Lately, everyone sets eyes on exchange tokens, especially OKB, the utility token of OKEx because of the amazingly high profits it brings to holders and its recent leap in ranks. While Huobi announced their new buy-back & burn policy last weekend, OKEx has already released the 7th buy-back and burn report this Monday. Let us compare the several exchange tokens and understand what makes OKB special and the reasons of its jump in price.
The OKB Buy-back and Burn scheme
OKEx announced their buy-back and burn scheme for the currently circulating 300 million OKB on May 4, 2019. They use 30% of transaction fee income from the spot market to buy back OKB and send them to a black hole address to burn. A total of seven rounds of Buy-back & Burn has been executed with a total of 17,161,709.06 OKB burned. The current circulation is 282,838,290.94 OKB. Last round of buy-back & burn was initiated between Dec 1, 2019 and Feb 29, 2020. The amount of OKB bought back and burned is 3,183,344.61, equivalent to $17,500,000.
Reducing supply by buying it off the market looks like one of the things investors are looking for in cryptocurrencies. Now, let’s take a look on what other exchanges did.
OKB | HT | BNB | |
Total amount | 300M | 306M | 200M |
Circulation | 282M | 2.39M | 108M |
Shares held by the team | 0 | 31.64M | 74.29M |
Buy-back from | Second market | Second market + shares held by the team | shares held by the team |
Price | $5.58 | $4.75 | $20.8 |
It’s clear that the price of BNB is the highest among the three major exchanges. However, it also implies that OKB and HT have a huge rising potential. Besides, after burning all 700 million unissued OKB, OKB has become the world’s first fully circulating platform token and entered an era of absolute deflation.
How OKChain empowers OKB
OKChain is a decentralized commercial public chain with OKT as its native token. The newly issued OKT acts as the base token for OKChain’s DPoS consensus. It will first be issued in its genesis block and an additional 1–5% of OKT will be issued every year.
OKB is OKEx’s utility token that supports the development of the OKEx ecosystem. A one-off issuance of 300 million OKB was completed in 2018, and there will be no further issuance in the future. So, here comes the question that why OKEx issued OKT instead of OKB as the native token of OKChain? DPOS consensus mechanism is the key. As a newborn public chain, OKChain needs to motivating international users to sustain its highly autonomous ecosystem, which means a continuous token issuance scheme is needed. OKT is designed to fulfil this demand. However, deflation is necessary for OKB to protect the interests of its holders.
Hence, if an exchange token is used as the native token of public chain, it may encounter obstacles in maintaining the interests of exchange token holders or the development of the public chain. It is worth noting that, OKEx is the only exchange who found this fundamental contradiction between exchange token and native token of exchange-owned public chain.
Will OKT affect the price of OKB directly in the future? The answer is no, their prices will be determined by different sets of factors.
The OKT price is based on the development of the OKChain ecosystem, including OKEx DEx, DeFi applications, and its future development.
The price of OKB is determined by the business performance of OKEx, development of the ecosystem infrastructure, expansion of its trading channels, as well as the OKB Buy-back and Burn scheme.
Yet developments of their own chain will give OKB investors an indicator on the company’s performance and whether it fulfills its plans and milestones, which could lead to a higher price for both OKT and OKB.
As a token of gratitude to the OKB community, they will map 100% of the genesis block OKT to all OKB holders according to their OKB holdings. In the future, both OKB and USDK will be migrated from the Ethereum ERC-20 network to the OKChain mainnet. Once the OKChain mainnet is live, OKT trading will be available. OKB holders will have the chance to participate in the governance of OKChain and become a super node.
The OKB ecosystem
The company constantly implement new use cases for OKB to transform it from an exchange token to a cryptocurrency with true value. Lately, OKEx has partnered with Portto, a Taiwanese contract wallet company to support the storage of OKB in their product – Blocto. OKEx also partnered with Cool Wallet, a global hardware wallet company to add OKB there.
They have joined Hoo, a public chain asset cloud exchange to expand storage for OKB. As of today, OKB has formed partnerships with 9 industry-leading wallets, including Ledger Vault, Bitpie, Mirthril, Kcash, Pocket, and Cobo and it looks like the company won’t settle there.
Apart from that, OKB now supports spot margin trading with up to 3x leverage as well as Savings service internally and has established collaborations with a total of 35 partners around the world, covering dozens of daily scenarios such as payment, transactions, trading service software, wallets, loan & finance, cybersecurity, tourism, lifestyle, entertainment, social networking, e-contracts, O2O, and games.
While it is crucial to expand its ecosystem, getting listed on exchanges and enhancing market liquidity are of great importance. This is why they have listed OKB on other exchanges, such as Bitlocus, the European C2C exchange with OKB/EUR pair, and CoinBene with spot crypto trading. OKB is also available on 8 fiat gateways, including US dollar, Euro, Korean Won, Vietnamese Dong, Indonesian Rupiah, etc., and is now listed on over 50 trading platforms that covering 141 countries and regions, such as industry leaders Bitmax and Bitfinex.
To encourage community engagement, OKEx has organized 27 community events, including campaigns, AMA, and airdrops to make promote OKB token among users.
The Rise of OKB Value
It looks like the reasons for OKB’s constant price rise is dependent on many factors. If you want to buy or understand OKB further, we advise you to visit OKEx exchange, or talk to their customer support for assistance.
Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involves significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.