The OKB token is an instrument for interaction with various services as the native token of the OKX exchange. It drives many operations and functions on-chain and has advantages such as reduced fees, returns on investments, and the opportunity to invest in tokens. OKB is an ERC-20 token that operates based on the Ethereum blockchain. It was launched in 2019 and has a circulating supply of 300,000,000 tokens. This review is about the use cases of OKB, functions, advantages, and more.
History of OKB
OKB was introduced by OKX in May 2018 and designed as a vital part of the exchange’s ecosystem. The initial token supply was distributed strategically to support growth and stability. Specifically, 60% was allocated to ecosystem development and marketing, 20% to the team, and 10% each to shareholders and the OK Blockchain Foundation.
To manage supply and enhance value, OKX launched a buyback and burn program in May 2019. This program uses 30% of the trading fees from the Spot market to repurchase and burn OKB. The buyback and burn event takes place every three months.
OKB also plays a key role in the OKB Chain (OKBC), a Layer 2 zkEVM network developed by OKX. OKBC aims to use OKB as the settlement token for gas fees, boosting OKB’s utility in decentralized finance (DeFi) applications.
Key Use Cases of OKB
OKB serves several functions within and beyond OKX. Primarily, it offers fee reductions on trading activities. Based on their OKB holdings, users can enjoy up to a 40% discount on trading fees. This feature encourages users to hold more OKB, as higher balances result in lower trading costs.
The token is integral to OKX Jumpstart, a platform for launching new crypto projects. Jumpstart offers two models: Mining and On Sale. In the Mining model, users stake OKB to earn rewards for new tokens based on staking amounts and duration. In the On Sale model, users can purchase new tokens at fixed prices. OKB’s involvement in projects like TAKI, ELT, and BRWL highlights its importance in gaining early access to new projects.
OKB’s utility extends beyond the OKX platform through strategic collaborations with various service providers. For example, users can use OKB to access firms’ smart contract audits and risk monitoring services such as SlowMist and CertiK. OKB can also be used with digital service providers such as Bitpie and Blockto to complete transactions. In addition to being used as a payment method on OKX, OKB is also accepted as an online payment method in some e-commerce platforms.
OKB Function in OKX Ecosystem
OKB is an ERC20 token operating on the Ethereum platform. This compatibility allows users to transact with OKB without leaving their wallet or its ecosystem. By pairing OKB with major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Tether (USDT), OKX enjoys an active token market and maintains liquidity.
OKB Chain (OKBC) is a great step forward for OKX. This is an OKX Layer 2 chain to increase the speed and scalability in the OKX ecosystem. The OKBC optimizes Ethereum’s virtual machine (EVM) and brings high throughput using the Proof of Authority consensus protocol. The Tendermint consensus engine enhances OKBC’s growing DApp and transaction capacity. Integrating OKB into the OKB Chain could potentially bolster demand for the token as OKBC adoption increases across the ecosystem.
Another big role played by OKB is the OKX Earn program, which allows users to stake or deposit tokens to earn interest. The program gives flexible OKB deposits of up to 5% APR to hold and use the token.
Advantages and Limitations of OKB
OKB’s integration across different services offers clear benefits to users. It provides fee discounts, staking rewards, and cross-platform services, enhancing its value. The launch of OKBC’s mainnet was expected to increase demand for OKB, especially as it became the primary token for transactions on the chain.
However, the growth in OKB staking will rely on market performance in the OKX exchange together with the use of its Layer 2 option. The buyback and burn program also depends on the trading volume in the OKX platform; trading volume can be volatile and influenced by the market.
Conclusion
In conclusion, OKB serves as a fundamental component of the OKX ecosystem, offering versatile use cases and benefits for users. As a native token, it provides utility through trading fee discounts, access to new projects via Jumpstart, and opportunities for staking through the OKX Earn program.
The development of OKB Chain (OKBC) further enhances its value, transforming OKB into a key asset within the DeFi landscape. It facilitates faster transactions, scalability, and broader adoption. Despite its strong utility, OKB’s growth and success are closely tied to OKX’s trading volume and market dynamics, making it vulnerable to fluctuations. Additionally, its value is partly influenced by the effectiveness of the buyback and burn mechanism, which relies on consistent trading activity.
