What is FTX Token?

FTX Token (FTT) was the native utility token of the now-defunct FTX cryptocurrency exchange. Launched in 2019 by Sam Bankman-Fried and Gary Wang, FTT was designed to enhance the trading experience on the FTX platform by providing benefits such as trading fee discounts, staking rewards, and use as collateral for margin trading. However, following FTX’s collapse in 2022, the token lost its primary utility and market relevance.

How is FTX Token useful?

Before its downfall, FTX Token played a key role in the FTX ecosystem. It provided users with reduced trading fees, access to exclusive token sales, and leveraged trading benefits. The token also featured a buyback and burn mechanism, where a portion of exchange revenue was used to repurchase and burn FTT, reducing its supply over time. However, after FTX’s bankruptcy, the token lost its core functionality, leaving it with little to no practical use.

How does FTX Token work?

FTT was an ERC-20 token on the Ethereum blockchain, serving as a utility and governance asset within the FTX exchange. The exchange implemented a tiered fee system, where FTT holders received increasing discounts based on the number of tokens held. It was also used as collateral in FTX’s derivatives and futures markets. The token’s buyback and burn model aimed to control supply, but the platform’s collapse ultimately rendered these mechanisms ineffective.

FTX Token milestones

• FTX Exchange Launch: Introduced in 2019, establishing itself as a major derivatives trading platform.

• Acquisition of Blockfolio: Purchased Blockfolio in 2020 for $150 million, expanding its market reach.

• Multi-Billion-Dollar Valuation: Raised $900M in 2021, valuing FTX at $18B and marking a peak in its success.

• FTX Collapse and Bankruptcy: Filed for bankruptcy in November 2022 following a severe liquidity crisis.

• FTT Decline: Lost nearly all value by 2023, with no real utility after FTX’s shutdown.

FTX Token once played a vital role in one of the largest crypto exchanges but now serves as a cautionary example of the risks associated with centralized platforms and governance failures.