Crypto Exchange OKX's Token Suffers 50% Flash Crash Amid Liquidation Cascade

The exchange said that it will compensate impacted users within 72 hours.

AccessTimeIconJan 23, 2024 at 3:32 p.m. UTC
Updated Mar 8, 2024 at 8:20 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

OKX's native exchange token (OKB) slumped by more than 50% in just three minutes on Tuesday following a series of liquidations triggered by an abnormal price fluctuation.

OKB has since recovered from a low of $25.17 to $45.64, with 24-hour trading volume rising by 2,100% to $79 million, according to CoinMarketCap.

  • Aptos' APT Token Down 52% in April After Booming March: VanEck
    01:08
    Aptos' APT Token Down 52% in April After Booming March: VanEck
  • Key Events You Shouldn't Miss at Consensus 2024
    02:13
    Key Events You Shouldn't Miss at Consensus 2024
  • What to Expect From Consensus 2024
    11:19
    What to Expect From Consensus 2024
  • Will Solana and Altcoins Dominate the Market Next?
    13:29
    Will Solana and Altcoins Dominate the Market Next?
  • The exchange confirmed that it will compensate users for losses caused by the liquidation cascade, including on-chain trades.

    "The platform will fully compensate users for additional losses caused by abnormal liquidation, including pledge lending/margin trading/cross-currency transactions," OKX wrote on X. "The specific compensation plan will be announced within 72 hours. We will further optimize spot leverage gradient levels, pledged lending risk control rules and liquidation mechanisms to avoid similar problems from happening again."

    Flash crashes are common in crypto markets as thin liquidity is often distributed across multiple venues. Two percent market depth, which measures the amount of capital required to move an asset by 2%, is between $224,000 and $184,000 for OKB, meaning that a sell order of more than $224,000 could cascade price again.

    OKB has a market cap of $2.8 billion, making it the fourth-largest exchange token in circulation, according to CoinGecko.

    Edited by Aoyon Ashraf.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Oliver Knight

    Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.