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98 Years Left Until Century-Old Enterprise! FTX Achievements in Two Years?

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98 Years Left Until Century-Old Enterprise! FTX Achievements in Two Years?

FTX celebrated its two-year anniversary on May 1, 2021, with founder Sam Bankman-Fried (SBF) aspiring to make FTX the Google, Tesla, and Apple of the blockchain industry. In addition to discussing his ideas and vision, Sam also outlined the milestones achieved by this rapidly emerging exchange in the past two years.

The Rise of FTX

Sam, 29, had worked at the Wall Street quant firm Jane Street Capital for three years. After leaving, he ventured into the world of cryptocurrency, landing a spot on Forbes' 2021 billionaires list by founding the quantitative trading firm Alameda Research.

In January 2018, while many were focused on the 30% Bitcoin premium on Korean exchanges, he noticed a 10% premium on Japanese exchanges and seized the unforgettable arbitrage opportunity.

Although the crypto industry was considered immature and inefficient by Wall Street standards, Sam saw an opportunity to establish standards in the chaotic market. After moving to Hong Kong at the end of 2018, he began developing the FTX exchange.

Founder SBF's Vision

Embrace Change, Create Change

Since its inception, FTX's innovative trading products have been widely recognized. While Sam seems to consistently capture trends, he believes:

FTX doesn't wait for the wind or walk against it; it creates the wind.

He envisions FTX becoming a global leading trading platform that offers any product users want to trade, aiming to cover all secondary trading markets as much as possible.

Is the Goal Never to Beat Competitors?

Entering the top four exchanges within two years is quite impressive, but Sam's vision is to become the industry leader. To show respect and gratitude for their contributions and evangelism in the early days of the industry, Sam believes the best way to repay them is:

to innovate, to excel, as this is the greatest form of respect to them.

Becoming the Google, Tesla, and Apple of Blockchain

FTX was often doubted and challenged in its early days, but they remained steadfast in their beliefs about themselves and the future. From the initial leveraged tokens, equity tokens, sub-accounts, to presidential election contracts, Sam pointed out that new products are gaining more and more recognition.

He hopes FTX will eventually become like top companies such as Google and emphasizes:

to become a company that lasts a century is not about earning money for 100 years but about bearing responsibility for 100 years.

FTX's Philanthropic Endeavors

Unlike most in the cryptocurrency space, Sam's accumulation of wealth is driven by the intention to donate half of it, stemming from his long-standing immersion in utilitarianism. He believes in the principles of altruism and earning to give.

Recently, FTX also established a foundation that donates 1% of platform fees. The foundation has raised over $7 million, with some contributions from users. Users can vote for charitable organizations from a carefully curated list to receive the donations.

Product Milestones

Innovation in products has always been a strength of FTX. Many trading products such as leveraged tokens, equity tokens, and sub-accounts have been copied by other exchanges. However, FTX will continue to innovate, let's review FTX's product history together.

Introduction of Leveraged Tokens

FTX introduced the industry's first leveraged tokens in 2019, tokenizing "leveraged trading" to create ERC-20 tokens with leverage capabilities. Users can trade without the need for collateral and enjoy 3x leverage benefits through spot trading.

FTX demonstrated its "innovativeness" in trading products in its first year of operation. Leveraged tokens have also been listed on exchanges like Binance, BitMax, Pionex, with some exchanges developing their own versions instead of using FTX's ERC-20 leveraged tokens.

Exchanges like Binance and FTX have had conflicts over leveraged tokens, with reports on this matter being published multiple times.

MOVE Volatility Contracts

Also in 2019, FTX pioneered MOVE volatility contracts that track Bitcoin price fluctuations. In simple terms:

  • Long Position:

Expecting Bitcoin to break out of consolidation and profit from significant volatility, regardless of whether it goes up or down. Buying price must be lower than the settlement price to profit.

  • Short Position:

Anticipating stable Bitcoin trends without major rallies, where price fluctuations are relatively calm. Buying price must be higher than the settlement price to profit.

The MOVE contract is similar to futures contracts, and FTX has successively introduced daily, weekly, and quarterly MOVE volatility contracts.

Prediction Markets

FTX is a leading player in this field, where predicting events and product prices before they happen falls under prediction markets. Through options contracts, FTX has introduced a wide range of products, including:

As early as February 2020, FTX launched the "Trump Presidential Election contract" and made a significant impact in the prediction market, which was originally dominated by decentralized platforms. At the beginning of the presidential election last November, the open interest in FTX's presidential election contract reached $5 million, ranking first.

Quant Zone

Launched in April last year, "Quant Zone" allows users to create and share their quantitative trading strategies through FTX. These strategies can be simple or have complex trading logic. A complete trading strategy must include:

  • Trigger logic: Setting up trigger logic strategies using default conditions and mathematical formulas provided by FTX.
  • Execution logic: Setting up trading orders to be executed when market conditions meet trigger logic.

FTX Taiwan partner Sun Binsheng has also released atutorial video and article related to Quant Zone.

Equity Tokens

In October last year, FTX introduced "Equity Tokens," allowing users to participate in traditional stock market trading products directly on FTX. Initially, FTX launched popular assets like Tesla (TSLA), Apple (AAPL), Amazon (AMZN), and continued to list other equities to broaden its offerings.

Similar to leveraged tokens, other exchanges have also ventured into equity tokens, includingBittrex Global and Binance, both collaborating with CM-Equity AG, a German asset management firm. Currently, FTX and Bittrex lead in the variety of equity tokens, surpassing Binance. Hence, in reports, FTX founder SBF remains confident, even hinting that Binance's equity trading features are still rudimentary, akin to beta versions.

Entry into the Lending Market

For Taiwanese users, Bitfinex has always been the preferred lending platform. FTX introduced lending functionality in December last year, providing users with another lending option that may pose a challenge to Bitfinex's market share.

While the returns from liquidity mining exceed those from lending, investors must bear the risks of volatility and price fluctuations. Hence, the demand for secure, reputable exchange lending features remains significant among users.

Click here for FTX's lending tutorial.

The Future of Solana?

Following the rise of Binance Smart Chain (BSC), investors are on the lookout for the next widely adopted public chain. Initially opting for Solana for its superior performance and stability, unlike BSC and Ethereum compatibility, Solana has not yet become the hottest choice amidst Ethereum's high transaction fees. As mentioned earlier, Solana's UX is vastly different from Ethereum's, and high TPS and security are basic features of Ethereum competitors. To stand out, Solana must develop revolutionary new protocols and platforms to attract top developers to grow the Solana ecosystem.

The Future of FTX

Diverging from the development of traditional cryptocurrency exchanges like OKEx, Huobi, and Binance, FTX has indeed carved out its path in a competitive market over the past two years, progressing rapidly. However, FTX faces challenges such as larger user bases on other mainstream exchanges and product replication.

But Sam believes that the money FTX earns is merely the result of doing the right things. Innovation, continuous improvement of FTX products, the launch of more engaging new products, and expanding the breadth of the exchange's racecourse will undoubtedly yield better returns in the long run.