Dormant OKB Wallets Stir, Suggesting OKX Buyback and Burn

A surge in activity from dormant OKB wallets suggests a potential buyback and burn event by OKX exchange. 1,968 wallets, inactive for four years, have transferred 33.23 million OKB worth $1.98 billion, mirroring a similar pattern observed in previous buyback and burn exercises by OKX.

Dormant OKB Wallets Stir, Signaling Potential Buyback and Burn Event by OKX

Up to 1,968 dormant cryptocurrency wallets holding substantial balances of OKB, the native token of cryptocurrency exchange OKX, have recently become active, indicating the possibility of another buyback and burn event by the exchange.

OKX's Buyback and Burn Model

OKX has adopted a buyback and burn model to enhance the value of OKB. According to data from crypto analytics platform Spot On Chain, the 1,968 wallets transferred 33.23 million OKB, valued at approximately $1.98 billion, as their first action after a four-year period of dormancy.

The motivations behind these transfers remain unclear due to limited information. However, historical precedents identified by Spot On Chain suggest the potential for a burn exercise.

Historical Precedent

On March 16, 2024, OKX bought back and burned 11.48 million OKB, worth approximately $748 million. Notably, 9.68 million of the burned OKB, valued at $631 million, originated from 539 wallets that had also been dormant for four years.

If this historical pattern holds true, OKX may allocate a significant portion of the $1.98 billion OKB recently transferred to a burn address.

Transaction Patterns

An analysis of the transaction log of the recently awakened OKB tokens reveals an intriguing pattern. The first 10 wallets transferred amounts ranging from 17,801 OKB to 17,790 OKB, while 1,948 addresses moved a combined 32,768,969 OKB. The remaining addresses transferred amounts between 15,815 OKB and 15,893 OKB.

Appreciation in Token Value

Spot On Chain's data indicates that all of the wallets have experienced significant appreciation in the value of their tokens based on their deposit price. Over the past four years, the aggregate value of the tokens in these wallets has increased by at least $1 million.

Burning as a Deflationary Model

Burning tokens to reduce their supply is a widely adopted deflationary model in the digital currency industry. Notable projects that utilize burning to enhance value include Terra Classic (LUNC), which recently surpassed the milestone of burning 100 billion tokens.

Shiba Inu (SHIB) also employs burning as a strategy to drive its projected rally to the 1-cent mark. The project plans to incorporate an automatic burn mechanism into Shibarium, its layer-2 scaling solution, to facilitate this process.

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