The OKX cryptocurrency exchange recently announced a major change in tokenomics related to its native token OKB, causing its price to skyrocket.
According to on-chain data, the exchange has since carried out a massive burn estimated at $35 billion.
The development of the cryptocurrency sector is based on rules and procedures that can sometimes be difficult for newcomers to understand. Among these is token burning, which is mostly carried out to control the amount of tokens available. Bitcoin imposes a very clear vision on the ecosystem, with a deflationary approach to the management of its BTC, the number of which will be limited to 21 million units. This figure has become symbolic, in contrast to projects where the number of tokens available sometimes exceeds all comprehension.
This reality was clearly taken into account in the latest update of the OKX platform, regarding its planned abandonment of the OKTChain blockchain—and its OKT token—in favor of the development of its layer 2, called X Layer.
The main consequence of this procedure is a change in the available quantity of its native OKB token, which is now set at 21 million units. Should we highlight the direct reference to Bitcoin? In any case, investors seem motivated, following a 180% increase over the last 7 days.
OKX burns $35 billion
According to official information recently published by the OKX platform, the modification of the tokenomics of its OKB token effectively involves the simple and definitive destruction (burn) of a significant amount of its currently available units.
OKX will conduct a one-time burn of 65,256,712.097 OKB accumulated through historical buybacks and cash reserves. The exchange will then switch to using a smart contract to automatically burn all OKB transferred to a “blackhole” address (destruction address). Once this operation is complete, the total supply of OKB will be set at 21 million units.
Vitalik Buterin
At the time of publication, the announced burn of 65,256,712.097 OKB represented $3 billion. A few hours later, fueled by the speculative frenzy, it was already worth nearly $10 billion.
Finally, available on-chain data indicates that this OKB token burn involved a total of 278,999,999 OKB, currently estimated at… over $35 billion ($26 billion at the time of writing).
Following this 14-fold reduction, the total supply of OKB cryptocurrencies effectively fell from 300 million to 21 million units. This situation gives hope that the rise in its price represents a kind of mechanical movement, due to the effect of scarcity. Only time will tell.
