The Proposal That Could Have Changed Crypto
In the world of cryptocurrency, missed opportunities are as common as bad puns at a dad convention. In 2019, Changpeng Zhao, or CZ as we like to call him, received a peculiar proposal from none other than Sam Bankman-Fried, or SBF, who was then the rising star of the crypto universe. The idea? A futures exchange with zero risk. Sounds like a pitch from a start-up in the 90s promising ‘free money,’ doesn’t it?
High Leverage and High Stakes
FTX wanted to redefine the futures trading scene by creating a platform that could liquidate users’ positions at the earliest hint of trouble, essentially being the ‘overprotective parent’ of crypto trading. The concept seemed golden: traders could leverage their investments while minimizing exposure—ideal for a volatile market that swings faster than an over-caffeinated toddler.
The Game of Risk
- Traditional Futures Trading: It typically allows traders to play with a fraction of their funds, but it comes with collateral that may be subject to increase if things go south.
- FTX’s Approach: They wanted to watch the traders like hawks, ensuring that liquidation happened before any bad debts could pile up.
However, the idea came with an air of skepticism. CZ, viewing the long-term picture, decided that it wasn’t worth a $40 million investment. Instead, he opted to develop a similar futures platform without SBF’s colorful participation.
The Fallout: A Collision of Goals
As it turned out, this fork in the road wasn’t just a
