FTX’s exchange token FTT is now compatible with the Binance Chain

A few hours ago, Sam Bankman-Fried announced on Twitter that FTX’s exchange token, FTT, is now dual-compatible with the Ethereum and Binance blockchain networks.

”We’ve just enabled BEP2 FTT deposits and withdrawals. FTT is now dual-listed as an ERC20 and BEP2!” – Tweeted Bankman-Fried, CEO of FTX exchange

The news comes shortly after Binance announced investing in the FTX exchange and taking a long position on the FTT token. The companies are calling the collaboration a “strategic investment,” as FTX will help provide liquidity and develop products.

From the press release, it seems like Binance is providing FTX cash for tangible services. The exchanges are very different as Binance’s flagship site does not trade derivative products, which is mostly what FTX is made up of. Binance Futures, which is a derivatives exchange, still only lists ETH and BTC pairs.

It is unclear what FTT being compatible with the Binance chain will accumulate to in the immediate future other than making it easier to support on their exchange. Binance already supports so many tokens that it likely would be able to accept FTT as the ERC-20 token that it has been. Mostly, what it looks to be is FTX co-signing their new partner’s network.

For right now, FTX leads in diverse derivative products over any exchange, and Binance is probably looking for some pointers.

“The FTX team has built an innovative crypto trading platform with stunning growth. With their backgrounds as professional traders, we see quite a bit ourselves in the FTX team and believe in their potential in becoming a major player in the crypto derivatives markets.” – Changpeng Zhao, CEO of Binance

Binance allegedly disables the ability to short after bad news

Larry Cermak, Head of Research at The Block crypto news outlet tweeted yesterday that Binance has been disabling short orders when bad news comes out. Changpeng Zhao, CEO of Binance recently pledged to start a fund against FUD, news that causes “Fear, Uncertainty, and Doubt.” The allegations have been confirmed by other users, but there are still some descending opinions and there has not been a formal response from Binance.

Binance has recently started disabling shorting on margin when bad news. about certain projects comes out. They’ve done this for Matic and Vechain. But going long on margin is still allowed and never disabled if good news comes out.” – Larry Cermak

Because this allegation follows the biggest altcoin crash in recent history, MATIC/BTC, it’s easy to believe that the exchange is going to extreme circumstances to make sure it doesn’t happen again. Zhao blamed the crash on bag holders panicking while others blamed it on malpractice from the coin’s founders.

“A number of big traders panicked, causing a cycle. Going to be a tough call on how much an exchange should interfere with people’s trading.” – Changpeng Zhao

The Binance exchange where coins like MATIC are listed is not a derivatives exchange, so when traders short, there actually needs to be coins to borrow. This is one of the top arguments against the idea of Binance not allowing short orders during times where there is bad news. Still, if this is the case, it would be nice to have a count of the borrowing supply.

Most people in this space do not understand the mechanics of short-selling. @cz_binance is not disabling shorting. There just isn’t supply of coins to short in peak times.” – @Lord_of_Crypto

Zhao is a fan of Bitcoin, so it will be more obvious if they are trying to manipulate the market in favor of bulls if they ever decide to turn off shorting of Bitcoin during bad news. There surely will always be an excess of those to borrow.

 

21% of Binance Futures users are trading with 125x leverage

In a tweet today, Binance announced some user base statistics including that a whopping 21% of exchange participants use 125x leverage on average. Using leverage is essentially taking out a loan for a trade, meaning that users have 125 times their buying power. $100 in this case could scale to $12,500. The catch is that you can lose your money 125x more quickly.

Crypto assets are volatile, trading is risky and combining the two with 125x leverage results with a small chance of profiting. Just today, there was a 5% wick in a low volume range that rose and depleted within five minutes. Market reactions that nobody expects can easily liquidate a 125x position.

Binance’s statement did not clarify whether or not 125x leverage was considered to be the same as cross leverage. Cross leverage takes funds from your wallet as your position falls, putting liquidation further away as long as you didn’t go all in. Usually, cross leverage takes the minimum amount necessary to enter the trade, in this case, 1/125th of the position size, allowing users access to leftover funds unless the position starts losing money.

