The idea of a financial transaction tax (FTT Token) is both popular and controversial. It raises complex technical concerns (financial, economic, and legal) and is highly symbolic.
FTT is often presented as either a fanciful utopia that is impossible to implement or as an insurmountable handicap for financial marketplaces. It is therefore worth remembering that the stock traded has been taxed in the United Kingdom since the 17th century, in the form of a stamp duty that brings in nearly €4 billion each year, and has not impeded the City’s development. Nearly every developed country has adopted such a tax at some stage and more than thirty countries worldwide currently impose a tax on financial transactions, including Switzerland, Hong Kong, and Taiwan. The European FTT proposal is more ambitious than the existing taxes, especially as it expands the base to cover derivatives and high-frequency trading. There is no reason to believe that FFT is necessarily a handicap, however.
What is FTT Token?
FTT token is the main code of the FTX Exchange. With this token, you pay less FTX trading costs, receive social benefits from the insurance fund, you can buy and burn your costs weekly, and use it as collateral for futures trading.
FTX is an exchange of cryptocurrency derivatives, to create a platform strong enough for professional businesses and visual enough for first-time users. FTX is supported by Alameda Research, a provider of cryptocurrency liquidity. Binance, a cryptocurrency exchange, invested in FTX in December 2019.
What is the reason for FTT token popularity?
If FTT is so popular, this is no doubt a response to the explosion in transaction volumes consecutive to the financial deregulation since the end of the 1970s. This has long been applauded by the majority of economists, who see it as a powerful growth driver. Between 1975 and 2015, whereas global GDP increased 15-fold, stock market capitalization increased 50 times over and total financial transactions rose by a factor of 300. The question now is whether or not the growth in financial transactions is excessive. The potential benefits in terms of liquidity are minimal and come at the price of less transparency and increased distrust of the financial markets.
In practice, the impact of FTTs is modest. Overall, empirical research shows a fall in short-term transaction volumes. About the introduction of the FTT in France in 2012, for example, the fall is estimated at between 10% and 20%. This decrease is significant but is limited compared with the upward trend in stock traded: in 2015 alone, for example, transactions in French shares rose by nearly 30%. This, therefore, implies that, in practice, FTTs limit the growth of the financial markets very little; they delayed this expansion by a few quarters at the most. There are also very few signs of a significant impact on the liquidity of securities. FTTs, at least as they stand today, also do not seem to increase or decrease market volatility. In other words, they are neither the catastrophe feared by some, nor the panacea hoped for by others.
What features in the FTT make it usable?
FFT’s design is of course of fundamental importance. Concerns about the possible relocation of financial activity would appear overdone, however. The dual principle of the place of issue and place of residence creates the conditions for a broadly applicable tax, regardless of the transaction’s origin. FTTs currently only apply to the transfer of ownership, which therefore excludes intra-day transactions. As a result, between 80% and 90% of stock traded are exempt from FTT in France or the United Kingdom. Taxing intra-day transactions requires the thorough revision of the collection system to obtain reliable information about transactions, including high-frequency traders and/or trades on alternative trading platforms.
Ultimately, it seems that FTT has the attributes that make a good tax: its distorting effects are slight, tax receipts are potentially high and collection costs are minimal; it also has a redistributive effect. An equivalent of the UK Stamp duty, extended to the world’s main countries, would raise $100 billion a year, despite its many exemptions. Its extension to derivative instruments and intra-day transactions would bring in additional revenue while improving transparency.
How does FTT token work?
FTX products can be divided into four main sections: 1) fixed and permanent futures, 2) leverage tokens, 3) volatile products, 4) OTC platform. Let’s look at these:
Fixed and permanent futures
FTX’s main product is fixed futures. Traders can bet on the movement of the price of the main cryptocurrencies in a certain time horizon, or terminate the contract using the 3X to 100X leverage through the permanent future of FTX indefinitely. The main innovation of the FTT token with this product is its three-step dissolution solution, which adjusts the collateral at different price levels to prevent major breakdowns once. Some of the assets that traders can bet on or against are BTC, ETH, LTC, EOS, XRP, ADA, LINK, etc.
Leverage tokens are ERC-20 tokens that represent bets on or against specific assets. Through leverage tokens, collateral automatically balanced and there is no concept of margin that makes trading easier for traders.
The FTT token MOVE contract allows traders to be exposed to price fluctuations in assets such as BTC instead of their own.
Finally, the OTC platform is embedded with Alameda Bankman-Fried research and allows traders to access up to 24 digital currencies around the clock.
In return for providing these services, FTX charges customers relatively little for their transactions. The structure of these costs is as follows:
– In spot and futures markets, the manufacturer costs 2bps and the recipient costs 7bps. As the volume of 30-day traders increases, this cost is reduced to 0bps and 4bps for manufacturers and receivers, respectively.
– Leverage tokens have a creation/redemption cost of 10bps and a daily management cost of 3bps
Using 50X or 100X leverage can increase these costs by 2bps and 3bps, respectively
On the FTX platform, FTT token holders enjoy a wide range of discounts on these costs and are rewarded with redemption using part of the total costs raised by the platform. Token holders can also participate to some extent in the management of this platform.
They come from major Wall Street sources and tech companies: Jane Street, Optiver, Susquehanna, Facebook, and Google. And they are really familiar with the traditional secondary market. They have a history of trading in stock derivatives. Also, they know how derivatives traditionally designed and what the market demand is for.
