Crypto Exchange OKX Burns Record Number of Tokens
Crypto exchange OKX has recently made headlines with its record-breaking number of tokens burned. Over the past two months, the exchange has permanently destroyed approximately 5.5 million OKB tokens worth $258 million. This article will explore the significance of this event for the cryptocurrency industry.
Record Amount of Crypto Burned
The tokens were withdrawn from circulation through OKX’s Buy-Back & Burn program. Since 2019, the exchange has burned a total of 64 million OKB tokens. Of the initial 300 million tokens, only 236 million remain. While the number of tokens burned over the past two months is not a record, the amount it is equivalent to certainly is. In comparison, between June and September 2019, 6.1 million OKB tokens were burned, but this was only worth $14.6 million at the time.
Once the tokens have been burned, they are moved to a wallet that nobody can access, making them permanently out of circulation. Coin owners often burn tokens to prevent the inflation of a cryptocurrency. Burning tokens usually causes an increase in the price, but this isn’t the case at present, likely due to the other crypto news dominating the market.
Exchange Tokens in Trouble
Exchange tokens, including OKB, have been struggling lately after Binance and Coinbase were sued by the SEC. Binance’s BNB token declined from $286 to $235 in a few days, and OKB was similarly affected, dropping from $46 to $41 last week.
OKX previously made headlines when it revealed its reserves at the end of November 2022 after the FTX drama. The exchange announced that it had $7.2 billion in reserves, more than enough to provide for all its customers. At the time, the company claimed to have the largest amount of clean reserves of any crypto exchange, meaning that the reserves consist purely of currency and cryptocurrency that do not belong to the exchange itself. OKB does not, therefore, fall under their reserves.
In conclusion, OKX’s record-breaking number of tokens burned is a significant event for the cryptocurrency industry. Burning tokens can prevent inflation, and this often leads to a price increase. However, the current market is also affected by other crypto news that may distract from the event’s magnitude. Exchanges such as Binance and Coinbase have recently been sued, and their exchange tokens have suffered as a result. OKX’s large clean reserves provide a measure of security for customers, although OKB does not fall under these reserves.