Following the collapse of FTX and the exchange filing bankruptcy on Nov. 11, the trading platform’s exchange token called ftx (FTT) has shed 91.6% in value during the last seven days. While the FTT token’s utility is based entirely on the backing of the now-bankrupt FTX and Alameda Research, the token is still trading for $1.85 per unit. Moreover, FTT’s deployer contract surprisingly unlocked 192 million FTX tokens on Nov. 12, 2022. While a few crypto exchanges have halted FTT deposits, crypto coin aggregation sites like coingecko.com have flagged the number of coins in circulation.
A Suspicious FTT Unlocking Event Puts Crypto Community on High Alert
A touch after 9:00 p.m. (ET), the crypto community noticed that the ftx (FTT) deployer contract moved 192 million new FTT tokens. No one knows why this happened, but it has added 192 million previously locked tokens to the supply of 133,618,094 FTT that was circulating prior to the transfer last night.
Coingecko.com’s website notes that the “FTX token Contract Deployer has transferred out the entirety of supposedly locked FTT tokens into circulation.” In a now-deleted tweet, Binance CEO Changpeng Zhao (CZ) tweeted that Binance has halted FTT deposits. CZ said:
Binance has stopped FTT [deposits], to prevent [the] potential of questionable additional supplies affecting the market. We will monitor the situation.
Similar to the Terra fiasco, the FTX implosion took place in a matter of six days after Alameda Research’s balance sheet was made public, and Binance CEO Changpeng Zhao told the public his exchange would be dumping all of its FTT tokens.
On Nov. 5, 2022, ftx (FTT) was trading for $25 per FTT and by Nov. 8, it was below $5 per coin. FTT was a token launched shortly after FTX was created, and it was privately launched in July 2019 by the FTX and Alameda teams.
Imagine McDonald’s makes its own money, let’s call them clown-bucks, keeps most of it, and sells some to the market.
McDonald’s then uses their remaining clown-bucks as collateral for actual loans.
And then people remember clown-bucks aren’t real.
— Lyn Alden (@LynAldenContact) November 8, 2022
FTX White Paper Claims FTT Is Backed by an ‘All-Star Team’
FTT was made to give owners FTX-based rebates when they traded on the exchange or leveraged FTX OTC. Anyone holding between $1 million to $5 million worth of FTT could get automatically upgraded to a VIP status if they used both services.
Out of the initial 350 million FTT tokens, 175 million were designated as “company tokens that unlock over a three-year period.” 73,461,920 FTT tokens were sold and vested by “July 21st, 2019,” according to FTX’s transparency page saved to archive.org.
While ftx (FTT) tokens offered rebates for FTX users and VIP perks for large holders, FTT’s white paper highlights that most of FTT’s value stems from an “all-star team.” The FTT white paper says that FTX is backed by Alameda Research, the quantitive crypto trading platform started by Sam Bankman-Fried (SBF).
“Alameda trades $600 million to 1 billion a day, accounts for roughly 5% of global volume, and is ranked 2nd on the Bitmex leaderboard,” the white paper boasts.
Following the drop below $5 per coin on Nov. 8, 2022, FTT’s token value is down to under $2 per token. While FTT is down 97.6% from the $84.18 per unit all-time high it reached on Sept. 09, 2021, it’s managed to stave off the extremely fast death spiral Terra’s LUNA (now LUNC) saw when it collapsed.
In fact, anyone who purchased FTT before Sept. 06, 2019, is still up by 74% against the U.S. dollar. 50 million FTT tokens were sold for a price range between $0.10-$0.20 during the initial exchange offering (IEO).
10 Addresses Hold 93% of the FTT Supply — Despite the Negative News, FTT Still Trades for Under $2 per Unit
Data recorded before the deployer unlock had shown FTT once had a circulating supply of around 133,618,094 FTT. The FTT tokens that were purchased in July 2019 unlocked after the listing, “at a rate of roughly 3% per day. FTX also did regular FTT repurchases and burns to bolster the coin’s tokenomics.
FTT is very concentrated as 22,876 addresses hold the ERC20 token and 10 addresses hold 93.22% of the FTT supply, according to coincarp.com richlist data. Into the Block statistics via markets.bitcoin.com, shows 96% of holders are at a loss in terms of profit.
Into the Block’s concentration of large holders metrics for FTT is 97% and FTT’s price correlation with bitcoin (BTC) is around 0.9%. In the last seven days, in terms of transactions greater than $100K in FTT tokens, $2.4 billion worth of FTT has been settled this past week.
FTT saw a weekly high of 520 large transactions on Nov. 8, 2022, and roughly 21 large transactions in the last 24 hours. The average FTT transaction over the course of the last week was $55,266.27 worth of FTT tokens.
Most of FTT’s trade volume during the last 24 hours derived from exchanges like Binance, Gate.io, Hitbtc, Huobi, and Kucoin respectively. Over 60% of FTT trades are against tether (USDT) which is followed by BUSD, BTC, BNB, and ETH respectively.
Despite all the bad news surrounding FTX’s collapse and the immense concentration of FTT holders, unlike LUNC, the token has not plummeted to zero. After the news broke about the FTT deployer contract unlocking the remainder of locked FTT tokens, FTT is down more than 7% lower against the U.S. dollar. During the last 24 hours, FTT has been swapping for $1.79 to $2.20 per unit.
What do you think about the FTX exchange token FTT? Let us know what you think about this subject in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
This news is republished from another source. You can check the original article here