As derivatives continue becoming an increasingly important component of the cryptocurrency space, it’s crucial that new exchanges join the landscape and bring new functionalities to the table.
One of those new exchanges is FTX, which is the exchange that we will be reviewing throughout this guide.
Throughout this FTX review, we analyze the pros and cons of this margin exchange, the contracts and coins it offers, its fees, security, and more.
FTX review in short
|Available contracts||Futures and leveraged tokens|
|Trading Fees||0.02% maker, 0.07% taker|
|Available coins||15 perp. swaps, 45 leveraged tokens|
|KYC/AML||Required to withdraw $1,000+|
|Excluded countries||USA, Crimea, Cuba|
|Customer Support||Email and Telegram. Good Help Center.|
What is FTX?
FTX is a brand new cryptocurrency derivatives exchange that differentiates itself from its competitors by offering a wide variety of indices and leveraged tokens.
- Perpetual swaps for 15 assets
- Offers tradeable altcoin indices
- 45+ leveraged tokens available
- Less battle-tested than competitors like BitMEX
FTX is owned by FTX Trading LTD, a company incorporated in Antigua and Barbuda and operated by Alameda Research.
The fact that the exchange is operated by Alameda Research, one of the largest cryptocurrency market makers, ensures that the exchange has extremely deep order books.
With a daily average volume of $50 Million, FTX is still significantly smaller than competitors like BitMEX and Deribit. However, that gap is likely not going to last too long due to the vast improvements the exchange offers over other crypto margin platforms.
First of all, FTX offers perpetual swaps for 15 assets. This is in strong contrast to BitMEX and Deribit which only offer 2. FTX also offers tradable indices like an “altcoin index” and leveraged tokens for 45+ assets.
On the contrary to BitMEX and Deribit, FTX does require its users to verify their identity to withdraw more than $1,000.
To complete the identity verification process, users have to fill out a form with the source of their funds, proof of residence, and a scanned copy of their identity document.
After FTX reviewed the documents, a process which usually takes less than 12 hours, users can then proceed with depositing funds on the account without any restrictions.
This is in strong contrast to competitors like BitMEX and Deribit, which only support deposits in Bitcoin and Ether.
Overall, the trading interface is very clean and intuitive. Similarly to Deribit, FTX also does not display a “bar” to adjust the leverage.
Instead, users type in the amount of margin that they want to use, and the exchange calculates the required leverage automatically.
FTX coins and contracts
FTX Exchange stands out as being one of the most complete cryptocurrency exchanges out there. At the time of writing, FTX offers cryptocurrency futures, bitcoin options, leveraged tokens, MOVE contracts, spot trading, and OTC trading.
On the “futures” tab, users can trade 15 different perpetual swaps. The perpetual swaps offering of FTX includes popular coins like Bitcoin, Ether, BNB, and Bitcoin Cash, but also more exotic products like an “Altcoin Index” and even a “Shitcoin Index”.
Although FTX currently offers up to 101x leverage, the exchange sets the maximum leverage to 10x by default on all accounts.
If you want to unlock higher leverage, head over to the “settings” section of your FTX account and scroll down to the “Account Leverage” section to increase your leverage maximum.
On the “Leveraged tokens” tab, users can trade 45 different leveraged tokens. These tokens are constructed in a way that enables traders to get leveraged exposure to a particular crypto asset (on both the long and short side), without risking liquidation.
Fourth, FTX is among the first cryptocurrency exchanges to list options. On the contrary to Bitcoin options exchanges like Deribit, FTX does not have an orderbook though for its options.
Instead, traders simply fill out a form where they can customize the strike price and expiry of their desired option. After less than 10 seconds, FTX Exchange will then quote a bid and ask price, which traders can decide to fill or not.
While not having an options orderbook may be undesirable for some traders, the benefit is that FTX does not have to list thousands of orderbooks, while simultaneously being able to offer highly customized options.
In additon to regular options, FTX also offers “MOVE” contracts, which represent the absolute value of the amount an asset moves in a period of time.
For example, if BTC moved $250 in a day (in any given direction), the MOVE contract would settle at $250 at the end of the day.
Finally, FTX recently added spot markets to its exchange as well. This enables its users to purchase BTC, ETH, FTT, Tether, and BTMX, with USD. If trading larger size, users can also opt for FTX’s OTC functionality.
FTX offers a tiered fee system that is based on the 30-day volume traded by a specific user.