Traders pay a percentage fee based on the position size, so the more amount of money exchanges can offer traders, the more they will profit. Using this type of leverage wouldn’t fly past US regulators, which is likely why Binance and Poloniex abandoned US citizens. Regardless of how dangerous trading with leverage is, the fact that US traders don’t have legal access makes them feel left out.

 

Matic, Indian led crypto asset crashes 80%. Racism ensues

Yesterday, Matic, an Ethereum side-chain protocol, saw around a 80% decrease in price after about a month of upside. Afterwards, anonymous traders on crypto Twitter couldn’t help but express racism towards Indians due to the ethnicity of Matic’s leadership.

Racist jokes towards Matic’s Indian leadership

The most noticeable thread where users were stereotyping was on zyzz’s Tweet, a trader with a paid group and frequent of crypto Discord chat rooms. He posted a picture of EtherScan’s records of the Matic Foundation sending MATIC to Binance, implying that they were responsible for the crash, and included a picture of the founders next to it.

Here’s some replies to the thread:

Obviously, these commenters are associating a derrogatory stereotype of Indian people as scammers. A common slur that I’ve seen in crypto Discord groups is to joke about “Pajeet” when talking about a scam. Pajeet is a stereotypical name for Indian people, and apparently the slur started on 4chan.

Here’s another offensive response in the same thread:

Matic Founder’s response

One founder of Matic, Sandeep Nailwal, responded to the racial attacks.

“I m seeing such racial attacks on a hardworking Indian project which hs been striving hard & making an impact even with small resources Entire Indian community needs to unite against this racial slur & fight to prove our worth We hv top Indian teams in all blockchain sectors” – @sandeepnailwal

Racist culture thrives in an anonymous crypto space

While it’s natural for people in the crypto space to be weary of pump-and-dump schemes, and there appears to be reasonable evidence that suggests the Matic Foundation has sent large amount of money to Binance, the immaturity in the crypto space is concerning.

Before, we have covered an anonymous crypto trader with 70,000 followers saying that women should never have been able to vote. It’s possible to have a messed up sense of humor, but the frequency in which this behavior is accepted, and the lack of consequences due to anonymity is a plague to the space.

Crypto is one of the few industries where privacy and anonymity is respected to an extent, but it may be detrimental to the expansion of the space as the culture could deter a large demographic of people. At the same time, it attracts those who desire the ability to spread hatred, ethnocentrism, etc.

 

[Update: New math] Allegedly, Matic sent around $10 million of their supply to Binance, mostly for liquidation

Earlier today, the price of $MATIC dropped around 80% within 24 hours. People are now investigating as to why there was such a huge dump, and some think EtherScan records hold the answer.

Samuel JJ Gosling, Founder of Validity Crypto, posted a link to the Matic Foundation’s records, where they sent around $10 million (calculated at all-time high) to Binance addresses. On first look, the transactions lead to unknown addresses, but tracking them further shows that they were deposited, or possibly sold to known Binance 1, 2, 3 and 4 addresses.

There are 10 trillion Matic Tokens in circulating supply and around 300 billion were sent withdrawn from the foundation.

Matic and Binance’s response 

Sandeep Nailwal, Co-founder of Matic responded to Goslings post very critically.

“FUD account. We will post the exact numbers. This is complete BS, the out amount is from the smart contract lockup account to Foundation account. Amounts sent to Binance or any other accounts are in conjunction with our token release. Why would a project do this deliberately,” tweeted Nailwal

Changpeng Zhao, CEO of Binance backed up his claims.

“Our team is still investigating the data, but it’s already clear that the MATIC team has nothing to do with it. A number of big traders panicked, causing a cycle. Going to be a tough call on how much an exchange should interfere with people’s trading.” – @cz_binance

FUD is a term that Zhao is notorious for throwing around, and is short for ‘fear, uncertainty and doubt.’ Nailwal calling the linked address a “FUD account” implies that it is not theirs. If this is true, it is unclear how EtherScan picked the address up as the Matic Foundation.

MATIC is a low market cap coin, and if even $10 million worth of a coin that was worth $.05 was sold all at once, it might be able to initiate a crash around the magnitude of what happened today. Observers are waiting for Binance and Matic to come up with more evidence before there is a consensus of no foul play.

Update:

Gosling updated the math and it turns out that only 3% of MATIC supply was sent to Binance, closer to $10 million USD. Originally this post had published that it was $67 million.