Token model of crypto asset debt is unsustainable? Behind it is the intractable debt problem of Web3 - ChainCatcher

Author: DeMan

OPNX, formerly known as GTX, is a new type of exchange co-launched by Su Zhu, Kyle Davies, the founders of Three Arrows Capital, and Mark Lamb, the co-founder of CoinFLEX, whose core innovation is to support the tokenization of Rekt debt. In this way, OPNX aims to streamline the claims process, create a public market for the trading of Rekt claims, and facilitate the release of trapped capital.

Despite initial challenges, such as the collapse of the Flex Token due to the suspension of CoinFLEX withdrawals in 2022, OPNX has found its footing in the market. At the beginning of 2023, with the news of GTX’s financing, the Flex Token ushered in a recovery, and the price rose to $2.8 at one point. However, when OPNX officially launched in early April 2023, the business data was not ideal, with only two transactions on the first day and a sharp drop in the price of Flex Token.

In June 2023, with the launch of OX and the synergy effect of FLEX, OPNX began to gradually recover and gradually occupy a place in the market. Since June, its trading volume and Market Cap have increased significantly, and its total Market Cap has reached nearly $700 million in June last year, surpassing many well-known exchanges.

Overall, the rise of OPNX demonstrates the dynamics of the crypto market and the importance of innovation. Despite the challenges of its infancy, OPNX has gradually established itself in the Crypto Assets trading space with its unique business model. Here’s an overview of the project and how it works.

Burdened with the legacy of CoinFLEX, OPNX has been unfavorable and bumpy

OPNX, in the Crypto Assets market, has experienced a series of challenges and countermeasures. Initially part of GTX and later renamed OPNX, the platform aims to innovate the way Crypto Assets are traded, but its journey has not been easy. Because this exchange has CoinFLEX genes, and many of the latter’s historical problems have been reluctantly taken over by OPNX, its development journey is destined to be bumpy.

CoinFLEX’s Liquidity Crisis and the subsequent compensation program marked an important turning point for the industry, in particular the issuance of rvUSD, which, while designed to alleviate the crisis, did not perform as expected in the market, with rvUSD showing only $0.15 on OPNX as of August 2022 without any Trading Volume, which clearly held back the OPNX project.

CoinFLEX’s restructuring plan has received broad support from creditors, demonstrating a certain level of market confidence in CoinFLEX’s future. After the restructuring, creditors received 65% of the company’s shares, and the CoinFLEX team was allocated 15% of the shares.

After the sale of the shares, the CoinFLEX team had a respite and began investing in 2023, and on January 16, Su Zhu and Kyle Davies and CoinFLEX planned to raise $25 million for the new Crypto Assets exchange GTX (also known as OPNX), but OPNX’s performance in the market was different than expected. When OPNX officially launched in April 2023, only two trades were completed on the first day, with a total trading volume of only $1.26.

To this end, OPNX launched the Market Maker Program to increase market activity, but faced challenges in terms of investor relations. In April 2023, OPNX claimed to have investments from a number of well-known institutions, but subsequently some institutions denied their investments in OPNX. This may have affected the market’s confidence in OPNX.

Despite the challenges, OPNX continues to explore new go-to-market strategies. For example, the partnership with Heimdall, the introduction of the Governance TokenOX, the launch of the Debt Trading feature, and the launch of the Justice Token. In particular, the Justice Token, which is defined as a meme Token, demonstrates the diversity of OPNX’s product design.

OPNX’s launch of oUSD and Launchpad projects, such as unsecured credit marketplaces Raiser and Gameplan, aims to increase user engagement and market influence. However, the market acceptance and effectiveness of these projects remains to be seen.

Taken together, OPNX’s history demonstrates the uncertainty and complexity of the Crypto Assets market. From the CoinFLEX crisis to the launch of OPNX to the adjustment of market strategy, OPNX’s journey reflects the challenges and coping strategies in a dynamic market environment. Although its future development is still uncertain, OPNX’s efforts are providing new perspectives and references for the development of the Crypto Assets industry.

OPNX’s vulnerabilities do not prevent investors from understanding its Token Economy model

When exploring the operation and influence of the OPNX platform, its platform Token $OX plays a key role. The supply and utility mechanism of $OX is critical to understanding the operation of the platform.

The total supply of $OX is closely related to $FLEX and is determined by the following formula:

Total Supply = ($FLEX Total Supply - Amount of $FLEX Burned) * 100. Using current data as an example, the supply of 986 million $OX is calculated based on 100 million $FLEX minus about 1.4 million $FLEX burned, multiplied by 100.

This calculation directly links the supply of $OX to the market performance of $FLEX. Let’s take a closer look at the mechanism of $OX.

1. Transaction Fee Rebate Mechanism: Users can reduce Transaction Fee by staking $OX. Users can enjoy 100% trading fee rebate when their $OX staking amount is equal to or higher than their OPNX trading volume; 50% trading fee rebate is provided for the portion of the staking volume in excess of trading volume; all rebates are paid in the form of $OX.
2. Trading fee discount: Even if users do not stake $OX, they can still enjoy up to 50% trading fee discount.
3. Additional Rewards and Incentives: Staking $OX also earns Airdrop rewards from OPNX Launchpad and Justice Tokens, and $OX can also be used as a Collateral for futures trading, drop fees associated with the Token of physical assets.
4. Conversion mechanism between $FLEX and $OX: $FLEX can be converted to $OX at a ratio of 1:100. If you choose to lock-up position for three months when converting, users can enjoy a preferential exchange ratio of 1:125 until August 28, 2023. Currently, about 35% of $FLEX has been converted to $OX. Since this is a one-way exchange mechanism, the price ratio of FLEX to OX should theoretically be 100:1. When the FLEX price falls below this ratio, the exchange for OX becomes a regulating mechanism that helps stabilize the price. Conversely, when the FLEX price is higher than this percentage, the Arbitrage space is limited by the inability to redeem OX back to FLEX.

Overall, the design of $OXToken on the OPNX platform not only influences traders’ behavior, but also has a significant impact on the platform’s Liquidity and market positioning. Through these mechanisms, OPNX seeks to create a reciprocal ecosystem designed to facilitate trading activity while maintaining a balance of value between Tokens.

Although OPNX’s future is uncertain, its innovative gameplay can provide a valuable reference for the industry

OPNX’s path reflects the huge gap between ideals and reality in the Crypto Assets space. As a theoretically innovative platform, its integrity and comprehensiveness in the field of debt trading is undoubtedly a bright spot in the market. However, when these ideas met the actual needs and reactions of the market, OPNX faced a number of challenges.

The low trading volume of Token Debt and the cold response to major initiatives such as FTX Debt reveal a deeper problem: limited market acceptance of such innovations. It’s not just a question of Liquidity or market perception, it’s about investor confidence and market maturity more broadly. In addition, while OPNX strives to motivate the market with frequent new feature launches and positive news, the quality issues of its launchpad program and critical feedback from the market further highlight its challenges in product development and market positioning.

Along with these operational difficulties, the high premium of OXToken reflects the market’s optimistic expectation of OPNX’s future potential. While this expectation has its positive implications, it can also pose risks, especially in the current market environment, where any failure to meet expectations could lead to a re-evaluation of its value.

As a Crypto Assets trading platform, OPNX faces many challenges, including market acceptance, product quality, and reasonable valuation. In the future, how OPNX responds to these challenges and adapts its strategy to better fit the market will be key.