In a sudden turn of events, OKB, the native token of crypto exchange OKX, experienced a steep drop in value on Tuesday, plunging by more than 50% to a low of $25 in just three minutes before stabilizing.
OKX swiftly launched an investigation into the root cause of the abnormal price fluctuation, later issuing an update suggesting that the volatility was triggered by liquidations set off when the price moved lower after a general decline in the market.
According to the exchange, when the price of OKB hit $48.36, multiple large leverage positions were liquidated, which further liquidated pledged loans and cross-currency transactions. “The platform will fully compensate users for additional losses caused by abnormal liquidation, including pledge lending/margin trading/cross-currency transactions. The specific compensation plan will be announced within 72 hours,” the OKX team stated.
To prevent similar incidents in the future, OKX plans to optimize spot leverage gradient levels, pledged lending risk control rules, and liquidation mechanisms. Following the dramatic price drop, trading volume for OKB surged over the last 24 hours, according to data from CoinMarketCap. At the time of writing, OKB is trading at $47.66, up from the lows of $45.55 following the flash crash.
