The Tron Ecosystem (TRX) has granted a credit facility to FTX to provide a selection of tokens for investors to exit the platform. This band-aid solution will unfortunately require a financial sacrifice, due to the decorrelation of these assets on FTX compared to their real value.
Tron offers FTX users a way out
FTX announced late today an agreement with the Tron ecosystem (TRX) to allow users to withdraw their funds, at least in part.
The following tokens will be made available to FTX via a credit facility to unlock withdrawals:
- TRX ;
- BTT ;
- JST ;
- SUN ;
- HT.
This measure has been active since 19:30 Paris time and these assets will be replenished at regular intervals to allow everyone to evacuate their funds as they go.
Please note, however, that it is clearly stated that the bridge will allow the transfer of these tokens to external portfolios on a one-to-one basis. This means, for example, that 1 TRX = 1 TRX, regardless of the price at which it was purchased on FTX.
This is therefore an important parameter to take into account, because in this case the price of the TRX on FTX is totally uncorrelated with the real value of the asset. And for good reason, while the price of the token is around $0.058 at the time of writing, it is trading at over 34 cents on FTX:
TRX price on FTX platform
This is because even before the official announcement, it was possible to withdraw funds in dribs and drabs from FTX to the Tron ecosystem, causing many investors to convert their holdings to TRX to leave the platform.
But such a practice is not without danger, because to do so in order to go to Binance, for example, would mean agreeing to divide one’s capital by about 6 at current prices. It is then up to each individual to make the choice that is deemed appropriate.
A freeze on deposits on the platform
If we used TRX for the previous example, this applies to all tokens involved in the credit facility that Tron provided to FTX. An investor who does not want to take the risk of waiting for all the funds to be released will unfortunately have to take a heavy devaluation of his assets to be able to jump ship.
To limit this exit door to only those who really need it, FTX has frozen all deposits on its platform. This prevents arbitrage transactions from being carried out.
The only entries that are now allowed on FTX are deposits made by the Tron teams themselves.
The initial budget for this operation is $13 million, and supplies will be made weekly according to a schedule to be announced.
At this time, we are unable to say if and when all withdrawals will be reopened. In the meantime, investors who had confidence in FTX have this alternative if they wish, but it is a difficult choice to make.
