Wednesday, March 29, 2023

What is Tesla Token and is it safe?

At the time of writing, the crypto verse was a bit backstage. Bitcoin, arguably his heart, which fell below $30,000, had eased some of the damage. Altcoins like Ether and Dogecoin have also gained momentum in the past 24 hours.

Apart from bitcoins and altcoins, there are other categories of crypto verse as well. A non-fungible token (NFT) represents a blockchain-registered title on some independent asset. Another less popular asset is the tokenized stock of any stock trading on a traditional exchange such as the Nasdaq.

The crypto exchange, FTX, has listed Tesla’s tokenized stock for trading. Come and know.

Tesla Token Stock or Tesla Token

FTX claims that the tokenized stock offered is backed by trading shares on a traditional exchange. The Tesla Token, available on FTX, tracks the stock price of Tesla (TSLA).

At the time of writing, the Tesla Token stock was trading at around $750 USD. It had registered a gain of over three per cent in the last 24 hours. FTX says the Tesla token is backed by shares of Tesla, which it holds with an independent brokerage firm. It is claimed that token holders can redeem their holdings against the underlying Tesla shares.

Trading in Tesla tokens is said to be available at all times similar to trading in crypto 24×7.

Tesla Token Availability

FTX has clearly mentioned on its website that residents of the US cannot take advantage of its services. Other nations that FTX says it provides services to are Cuba and North Korea.

In addition, the crypto exchange says that services have been partially restricted in some other jurisdictions, including Canada, Hong Kong and India. It is expressly declared that users located in the Canadian province of Ontario may not use FTX services.

The availability of Tesla tokens, which trade on FTX, therefore depends on the user’s location.

Is Tesla Token Safe?

FTX claims to maintain custody of Tesla stock to back the Tesla token listed on it. Recently, the fall in the value of a stablecoin, TeraUSD (UST), has worried many crypto watchers. Stablecoins are pegged to a fixed asset such as gold or fiat currency. By that measure, the value of UST, which is pegged to the US dollar, should always be US$1.

At the time of writing, UST traded below US$0.2, indicating weakness in the crypto market. How the Terra ecosystem maintains its reserves to support the value of UST is said to have caused trouble.

Tesla tokens may not be completely immune to such risks.

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The Tesla Token, offered by FTX, tracks the Tesla stock price. It is claimed to be backed by Tesla shares, which FTX says it holds with a third-party entity. The UST stablecoin crash episode is a reminder that caution is essential in the crypto-verse.

Risk Disclosure: Trading in cryptocurrencies involves high risks, including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. The prices of cryptocurrencies are extremely volatile and can be influenced by external factors such as financial, regulatory or political events. The laws that apply to crypto products (and how a particular crypto product is regulated) may change. Before deciding to trade in financial instruments or cryptocurrencies you must be fully informed of the risks and costs associated with trading in the financial markets, carefully consider your investment objectives, level of experience, and risk appetite and Where necessary, seek professional advice. Kalkine Media cannot represent or guarantee that any information/data provided herein is accurate, reliable, current, complete or appropriate to your needs. Kalkine Media will not accept liability for any loss or damage caused by your business or your reliance on the information shared on this website.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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