Crypto exchanges are an increasingly crowded market where investors come like a storm and get the financial services with the help of crypto exchange tokens. Crypto exchange tokens are the native tokens of different crypto exchanges that are directly used by the investor to perform various operations. Where these tokens are used to perform various tasks on the crypto exchanges, and also here play a vital role in the growth of crypto exchanges. Let's discuss how? So, today in this article we will delve into one of the crypto exchanges ``FTX" and the crypto exchange tokens ``FTT". And at the end of the article, you will have a better understanding of crypto exchange tokens and their roles in the growth of crypto exchanges.
What Is a Crypto Exchange Tokens
A crypto exchange token is a form of digital currency that is issued by crypto exchanges. These tokens are developed by using blockchain technology. Crypto exchange tokens facilitate their users to perform various operations (transaction fee) and services (such as trading, margin trading, lending, and borrowing) on the crypto exchanges. There are so many other crypto exchange tokens that also offer so many other services such as voting rights, sharing of revenue, and others. There are so many crypto exchange tokens in circulation here I mentioned a few of them that are commonly used:
- Binance Coin (BNB) - issued by Binance exchange
- Crypto.com Coin (CRO) - issued by Crypto.com exchange
- BitMax Token (BTMX) - issued by BitMax exchange
- Bibox Token (BIX) - issued by Bibox exchange
- Nash Exchange Token (NEX) - issued by Nash Exchange.
- Huobi Token (HT) - issued by the Huobi exchange
- KuCoin Shares (KCS) - issued by the KuCoin exchange
- FTX Token (FTT) - issued by FTX exchange
- OKB (OKB) - issued by OKEx exchange
Crypto Exchange Token and How Did It Help Blow up FTX?
FTX is a cryptocurrency derivative exchange and its native token is FTT (a crypto exchange token). It offers a range of trading products such as Futures Contracts, Perpetual Futures Contracts, Leveraged Tokens, Options Contracts, Spot Trading, Over-the-counter (OTC) Trading, and Volatility Products.
Now, come to the point of how FTT helps to blow up its exchange FTX. So, FTT acts as a backbone of FTX and it plays a vital role in its growth by performing various tasks such as lowering trading fees, revenue-sharing, and voting rights.
FTX also used a mechanism called the "Buy and Burn" mechanism. Through this mechanism, the oversupply of FTT is controlled. For instance, when we buy digital assets, we need tokens. So, to fulfill the buying portion the trading fee is collected from the exchange. In this case, a large number of tokens are generated by the exchange which leads to an oversupply. To control the over-supply of it, FTX used this mechanism in which the FTT token burns right after buying which helps to limit the overall supply of FTT.
Conclusion
Overall, Crypto exchange tokens are a form of digital currency that is used to perform various operations on crypto exchanges. FTX is a crypto exchange platform and it uses its native token FTT, also called crypto exchange token, to perform various tasks such as trading, transaction fee, and others. FTT helps in the growth of FTX by performing various activities such as lower trading fees, revenue-sharing, and voting rights. Furthermore, FTX used the “Buy and Burn” rule to control the oversupply of FTT and it really increased the value of FTT.