For users in the lowest tier (trading under $3M in monthly volume), FTX charges a 0.02% maker fee and a 0.07% taker fee. On the other hand, users in the highest tier (trading over $100M per month), the fees drop to just a 0.01% maker fee and a 0.025% taker fee.
The exchange does not charge any fees on futures settlement.
Traders can reduce their respective fees by making use of FTT coin, FTX’s native cryptocurrency.
For example, users holding $10,000 worth of FTT automatically receive a 10% fee reduction, while users holding $5,000,000 worth of FTT get their fees reduced by 30%.
Finally, leveraged tokens have a creation and redemption fee of 0.10% and a daily management fee of 0.03%.
Security and trustworthiness
FTX was launched in early 2019, so the exchange isn’t as battle-tested as competitors like BitMEX, which has been around since 2014.
However, there are many factors that make us believe that FTX is a secure and trustworthy crypto derivatives exchange.
First of all, as pointed out in the introduction, FTX is operated by Alameda Research. Alameda Research is a quantitative trading firm managing over $100 Million in assets and trading over $1 Billion per day across thousands of coins.
Alameda Research is arguably one of the largest liquidity providers in the cryptocurrency space, while also having deep connections with major cryptocurrency exchanges.
This not only means that the firm can afford to hire talent to make sure FTX’s security is top-notch, but it also has the necessary connections to find said talent.
Secondly, FTX has an extremely talented technical team with talent from firms like universities like MIT and Berkeley, and firms like Google and Facebook.
And finally, the exchange is also officially partnered with big names in the cryptocurrency space. The list of FTX’s partners includes firms like Circle, True USD, and FBG Capital, which by supporting the exchange clearly vet for its trustworthiness.
Although FTX offers an advanced optional security setting in the form of two-factor authentication, the exchange currently does not support IP address whitelisting.
Customer Support and Education
FTX provides great customer support on Telegram and via email, where the support team replies to inquiries in just a few hours.
Although the exchange is very active on Twitter as well and often provides updates on the official account, it does not reply to support inquiries via that medium.
That said, the excellent FTX help center makes opening a support inquiry unnecessary in most cases.
The help center has dozens of in-depth guides answering common questions ranging from account-related issues, to specifications about offered contracts and even the FTX API.
How to trade on FTX
Getting started on FTX is simple. Here’s a simple guide of the steps you need to complete before making your first trade on the exchange.
1. Sign-up and create account
The first step when getting started on FTX is signing-up for an account. This is incredibly simple and requires nothing more than your email address and a password.
After clicking “Sign Up”, you will be directed to the homepage of FTX.
If you want to withdraw more than $1,000 on FTX, then the next step is to pass the KYC process and verify your identity.
To do so, click on the Wallet” tab at the top of the page, and then click on the “Verify Identity” button that shows right above the “Balances” section.
The KYC process on FTX is very straightforward.
If you are an individual (an not an institution), all the exchange asks you for is your full name, address, source of funds, and a scanned copy of an ID document.
The exchange will also ask you to provide proof of your address, which you can submit as a bank statement, utility bill, or government ID with an address.
Once you submitted the KYC form, the FTX team will usually take 8-12 hours to review your documents.
After your documents are approved, you will now have unrestricted access to your FTX account.
2. Deposit funds
FTX supports deposits in TUSD, USDC, PAX, Bitcoin, Ether, Bitcoin Cash, Litecoin, Tether, and all of the leveraged tokens supported by the exchange.
To make a deposit, simply head over to the “Wallet” section again and look for the asset that you want to deposit.
When you found the asset that you want to deposit, click on “Deposit” and wait until a window opens that shows your deposit address.
Finally, simply deposit your desired amount to the address displayed on your screen. Depending on the asset you are depositing, it may take up to 30 minutes for the balance to appear.
3. Start trading
Once your deposit arrives, you are now ready to place your first trade.
If you want to trade perpetual swaps, then now click on the “Futures” tab at the top of the page.
If, on the other hand, you want to trade leveraged tokens, then click on the “Tokens” tab.
Once you are on either of the two pages, you can now place your first trade on FTX!
If you are trading futures, the leverage is adjusted automatically based on the number of contracts that you are purchasing.
On the other hand, leveraged tokens already have assigned leverage depending on the token that you purchase (3x long, 3x short, or 1x short).
Alexander has worked in community growth for multiple cryptocurrency companies. He is now the Sales and Operations Manager for CoinDiligent. In his free time, he writes articles sharing his industry insights. You can get in touch with Alexander on LinkedIn.