- OKB rallied by around 200%, peaking at over $139, as OKX announced its upcoming token burn.
- The event on Friday will take out over 65 billion of the token’s circulating supply to cap its total supply to 21 million.
- It also comes with significant updates within the OKX ecosystem.
OKB, a token linked to the OK Blockchain Foundation and OKX trading platform, rose by around 200% from a $46.58 low to a $139.76 high in the last 24 hours. This surpassed the cryptocurrency’s all-time high of $73.82 in March 2024 by 89%.
The token has settled at around $106 per unit by around 4:00 AM Thursday (UTC time) to a market cap of $6.4 billion. However, its trading volume continued to soar by over 16,000% as $1.4 billion worth of its supply moved across wallets and crypto exchanges.
OKB’s rapid rise on Wednesday coincided with the surprise announcement of OKX regarding its upcoming burn event on Friday. This came alongside several upgrades within the crypto trading platform’s ecosystem.
The OKB Token Burn
According to OKX, it will execute a one-time burn tomorrow, August 15, to limit OKB’s supply to 21 million tokens. The event will lead to 65,256,712.097 OKB heading to a blackhole address, meaning the tokens will be lost from circulation forever.
The supply came from OKX’s historical repurchases and treasury reserves. The batch will automatically burn as the network switches to using a smart contract.
Token burns basically involve permanently decreasing the supply of a crypto asset in circulation. These result in scarcity in the circulating supply of a digital asset, which often drives up the price of the remaining tokens. Usually, these events also encourage long-term holdings or HODLs as the deflationary measure gives investors a sense of optimism that their tokens will become more valuable over time.
OKX noted that it will remove OKB’s minting and burning capabilities after the abovementioned operation.
The OKX Upgrades
In addition to the OKB token burn, OKX rolled out several upgrades, starting on August 5. The first was the integration of the latest version of the Polygon CDK (formerly zkEVM) for its “PP upgrade” to boost technical performance and support more developments within its network.
The move increased its transactions per second (TPS) to 5,000, reduced gas fees, and established more alignment with the Ethereum (ETH) mainnet. Moreover, it rolled out enhanced support and functionalities for decentralized finance (DeFi), global payments, cross-chain bridges, and real-world asset (RWA) token issuances.
Furthermore, the trading platform unlocked more perks from its OKX wallet, exchange, and payments solutions. It introduced a zero gas fast withdrawal feature for one-click gasless transactions with USDT and other assets utilizing the X Layer, a Layer 2 (L2) chain built under the partnership of OKX and Polygon Labs.
Final Thoughts
Token burns generally cause heightened optimism for investors. However, this is not always the case. Sudden changes in market conditions, including but not limited to investor sentiment, macroeconomic events, regulations, and competition, could easily dispel bullish outlooks.
Furthermore, OKB quick climb in the charts has driven its 14-day Relative Strength Index indicator (RSI) to heat up to 94 points, which is way above the 70 overbought zone. This suggests the high likelihood for an imminent pull back for the token. On the other hand, sustained buying pressure could cushion a potential correction and continue to push its value higher.
With numerous factors at play with contrasting outcomes, investors should tread the market carefully. Readers shouldn’t take any of these as financial advice or a recommendation to buy any asset. Instead, they should conduct their own research before executing their trades, or better, consult an investment adviser who will match their risk portfolio with their strategies.
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