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OKX's Crypto Token Plummets 50% in Flash Crash Due to Liquidation Cascade
- OKX's Native Token Experiences Significant Slump
- OKB's Recovery and Trading Volume Increase
- OKX's Compensation Plan
- Flash Crashes and Crypto Markets
- OKB's Market Position
OKX's Native Token Experiences Significant Slump
OKB, the native exchange token of OKX, experienced a significant drop of over 50% within a three-minute period on Tuesday. This drastic decline was a consequence of a series of liquidations initiated by an irregular price shift.
OKB's Recovery and Trading Volume Increase
Despite the sharp fall, OKB managed to bounce back from a low of $25.17, climbing to $45.64. Alongside this, the trading volume over a 24-hour period skyrocketed by 2,100%, reaching $79 million, as data from CoinMarketCap showcases.
OKX's Compensation Plan
OKX confirmed its commitment to recompense users for losses incurred as a result of the liquidation cascade, including on-chain trades. In a statement, OKX said, The platform will fully compensate users for additional losses caused by abnormal liquidation, including pledge lending/margin trading/cross-currency transactions. Specifics of the compensation plan are to be announced within 72 hours. Furthermore, the platform intends to enhance spot leverage gradient levels and pledge lending risk control rules, as well as liquidation mechanisms, to prevent similar situations from occurring in the future.
Flash Crashes and Crypto Markets
Flash crashes are a frequent occurrence in crypto markets, predominantly due to thin liquidity often being distributed across multiple platforms. The 2% market depth for OKB is reported to be within $224,000 - $184,000, indicating that a sell order exceeding $224,000 could potentially trigger another price cascade.
OKB's Market Position
OKB boasts a market capitalization standing at $2.8 billion, securing its position as the fourth-largest exchange token currently in circulation, according to data from CoinGecko.
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