What is OKEx?

By Wendy Clack

OKEx is a popular–if controversial–cryptocurrency exchange with a major emphasis on derivative products like futures trading. It also has its own token, OKB. Below we explore more about how OKEx got started.

Investor Star Xu created the cryptocurrency exchange OKCoin in 2013, aimed at the Chinese market. In 2014, he created OKEx, which is for more advanced traders. With China’s hard-line stance against cryptocurrency exchanges–which has softened somewhat more recently–OKEx relocated to a nation with far fewer regulations–Malta. However, officially the company is registered in the Seychelles.

What is OKEx?

OKEx is a leading cryptocurrency exchange, with more than $1 billion in daily trade volume. Apart from normal token trading, OKEx offers a host of derivative products like futures trading. 

Who created OKEx?

OKEx was founded in 2014 in China by Star Xu. He comes from the world of programming, with stints at Yahoo and Alibaba before founding OKEx. He is also the founder of cryptocurrency exchange OKCoin. 

A brief history

• January 2014 – Star Xu founds OKEx
• May 2017 – Chris Lee takes over as CEO
• April 2018 – OKEx launches its own utility token, OKB
• May 2018 – CEO Chris Lee leaves to join Huobi Global
• May 2018 – the exchange became the world's largest by reported turnover.
• July 2018 – the exchange forced an investor to liquidate its position on bitcoin after it exceeded the exchange's insurance fund.
• Jan 2020 - COO Andy Cheung resigns to launch blockchain consultancy.

What’s so special about it?

• 💶 Fiat to crypto – Some exchanges only let you trade for cryptocurrencies if you already have cryptocurrencies. Not so with OKEx. You can change government-issued money (like the Euro) for cryptocurrencies right on the platform.
• 💧 Liquidity – It is currently the third biggest cryptocurrency exchange by trade volume. With that much buying and selling, it should theoretically be easy to sell assets.
• 🔁 Pairing options – OKEx offers trading with more than 100 kinds of tokens.
• 🚫 Delisting tokens – OKEx claims to be the first exchange to offer a ‘delisting’ function to get rid of sketchy tokens.
• 🏛 Regulation – OKEx is hyperaware of regulation and wants to avoid angering governments. That’s why it has banned all customers from 13 countries, including the United States and Hong Kong.

How is OKB produced?

OKEx has a utility token known as OKB. In total, there are 1 billion OKB tokens produced. The company says 60% of those are given to OKEx users “for community building through marketing campaigns.” Every Friday, they give half of the service fees they collect to OKB holders as a bonus. This “Happy Friday Program” is set to last for two years.

Of the remaining supply of OKB, 10% are to cover operations, 10% are for initial investors, and 20% are for the team.

How does OKB work?

OKB is a utility token that is mainly used on the OKEx platform. The company plans on expanding the token’s use by having it available on other exchanges in future. Historically it was an Ethereum token, but in 2020, it's due to move over to its own blockchain.

What can you do with OKB?

If you use OKB to make a trade on the OKEx platform, you can get a discount on trading fees. Holding OKB also entitles you to voting rights. The more OKB you hold, the greater the weight your vote carries.

The future

OKEx has an interesting reputation to say the least. It is currently ranked as the number two cryptocurrency exchange by trade volume – second only to Binance.

Yet, it faced several accusations of shady practices in 2018. One is that 90% of the trade volume is fake – boosted by actions like wash trading. OKEx certainly wasn’t the only one mentioned in the article by writer and investor Sylvain Ribes, but it seemed the most guilty.

OKEx was also accused of market manipulation and fraud for the way it forced early settlement of Bitcoin Cash futures. The settlement happened the day before Bitcoin Cash split into two different currencies, and some traders claim they lost thousands as a result. OKEx denies any wrongdoing.

This year things look a bit brighter for the business. It's due to launch its own decentralized exchange (DEX) built on top of its own blockchain, called OKChain, which will use the OKB token as fuel for transactions.

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