FTT token is supported by Alameda Research. If you do not know who they are, they are the $ 100 million AUM Cryptocurrency Trading Company. Within a year, Alameda Research became the largest provider of liquidity and marketer in the crypto space. Alameda trades $ 600 billion to $ 1 billion daily, accounting for approximately 5% of global volume, and ranks third in the BitMEX rankings.
What are FTT use cases?
Burning token/revenue share: Approximately one-third of all fees incurred in FTT tokens are used to repurchase FTT.
Discount on transaction fees: FTT tokens are also used to reduce business costs.
Collateral: The FTT token may be used as collateral for future situations. This increases the demand and facilities of FTT.
Social benefits: Part of the profit will be social market movements among FTT holders.
Leveraged Token Listing Fees: Projects can use FTT tokens to pay for listing fees when creating their leverage tokens.
White Label Solutions: Crypto institutions must pay the FTT fee when purchasing the white label version of the FTX OTC portal and futures exchange.
Future Development: FTT token is the backbone of the FTX ecosystem. When we add other derivatives to the platform, it becomes even more useful, making this token an essential part of everyday trading on the FTX exchange.
Staking: Users can consider their FTT for various benefits such as discounted marker fees, bonus votes, and waived Blockchain fees. Unstacking the FTT token lasts 14 days and does not help with any rewards.
FTT Token price prediction
While it is not always possible to make a precise prediction of where the price of a particular coin will go, one can get a great idea after examining its basics, including the growing popularity of using future exchanges.
However, after reviewing several sources and looking at what the futures offer, the price of its FFT token looks very positive in the short and long term.
Wallet Investor has declared the FTT Token very bullish. It even predicted that its price would rise by 82.52%. This price is $ 85.46 from the current price of $ 46.96! Within five years, the price can be up to $ 94.574!
Digitalcoin has also provided a very positive price forecast. Over the course of a year, prices are projected at $191 to $205.59 for one and five years. Although a bit conservative than Wallet Investor, your investment will increase by +32% and 359%, respectively.
Tradingbeast’s price analysis is even more conservative. It actually predicts a decrease in price for the year 2021. However, that is only short-lived, as it then expects the price to go up in the years after. By the end of 2024, it calculated a price average of $210.
FTX Token Price Prediction 2021-2025
We can expect the price to continue with its explosive growth. The average growth rate expected to be $560.43
2022 expected to be another positive year for all FTT holders. At the same time, the price of FTT estimated to almost double. Investors can expect to see a price of $264.
2025 could be the year in which every FTT investor loses sight of the US dollar sign ($). This year, the price of an FTT token will range from $560.43. This is approximately a +200 average increase average!
FTX Token Price Prediction
Is FTT Token a Good Investment?
After analyzing several charts and taking into consideration that we just entered a bull market, there is serious doubt to suggest that investing in FTT Token is not a good investment. In fact, just holding on to your FTT tokens without utilizing their benefits for trading will almost guarantee a profit. For those that do engage in futures and leverage trading, the wealth that can be generate can be immense, although that is not without serious risks. It is just like holding Bitcoin through Bitcoin cloud mining.
How to Buy FTT Token?
One potential drawback for FTT Token is that there are only a limited number of exchanges that list the FTT token with limited volume. The first one that comes to mind is the FTX futures exchange itself. Other well-known ones are Binance, BitMax, Bitfinex, CoinEx, and Huobi Global. For a complete list of exchanges, please go on over to CoinMarkCap or CoinGecko.
Although the taxation of financial transactions is a very popular proposal, it has also long been viewed as an outrageous idea. It rejected by most experts who believed that such an initiative was impossible to implement. And if it were possible, they feared that, by increasing transaction costs, this tax would reduce liquidity and increase market volatility. The 2007-2010 crisis has transformed the landscape. Although there are still major obstacles and the proposals are controversial, the debate is clearly now underway.
Discussions about FTT invariably focus on its effect: some hope that it would reduce market instability by discouraging speculation, while others opposed to it, fearing greater volatility because of a lack of liquidity. Empirical studies disprove both sides. FTT, as it is applying today, is not a Pigouvian tax: it has very little impact on the markets. It is neither the catastrophe fearing by some, nor the panacea hoped for by others.
FTT is a good tax that is both modern and efficient. A tax with a broad base and a low rate does not create distortions and generates considerable revenue for a modest collection cost. If the British stamp duty extended to the world’s main countries, it would raise at least around $100 billion a year, which would be enough to fund anti-climate change measures, for example. FTT Token might also extended to derivatives and intra-day transactions, which would increase receipts collected. This admittedly requires adapting the collection system, but this can only improve financial markets transparency.
Countries with FTT tax
FTT Token is also a strong symbol and this matters when it comes to tax. The tax is often viewing as symbolic rather than efficient. This overlooks the fact that “consent to taxation” is a founding principle of democracy. FTT would therefore demonstrate a willingness to reform the financial sector. At the European level, if the European Commission proposes to be (finally) enshrine in law, this would be an important first for tax cooperation.
Ultimately, this is not about punishing bankers or the markets or even really reducing instability. Regulatory instruments are more suited to these purposes. The primary objective of FTT should be to raise funds. It is of course important to design it properly to limit the negative effects. The European proposal has been carefully thought out to avoid the main pitfalls and recent experience provides for optimism.