor any suspicious crypto transaction alerts by using their Know Your Transaction product. They are quite sure that they are meeting all the anti-money laundering (AML) compliance solutions to monitor these transactions. These alerts are available for 15 cryptocurrencies. By screening these transactions in the KYT, real-time alerts are received by FTX, which help them impose all compliance policies and focus on mitigating exposure to any type of risk.
The platform provides excellent customer support to its clients via email and telegram. Their customer support team is highly trained and responds to all inquiries within a few hours. FTX also has an excellent social media presence, especially on Twitter, where they keep their followers up to date about the latest product developments and news regarding the company.
FTX also provides a dedicated help center for customers to submit their requests and receive additional information and help. The help center also contains a library of detailed guides about the company’s services. The most frequently asked questions are also answered with great depth. All common problems like account related issues and specifications of contracts are addressed.
Their 24/7 support service has a response time of one hour during business days. They provide multilingual support to their customers from all across the world. However, it is not apparent which languages are offered right now.
FTX has separated itself from its competitors in the cryptocurrency derivatives exchange market by introducing new and innovative trading products and leveraged tokens. It has brought crypto enthusiasts new methods of investment and speculation on cryptocurrency and its derivatives.
Let’s list some of the pros and cons of the exchange to get a better picture of how useful the exchange is.
- It is specially developed by crypto traders and tailored to their requirements.
- It focuses on newly introduced derivative products.
- It has a well trained and experienced team handling all operations.
- It has unique features like indices and trading on political matters.
- It has very low trading fees and also provides discounts to individual users.
- It has proven to be safe as there have been no hacks or security problems with the company since it has been launched.
- It provides a variety of deposit methods.
- It also a phone app to help traders keep an eye on their assets on the go.
- The platform is relatively new and inexperienced.
- They have many regional restrictions. FTX has also failed to provide alternative solutions to users facing these restrictions.
- There UI is blocky.
- It is still not operating in the United States.
Although the platform is quite new, FTX has managed to provide ample liquidity for its traders. If the company continues its recent growth rate, it can soon become the leader cryptocurrency exchange that is available. It already offers multilingual 24/7 customer support, which is another feather in its bucket. Providing the best customer support services can place exchanges way ahead of their competition.
Moreover, what makes FTX so unique from all other crypto exchange services is its trading pairs. Even products like Dogecoin and BNB futures contracts are offered. However, there are some areas of improvement for the exchange. The website and phone app need to have a more intuitive user interface so that newcomers find it easier to navigate through their site and be able to use their services.