Created in 2019, the FTX crypto derivatives trading platform quickly established itself as a benchmark. Let’s find out together the reasons for this success story.
Please note: trading involves risks, and financial derivative products on cryptoassets are reserved for an informed public.
The FTX team
FTX is headed by Sam Bankman-Fried . A prominent figure in the cryptosphere, this former trader at Jane Street Capital on Wall Street is also the founder of Alameda Research , one ofthe most important liquidity providers in the cryptocurrency market.
He is supported by Gary Wang (CTO), Nishad Singh (Head of Engineering), Dan Friedberg (General Counsel), Jen Chan (CFO), Constance Wang (COO), Darren Wong (CMO) and Michael Burgess (Head of partnerships). In total, the FTX company, based in Antigua and Barbuda , employs around 40 people.
The platform launched its operations on May 8, 2019 . It was notably financed by Binance and has its own token, the Immediate Edge. The seriousness of the team is well established: in less than two years, FTX has become essential, with a daily volume of around $ 4 billion .
You can find the interview conducted by Sami of the founding president of FTX on our YouTube channel.
Before taking a closer look at the FTX platform, let’s take a look at these famous financial derivative products on cryptocurrencies.
What is a financial derivative product?
As their name suggests, financial derivatives are financial instruments whose value derives from an underlying asset . These are contracts between a buyer and a seller. They can have an expiration date (we speak of a futures or future contract ) or not (we call them perpetual contracts ).
The derivatives are well known in the world of traditional finance due to the volume very important that they represent. However, their popularity in the crypto market is quite recent.
They have several advantages for the trader : there is no need to own the underlying asset (e.g. bitcoin) to be exposed to it, and they usually offer very high leverage .
Leverage ( leverage ) to buy or sell a quantity of active more important than what we have . Concretely, the trader borrows liquidity (from the platform, a broker or even over-the-counter).
Thus, the gains made will be greater if its prediction is correct, but so will the losses if the trade loses. It is therefore a very dangerous tool to be handled with care.