OKEx CEO Jay Hao reveals the magic behind and explains how the company overcomes the recent market crash and COVID-19 outbreak.
It is the worst of times for the global economy. Almost every major economy is inescapable from the outbreak of coronavirus, aka COVID-19. The recent stock market shocks and oil price war are fuelling the economic hardship of the world. The fear of recession is rising.
It is the best of times for the cryptocurrency market. Despite a few days of uncertainty, the crypto market is picking up quicker than many thought. Given that the global equity markets are now in troubled waters, more people are turning to crypto for opportunities, bucking up Bitcoin, the benchmark cryptocurrency and a unique blend of both risk and safe-haven asset, amid the pandemic.
Jay Hao, the CEO of OKEx, one of the world’s largest cryptocurrency exchanges, just managed to lead the company out of the recent roller-coaster ride in the crypto market under the coronavirus and financial market shadows.
Looking back at the week-long meltdown of the cryptocurrency market, Bitcoin suffered a record 50% price plunge. Extreme volatility like this is always a test to crypto exchanges as traders tend to flux into hedge or trade for opportunities, subsequently overloading an exchange’s system and causing service outage. While many of its peers, unfortunately, did not overcome it during the crash, OKEx held up the fort.
As Hao sailed OKEx through uncertain waters, OKB, issued by OK Blockchain Foundation and adopted by the exchange as global utility token, remained one of the best performers during the selloff.
OKB is the bridge connecting OKEx trading platform and its users. Originally planned to supply one billion tokens in total, Hao announced in February to burn the 700 million unissued OKB in the meantime of the launch of OKChain, OKEx’s public blockchain, testnet prior to the 2nd anniversary of the token. Having promised no more OKB issuance in the future, OKEx has turned the token into the world’s first fully circulating platform token.
To ensure the stability of the token’s value, OK Blockchain Foundation is committed to an “absolute deflation” of OKB as their executives frequently stress in public. Starting from 2019, OKEx has been using 30% of its trading fee income from the spot market to repurchase and burn OKB. So far, 17,161,709.06 OKB (approx. US$60 million in value at writing time) has been burned in seven rounds of burning over the past nine months.
Accessibility is another goal OKEx is aiming at. To allow wider market support of the token, OKB has established eight fiat gateways with US Dollars, Euros, Korean Won, Vietnamese Dong, and Indonesian Rupiah. Currently, OKB is listed on over 50 crypto exchanges covering 153 countries and territories, trading against 100 other cryptocurrencies.
Hao is confident about the decision of burning OKB, though he admits it was not an easy decision to arrive at considering the short-term loss in profit for the company. Their decision was so far-reaching in a way that OKEx itself no longer holds any OKB, meaning all staff bonuses in the token will have to be repurchased from the market, which is a fairer approach to traders.
Why OKB has attracted supporters from all over the world? For traders, a core motive is the entitlement of OKEx’s generous fee schedule, which requires holding only 200 OKB to participate. The more OKB one holds, the greater the discount one can enjoy. The exchange has set a cap on OKB holding amount for discounts at 2,000 OKB, which, according to Hao, is to minimize hoarding and speculation – which is observed from many other exchange tokens. “If you want to speculate, OKB is not the token for you,” said Hao. Instead, he encourages those who have faith in the OKB ecosystem should show their support by holding, but not trading.
Other benefits of holding OKB include the right to take part in OKEx Jumpstart token sale, earning interest by staking OKB, and becoming a C2C trading merchant.
There is one more prominent benefit for OKB holders. In the upcoming launch of OKChain mainnet, 100% of OKT, the blockchain’s native token, in the genesis block will be mapped to all OKB holders according to their holding proportion. More information regarding this is expected to be released as the launch draws close.
Hao believes the OKB ecosystem is developing healthily. The token has been adopted by 38 partners for a wide range of applications spanning from payments, loans, cybersecurity, to travel, entertainment, social networks, and gaming. Additionally, OKB holders will have the chance to participate in the governance of OKChain and become a node.
Given the impressive progress the token has achieved, the journey is not all rainbows and unicorns for the CEO. But Hao does not shy away from talking about the lows of OKEx’s history.
In a recent interview, he addressed the exchange’s past temporary outages and accusations of fraud and made things as transparent as he could. On the whole, OKB is not “just another exchange token” for the exchange to make some extra bucks. Time has proved that OKEx is a forward-thinking company that has paved the way silently for both infrastructure and ecosystem to sustain a promising growth. The impressive performance of the exchange and the token during the recent market crash is evident.
Despite being called “dead” many times, the crypto market is still hanging in there as always. The recent financial crisis is the first test to crypto as an asset class. While many are looking forward to the market recovery, the development of OKEx and OKB is also noteworthy. As Hao suggested on Twitter on March 17, we should be looking on the bright side: “Read and exercise more, spend quality time with family, clear the mind and prioritize things” – and perhaps spending some more time studying cryptos, too?