This morning, the price of the OKB token on the OKX cryptocurrency exchange skyrocketed 136%. What are the reasons behind such a performance?
OKX’s OKB token soars
This morning, the price of OKX’s OKB token literally exploded upwards, and while volatility remains high, the asset is trading at $109.9 at the time of writing, up more than 136% in 24 hours:
While the TradingView index shows a high of nearly $149, different sources are contradictory, with CoinGecko data reporting a maximum of $135.32, which is a new all-time high (ATH).
To find the reason for such a rise, we must look to OKX’s latest announcement regarding a change in tokenomics. As a reminder, the cryptocurrency exchange launched its own layer 2 X Layer, whose mainnet opened in April 2024.
According to the new announcement, OKX will now focus on X Layer and gradually move away from OKTChain, a layer 1 blockchain compatible with the Ethereum Virtual Machine (EVM). By extension, OKT will be removed from circulation, and as of August 15, tokens will be converted to OKB at a rate proportional to the market.
However, the real reason for the rise lies in a massive OKB burn coming soon, with the total supply soon to be set at 21 million units:
OKX will destroy 65,256,712.097 OKB accumulated from historical buybacks and cash reserves in one go, and will switch to using a smart contract to automatically destroy all OKB transferred to the “black hole” address. Once this operation is complete, the total supply of OKB will be set at 21 million.
At the same time, OKB will no longer be available on Ethereum, but only on X Layer.
In a way, the market has therefore engaged in arbitrage. However, we would like to emphasize the temporary volatility of the token, which consequently increases the risks, while the sustainability of this increase remains largely unproven.
In any case, this announcement also provides some lessons.
As a reminder, OKX’s layer 1 was launched in 2020 during the previous bull run, shortly before we saw the creation of many new blockchains. For example, Binance launched its own network.
Today, OKTChain has been largely abandoned, with DefiLlama data showing only $8.84 million in total value locked (TVL).
In a similar vein, X Layer was launched amid the popularity of layer 2 solutions, when it was fashionable for every exchange to launch its own Ethereum scaling solution. For now, X Layer’s popularity is just as questionable as OKTChain’s, with just $6 million in TVL.
While OKB has been stagnating for months, this sudden surge of interest may well be nothing more than a flash in the pan.
