FCoin is a new China-based crypto exchange that was launched in May this year. FCoin (FT) is the exchange’s native token.
It’s similar to the Binance native token Binance Coin (BNB) with a twist.
The exchange is running a marketing campaign whereby all trading fees are reimbursed in FCoin tokens (FT) one-for-one.
The campaign was so successful that the exchange is now leading in daily volume amongst coin exchanges. Even more surprising, the exchange hasn’t even been listed on Coinmarketcap yet or similar websites.
These tokens can then be traded against other coins or used to pay for fees similar to how BNB is used. However, the coins also grant the owner voting rights and revenue sharing.
Its founder is Zhang Jian, a former Chief Technology Officer (CTO) of crypto exchange Huobi, a leading digital asset exchange.
It has even been stated as a reason why the Ethereum network experienced network overload a couple of days ago.
It’s one of the hottest coins at the moment, attracting huge volumes and attention.
What is FCoin (exchange)?
According to its whitepaper, FCoin (FT) is “an autonomous, efficient and transparent digital assets trading platform”. It’s a community of FT holders where every holder has certain like participating in revenue allocation, governance, and voting.
The developers of the exchange hope to offer traders and investors a platform on which they can securely trade any given crypto asset. To do so, they aim at providing an impartial and transparent ecosystem.
FCoin states that users don’t need to worry about “the integrity and robustness of the order handling systems.”
FCoin (FT) token
The FT token is the native token of the crypto exchange and which at the moment allows users to trade on the exchange.
There are 10 billion coins. It is issued in form of reimbursements, something that hasn’t sit well with many in the crypto world.
The token distribution allocated 51 percent to the public, 23 percent for the Fcoin Fund, 12 percent for the team, 9 percent for partners and 5 percent went to a private sale.
FCoin (FT) token roadmap
The FT team has a lot in store for the next 18 months. The first revenue distribution in August later this year should be an exciting moment for the community.
The FCoin whitepaper states that the platform will distribute 80 percent of its revenue to all FT holders ‘on schedule’.
This will be done based on the total revenue, proportional to an FT holder’s total tokens against the total circulating supply.
For instance, let’s assume that the platform gets a total of 100 BTC and 400 ETH as revenue in a day.
What it means is that a user who holds 1 percent of the total FT in circulation will be entitled to 1BTC and 4ETH.
Appears lucrative, but question marks abound about how the platform plans to remain profitable, especially if trading declines considerably.
Why is there controversy about FCoin?
FCoin has generated a lot of debate with regard to its FT issuance mechanism. Part of the Chinese media has criticized the model, referred to as “trans-fee mining” by the platform.
The controversy has risen following a spike in daily transaction volumes of the token, rising at one point to $7.5 billion- a lot higher than what Bitcoin manages at the moment across all exchanges.
The FCoin team has split the 10billion total coin supply into two groups as mentioned above. There’s 51% meant for the public as “community rewards” and 49% reserved for the team and private investors.
It is the “reimburse and release” formula used to allocate the 51% that has raised concern. It has even been compared to an initial coin offering (ICO), only that it claims it isn’t.
One of the critics has been Binance CEO Changpeng Zhao, who wondered:
“You pay transaction fees to the platform with BTC and ETH. Then the platform pays ‘100%’ back to you with its token. Isn’t it just buying platform token with BTC and ETH? How is this different from an ICO?”
Instead of an ICO or the more familiar airdrop, the FCoin team has opted for a “unique” formula that is raising more questions every other day.
Token holders are rewarded for transacting on the exchange. A user gets 100% reimbursement equal to the total fees paid on the exchange in form of BTC or ETH.
On one side, it’s akin to buying the FT tokens using either bitcoin or ethereum. On the other hand, it can be seen as a promotional (therefore temporary) cash back reward program.
Even more controversially, the team has offered to distribute 80 percent of all fee collected to FT holders who HODL throughout the day.
FT token is only traded on the FCoin exchange, as it is yet to be added to any of the major platforms. FT/USDT currently sells at $0.31, which is 18 percent lower on its price 24 hours ago.
Cryptoverse is watching to see how this pans out in the long run. However, going by the recent high transaction volume, it is clear that the coin has quickly gained popularity around the globe.