What Is FTX Token (FTT), and Should You Buy It?

The popular cryptocurrency derivatives exchange FTX is having an outstanding few months. The price of its utility token, FTT, has risen over 130% in just six weeks according to CoinMarketCap data, following a flurry of announcements.

FTT Basics

What it does: FTT is the utility token on the FTX cryptocurrency exchange. It can be used to reduce trading fees on the exchange or serve as collateral against futures positions. It can also be staked to earn interest and get the chance to win NFTs.
Management team: CEO Sam Bankman-Fried is an MIT graduate who worked at Jane Street Capital before co-founding both Alameda Research and FTX with Gary Wang. CTO Wang is a former Google software engineer.

FTX, Alameda Research, and Sam Bankman-Fried

Sam Bankman-Fried is something of a crypto superstar. The 29-year-old billionaire co-founded quantitative trading firm Alameda Research with Gary Wang in 2017. The pair went on to launch FTX two years later. Bankman-Fried believes in effective altruism, living life to maximize the good you can do in the world.

FTX offers crypto derivatives trading, including futures and options. Instead of more traditional margin trading, which traders can use to multiply their gains or losses, FTX uses leveraged tokens. These let customers take a leveraged position without dealing with the complexities of full margin trading. Its U.S. site, FTX.US, has a limited selection of services because of the restrictions on retail derivatives trading.

Derivatives are advanced trading products that involve trading contracts to buy or sell a product without necessarily owning the underlying product itself. They allow traders to speculate on whether a market will rise or fall.

FTX set out to solve a number of problems faced by other derivatives exchanges, such as tedious trading processes, poor liquidity, and so-called "clawbacks." Clawbacks are when money is taken from various investors to cover another person's bankruptcy.

Alameda Research is a quantitative trading firm that manages over $1 billion in digital assets.