Interpretation of FTX 2021 Annual Report Highlights
Author | Qin Xiaofeng
Editor | Hao Fangzhou
Produced | Odaily
Author | Qin Xiaofeng
Editor | Hao Fangzhou
Produced | Odaily
In the past three years, the encrypted trading platform FTX has risen rapidly, ranking among the top popular with a strong posture.
Especially in the past 2021, some encrypted trading platforms have been hit hard due to the tightening of policies around the world, while FTX has been developing steadily, with both transaction volume and user volume hitting new highs.
In terms of regulation, FTX has obtained the Bahamas encryption financial license, and continues to maintain close cooperation with regulators in more than a dozen other jurisdictions around the world, making steady progress.《End of Year 2021》At the same time, FTX is favored by top capitals at home and abroad such as Sequoia Capital and Softbank, and has received multiple rounds of investment. In 2021, the total financing will exceed 1.4 billion US dollars, and the valuation reached 25 billion US dollars at the end of last year (currently the latest C round valuation reached 3.2 billion US dollars. One hundred million U.S. dollars).
What's more eye-catching is that FTX also sponsored a number of international events and teams last year, including: League of Legends Championship Series (LCS), Mercedes-AMG Petronas F1 Team, Major League Baseball, NBA Golden State Warriors With Miami Heat, International Cricket Council, Super Bowl, TSM e-sports club, etc., the boundaries of the encryption circle are constantly being broadened.
Recently, the FTX official blog released the 2021 annual summary——
, Odaily also sorted out the following key content for readers:
(1) Data: transaction volume and user volume soared
The figure below shows the major trading platforms in the past two years (January 2020-December 2021). From the perspective of transaction volume growth, FTX is undoubtedly the leader.
Especially after 2021, FTX will usher in leapfrog development. According to official data, the total transaction volume in the two months after the start of 2021 reached 404 billion US dollars, exceeding the total transaction volume of 2020 of 401 billion US dollars - the single month transaction volume in May also exceeded this figure; 2021 The total annual transaction volume in 2019 is 11.5 times the sum of 2019 and 2020. The average daily trading volume in 2021 will be US$12.5 billion, a month-on-month increase of 1187%.
Specifically, the total spot transaction volume of FTX in 2021 will be US$719 billion, an increase of 2400% compared to 2020; in addition, the spot transaction volume in 2021 is equivalent to 180% of the total transaction volume of all categories in 2019-2020, including Spot, futures, perpetual contracts, options, leveraged tokens and others.
Regarding the reason for the rapid growth, FTX attributes it to the spot margin system (that is, leveraged lending transactions) launched in December 2020. Data shows that FTX’s lending market peaked at $8 billion in outstanding amounts, making it the largest P2P lending market in the crypto industry.
There are also some interesting stats on transactions. For example, during the "5.19 plunge" last year, FTX's single-day trading volume reached a peak of 60 billion US dollars; on November 12, the daily spot trading volume reached a peak of 13.8 billion US dollars; the highest trading volume of futures and spot has increased compared to the high point in 2020 nearly 2 times.
In addition to the breakthrough in transaction volume, FTX in 2021 has also captured more users around the world. Registered users have successively exceeded the 1 million, 2 million, and 5 million mark, an increase of 1500% compared to 2020; at the same time, the daily active users in 2021 will almost reach Number of registered users in 2020. Especially in the United States (FTX.us), the user base will grow by more than 12100% in 2021.
(2) Recruit talents and upgrade products
The ever-increasing number of users and transaction volume have put forward higher requirements for the FTX operation team.
Throughout 2021, FTX will continue to recruit talents and attract more top global talents to join the team. Data shows that in 2021, FTX will expand from 72 employees at the beginning of the year to more than 200 at the end of the year, an increase of nearly 2 times.
At the same time, FTX also extended an olive branch to more traditional financial and legal professionals, including former Citadel executive Brett Harrison, former HSBC executive Jonathan Cheesman, former CFTC commissioner Mark Wetjen, former Sullivan & Cromwell partner Ryne Miller, former Key figures such as Nick Beckstead, a member of the charity organization Open Philanthropy, have joined FTX in the past year.
With a large number of talents in place, FTX will also upgrade the platform and products in 2021 to meet the trading needs of users.
First, improve the performance of your website. By improving the infrastructure, FTX has greatly improved the throughput of the transaction engine and the interaction ability of the server. For users, the speed of order placement and transaction matching has been greatly enhanced, and there is no large-scale downtime under extreme market conditions, and normal transactions can still be performed. "These improvements are not as compelling as new products, but are critical to our continued growth and will be an important priority for our work in 2022."
In terms of underlying technology, FTX has also built a new integrated support center, abandoning the original cumbersome emails and using an integrated exchange ticketing system to improve user experience. “This allows us to maintain the quality of customer service while the exchange is growing rapidly, a difficult feat in the crypto industry.”
Furthermore, FTX also launched the FTX App. The app went live and opened for trading at the beginning of the year, and was rebranded to FTX App in the summer. Its main purpose is to create a retail-friendly application that allows anyone to participate in crypto transactions without paying high fees. In the next step, the FTX App will be merged with the FTX system to achieve account sharing, so as to obtain the best service.
Support for the new public chain ecosystem is also one of the keys to FTX's success. In particular, new ecosystems such as BSC, AVAX, Solana, and DOT can be charged, withdrawn, and spot traded on FTX, meeting the various trading needs of users.
With the explosion and prosperity of NFT, FTX has also established an NFT market to support Ethereum and Solana ecological NFT projects, and users in specific regions do not even need to pay Gas fees on the chain. "Our goal is to become the premier infrastructure provider for NFT creation, issuance and trading."
