What was so good about FTX?

In about 3 years FTX became the 3rd largest exchange on the market. How did they achieve this (besides good relationships in politics)? What USPs did they have, what hole was left in the market? How could that hole filled with DeFi protocols?

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26 thoughts on “What was so good about FTX?”

  1. I only used FTX.us

    The positive thing about them was super low fees and they supported a ton of chains. I use defi a lot so it’s convenient for me to be able to buy some USDC and take into whatever chain I want. Recently, more US CEXs have started integrating with other chains but prior to a few months ago, Binance.us was the only option and they only supported BSC. With FTX, I could send a stablecoin in on like Avalanche, Polygon, BSC, Ethereum, Solana and more and withdraw it on any of those chains.

    They also treated stablecoins (except USDT) and native/wrapped assets as equal. You could send in USDC on Solana and it should up in your account as USD. You can then withdraw it on whatever chain you wanted as whatever stablecoin you wanted. You could send in BTC and withdraw it to Bitcoin, BSC, etc. Same for ETH. You didn’t have to do a swap/trade. It was all treated as one asset.

    On top of all that, withdraws to smart contract platforms other than Ethereum were free. I think BTC was free as well but I could be wrong. Send in a stable, swap it for no fee, and withdraw it on a different chain for no fee. No slippage, no conversion fee, no withdraw fee. Even once Coinbase supported Polygon and Solana USDC, I used FTX as a bridge because it was cheaper than a defi one.

    They would have been my primary CEX but they take forever to clear ACH transactions. A normal ACH on Coinbase, Kraken, Gemini takes like 5-7 days to clear before you can withdraw your purchased tokens. Binance.us was 10. FTX.us was 12 days minimum. I did three deposits. The first was 12 days but the next two took 14 and 18 days. It wasn’t an option for me. Especially when I DCA and Coinbase has a Direct Deposit option where you can get your job’s payroll to send part of your check straight to them and you can instantly withdraw whatever you purchase (and USDC is treated as 1:1 with USD). I hate leaving tokens on an exchange. FTX.us taking 12-18 days was unacceptable.

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  2. From my perspective I started using it as it was well integrated with fiat money meaning the “USD” asset there in the waller was a basket of fiat & stablecoins meaning if you had 1000 in USD there you could withdraw it as USDC, BUSD, USDP or fiat, it made you feel safe that your stablecoins are just as sure as fiat. Plus there was no confusion like on binance, so no BTC/USDT together with BTC/BUSD & other combinations, just plain BTC/USD

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  3. I never used FTX but from what I’ve heard it was:
    – Low Fees
    – Great Futures Trading Mechanisms (How exactly idk)
    – Great Fiat On-Off Ramp

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  4. Strongest point is very easy futures and margin. No need to transfer specific coins or forced to deposit usd – just use one or more coin from their list of supported collateral and put in wallet then you can start futures using non-usd collateral. And they support a lot of futures and margin token. I use a lot to hedge (short 2x or 3x). I tried some defi lending to do hedge but in busy times – gas fee is killing usability.

    1:1 value for usdc and busd. Basically i can enter ftx using usdc on eth and exit using busd on bsc with zero swap fees.

    Also very cheap trade fee and withdrawal fee. Even free sometimes.

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  5. Never touched it. DeFI protocols already fill the whole. Quickswap, Uniswap, pancakeswap. So many options. No money for gas? use Polygon. The only thing they added was convenience for the lazy or uninformed.

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  6. Marketing and a wide variety of coins. They also did a lot of sponsoring with YouTubers, highly effective with noobs to the crypto world.

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  7. Reading these responses, I guess the moral of the story is that it’s easy equate disparate assets, and offer a wide variety of products with low or zero fees, if you’re relentlessly siphoning funds.

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  8. Influence. At any large crypto event, FTX would buy up all of the VIP tables. All large investors and family offices were overwhelmed by their tactics. No other crypto shops could/would compete.

    I am only saying that these tactics were very effective at marketing to large institutional and non-institutiinal investors.

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  9. FTX had no real attention until they offered to bail out Voyager and BlockFi. There’s a lot of attempt to talk about their value leveraging tools, but for your basic retail investor, none of that was part of their exposure anyway. All of their momentum was based off of the good reputation of Alameda Reaearch and SBFs political exposure.

    The holes are already adequately filled by AAVE, Curve etc.

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  10. The FTX system was special because everything was cross-compatible. Unused crypto in your balance could be used as collateral. Same with USD. You could also choose to lend out your assets on the spot lending market at potentially high returns depending on market demand. Unlike most exchanges which have different segregated accounts (Binance for example has Futures, Margin, Spot, etc.) FTX combined it all into one.

    They also had a huge selection of derivatives. Dated futures and perpetuals most notably. The combination of dated futures and perps opened up interesting trading strategies. FTX really gamified the experience, but more geared towards “expert” users who understand the function of these financial products.

    I think that’s why FTX attracted so much AUM, it was very attractive to experienced traders, who of course are most likely to have big accounts. The question is whether FTX’s system was actually profitable, or whether this type of amalgamation between different products led to unmanageable risk and inevitable losses for the exchange.

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  11. I can only imagine FTX’s international site is what gave it its reputation.

    From what I saw on there, I noticed the following

    – Highest volume (or second to Binance) on it’s Perpetual Futures & Leveraged Tokens markets, some coins got their first derivatives contract anywhere (though in hindsight, the inability to trade on Leveraged Tokens for FTT and SOL was highly sus)
    – The ability to trade stocks on the Blockchain. This garnered a lot of attention when you were able to trade on the price of Coinbase’s stock prior to it’s trading on Nasdaq
    – Some truly ridiculous gambling markets. At one point I recall a market that guessed whether Trump would win the Election, a market that guessed whether Bolsonaro would win the Election, and a market that guessed whether or not the Olympics were going to even occur.
    – In addition to all the above, SBF garnered the brand’s name to make his wild & wacky markets look legit if he was sponsoring an F1 team & an NBA arena

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  12. Nothing about it was “so good”.

    It only appeared so because it made onboarding DNC “donors” as painless as possible, keeping the ponzi pot all the sweeter.

    Normies only benefitted from this ease for plausible deniability.

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  13. idk why anyone bothers with any CEX. By the time a coin/token hits a CEX all the real money has already been made. Yeah, FTX was easy to convert/move around between chains, but if this is the case and usability is there, that means EVERYONE is already aware of it and already invested. Although dex’s are filled with scams, they are the place were you can actually find stuff that big investors have not sniffed out.

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