OKX, a mainstream exchange, experienced an abnormal fluctuation event on January 23rd, where its platform coin OKB plummeted by 50%. The official compensation plan was announced today, stating that eligible users will receive compensation in the form of USDT airdropped to their accounts before February 1st.
Summary:
OKX Exchange Responds to OKB Plummet: Will Fully Compensate User Losses and Address Margin Liquidation Cascade Effect.
Background:
OKX Platform Coin OKB Plunges! Market Slaughtered by 50%.
Table of Contents:
OKX Announces Compensation Plan: Airdrop of USDT.
Compensation for Losses Due to Low-priced Selling of OKB from Forced Liquidation.
Affected Users Seek Compensation for OKB.
On the evening of January 23rd, the platform coin OKB of mainstream exchange OKX experienced an unexpected and drastic drop of 50%, reaching a low of nearly $25 at one point. The official investigation results on the same day attributed this abnormal fluctuation event to “large-scale margin liquidation,” causing a chain effect of forced liquidation in some products.
At the same time, OKX officials promised to fully compensate for the additional losses caused by the abnormal liquidation, including pledge borrowing, leveraged trading, and cross-currency trading. They also pledged to further optimize the risk control rules and liquidation mechanisms for spot leverage and pledge borrowing to prevent similar issues from recurring.
In the early morning of January 26th, OKX officially announced the compensation plan for the OKB plummet event on its official website. The platform stated that it had adjusted relevant risk parameters regarding the abnormal fluctuation of OKB this week and will airdrop eligible affected users accordingly.
The accounts eligible for the airdrop distribution will include leveraged trades and positions involving OKB, current pledge borrowing and lending using OKB as collateral, and cross-currency margin accounts with OKB.
OKX will airdrop the funds in the form of USDT to the eligible users’ accounts before February 1, 2024.
In addition, the platform pointed out that the airdrop distribution to eligible users will cover “the price difference losses incurred by forced liquidation and low-priced selling of OKB,” as well as any fines and transaction fees related to forced liquidation. If there are multiple collateral assets involving OKB or full position liquidation of cross-currency associated contracts, related fines and transaction fees for selling other collateral assets and liquidating contract positions will also be included in the calculation of the airdrop amount. However, it does not include compensation already assumed by the platform’s risk reserve fund.
Note: Price difference loss refers to the difference between the price at 5:07:26 PM UTC+8 on January 23rd ($48.36 USDT) and the forced liquidation price, resulting in losses.
Regarding OKX’s compensation plan, some users responded that they “hope to be compensated for the amount of OKB they were liquidated at, rather than USDT,” while others complained that it is not a full compensation as “it only covers less than half since it was a leveraged liquidation.”
In terms of the coin price, after OKB plummeted by 50% to $25.1 on January 23rd, it quickly rebounded and oscillated above $45. Currently, the price has reached $51, experiencing a 6.7% surge in the past 24 hours, almost recovering the losses prior to the major fluctuation event.
Source: Trading View
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