Finally, the upgrade of some small functions also makes users more sticky. Examples include the addition of Google federated authentication, historical balance snapshots, improved payment processes, and more. FTX Payments is also designed to be very personalized, allowing merchants to receive payments based on their specific needs. “We welcome all merchants, whether your business is crypto or non-crypto related, join us and make FTX Pay the payment platform of choice for everyone.”
(3) Actively comply with regulations and set up the global headquarters in the Bahamas
In 2021, global encryption policies will be tightened, and FTX has been actively communicating with regulators.
Specifically, in 2021 FTX received a crypto license in the Bahamas under the 2020 DARE Act – FTX also became the first cryptocurrency trading platform in the Bahamas to receive a derivatives license. Moreover, the local government also intends to cooperate with FTX.
Therefore, FTX decided to build a global headquarters in the Bahamas, and plans to start construction in the first quarter of 2022; the estimated construction cost will be around US$100 million, which will greatly improve the economic sustainability of the Bahamas. Additionally, FTX has also made significant contributions to the Bahamas. By the end of 2021, FTX had donated over $10 million to various organizations across the Bahamas.
The interaction between FTX and the Bahamas has made a new attempt for the compliance of encryption platforms, and also paved the way for FTX to cooperate with global regulators.
In addition to landing in the Bahamas, in 2021 FTX also obtained various licenses in the United States through acquisitions and applications. For example, FTX US acquired LedgerX (now FTX US Derivatives), and obtained CFTC-registered Designated Contract Market (DCM), Derivatives Clearing Organization (DCO) and Swap Execution Facility (SEF) licenses, enabling FTX US to trade in the United States and other jurisdictions that recognize CFTC licenses. FTX also completed the acquisition of Zubr Exchange Limited, an authorized digital ledger technology provider in Gibraltar, which means FTX has acquired legal status in the Gibraltar region.
Additionally, FTX is working with regulators in a dozen other jurisdictions around the world to be licensed and regulated in those jurisdictions, enabling it to better serve clients around the world.
(4) Pursue altruism and sponsor global events
In 2021, FTX is also actively working with sports leagues, teams, and athletes to bring encryption technology to mainstream society. This year, FTX also scored a number of firsts: the first crypto company to acquire stadium naming rights; the first company to sign an agreement with four major sports leagues; the first time to pay a college partner entirely in cryptocurrency.
Specifically, FTX’s partners are as follows:
FTX reached a partnership with Mercedes-Benz F1 and its drivers in the middle of the 2021 season and became an official cryptocurrency partner. It is expected that Mercedes-Benz F1 will further embrace cryptocurrency in 2022;
FTX and Major League Baseball (MLB) have reached a cooperation and become the official cooperative encryption exchange of MLB;
FTX became the first company in the crypto industry to name an arena, which opened last October;
FTX begins long-term relationship with seven-time Super Bowl champion Tom Brady and supermodel and entrepreneur Gisele Bündchen; Tom serves as FTX's ambassador and Gisele serves as FTX's environmental and social action advisor ;
FTX begins a long-term partnership with three-time NBA champion, two-time NBA Most Valuable Player, philanthropist and entrepreneur Stephen Curry, who becomes FTX's global ambassador;
FTX has cooperated with TSM, the world's most influential e-sports organization, and obtained the exclusive naming rights. TSM will be renamed as TSM|FTX;
FTX partnered with American professional baseball player Shohei Otani, 2021 AL Most Valuable Player, winner of the Commissioner's Historical Achievement Award (a very rare award) and 2021 Monthly Burst Champion;
FTX and the Golden State Warriors officially started cooperation, and the FTX logo was unveiled at Chase Center;
FTX becomes the official crypto platform in partnership with Monumental Sports and Entertainment, owner of the Washington Wizards, Capitals and Mystics;
FTX has established a partnership with Riot Games to become a sponsor of the League Championship series; FTX will directly sponsor the "Most Improved Player Award" and cooperate on future NFT projects;
During the Men's T20 World Cup, FTX established a 3-year partnership with the International Champions Cup, which set a global viewership record;
California Athletic and FTX partner to pay 100% in cryptocurrency for first-ever college naming rights deal;
FTX signs a multi-year partnership with NFL 2021 No. 1 pick Trevor Lawrence;
FTX signed an agreement with Kevin O'Leary to appoint him as a brand ambassador;
Miami Heat captain and Miami legend Udonis Haslem becomes FTX's global ambassador;
FTX partners with 3-time World Series Champion and 10-time MLB All-Star David Ortiz to further promote cryptocurrency education among MLB fans and maximize philanthropic impact;
FTX launched the Champions Program, recruiting student-athletes as ambassadors, including British basketball players, Brigham Young University football players, Florida State University softball players and UCLA women's basketball players.
In a series of event sponsorships, FTX has become the most "out of the circle" existence of the encrypted trading platform in 2021. In December, Ad Age named FTX one of the top 10 marketers of the year, making FTX the youngest firm to date to win the honor.
In addition to marketing promotions, FTX also has a strong focus on philanthropy. Back in January 2021, FTX established the FTX Foundation and announced that 1% of all fees generated by FTX will be donated to charity. FTX said that the current donation amount has reached 16.77 million US dollars, while user donations have reached 8.65 million US dollars.
secondary title
(5) Xiti Investment, with a valuation of US$32 billion
Last year, with the increase in FTX trading volume and popularity, global mainstream capital also favored it.
Throughout 2021, FTX completed the B round and B+ round of financing, raising more than 1.4 billion US dollars from Temasek, Sequoia Capital, Paradigm, SoftBank, Tiger Fund and nearly 100 other well-known investment institutions. The final equity valuation to $25 billion.
