OPNX has generated a considerable amount of noise since its launch in April. But initially, the noise wasn’t very positive. Many users were quick to discredit the tokenized bankruptcy claims platform due to its ties to 3AC founders, Kyle Davies and Su Zhu.
And at first, it seemed the initial outcry may have had a substantial impact.
OPNX opening day garnered a measly $13.64 in total trade volume. But now after a few months, how do things measure up? Well, it seems to be making a big comeback.
The State of OPNX
Some key indicators show OPNX has managed a largely successful turnaround and recovery from its underwhelming launch. The biggest of these is, of course, the daily trading volume, which has grown exponentially to cross the $100 million mark.
Also, there is an increasingly positive attitude towards OPNX. This can be seen from the fact that the value of the platform's token, the Open Exchange (OX) Token, has seen nearly 10x growth in value over the same period.
How OPNX progress is gaining steam
Success for an exchange is largely about attracting as much liquidity as possible. This involves bringing in users.
Back in April, in response to a tweet on OPNX’s slow start, Su Zhu said the platform will not rely on internal and external market makers to bring in liquidity. It will, instead, look to build liquidity brick by brick. To do this, the platform embarked on an aggressive marketing campaign.
This seems to have been the right move. Its efforts have, so far, earned the OX token a devoted following of token holders and stakers collectively referred to as “The Herd.” And fortunately for everyone involved, the campaign isn’t all hype.
The OX token has inherent utility and value accrual mechanisms that appeal to both high-frequency traders and DeFi degens alike. These mechanisms have helped the platform retain most of the liquidity brought in by its marketing campaigns.
Rewarding traders for staking OX tokens
OPNX has found interesting ways to incentivize and reward OX stakers. These include an opportunity to trade for free on the platform.
OPNX traders will secure a 100% rebate on trading fees if their staked OX as a percentage of the total staked OX is equal to, or greater than, their trading volume as a percentage of total OPNX trading volume. For example: If a user has 1% of the total staked OX and their trade volume on OPNX is less than or equal to 1% of the total OPNX trade volume, they will receive a 100% trading fee rebate.
Additionally, OPNX says stakers benefit from a “Bonus Staking Multiplier” during the first year proceeding launch. This will allow traders to secure a 100% trading fee rebate on a trading volume percentage equivalent to up to 12 times their current staked OX tokens.
These mechanisms can be judged as a move to encourage high-frequency traders to accumulate and stake OX tokens. In doing that, they continually increase their capacity to trade for free on OPNX, which gives them bigger incentives to remain on the platform.
Targeting DeFi through staking
OPNX has often said that one of its goals is to extend beyond traders and reach the DeFi community. To do this, it looks like the exchange has implemented a staking mechanism that unlocks opportunities to earn yield in the form of Real World Assets (RWAs) and launchpad tokens.
The RWAs in question include the tokenized bankruptcy claims the platform was created to help trade as well as Justice Tokens (JTs), tokenized representations of real-life defamation cases. While tokenized bankruptcy claims are a real draw for many, there is still a fair amount of skepticism about the latter. In the Justice Token whitepaper, JTs are referred to as “independent meme tokens with no intrinsic value, no backing, and no expectation of return.”
On the other hand, Launchpad tokens come from the projects that OPNX, through its ecosystem partner 3AC Ventures, invest in via their Launchpad initiative. This initiative has, so far, brought in RaiseR, a platform for permissionless credit issuance and secondary market liquidity, and Gameplan, a sports metaverse venture. A portion of the tokens from these projects will be given freely to OX stakers.
Transforming stakers into partners
OX holders can stake their OX tokens for periods ranging from 2 weeks to 1 year. In return, they receive voteOX tokens, which grant them the right to participate in the governance of the platform. They get to vote on crucial exchange parameters like fee structures, token listings, and other essential mechanisms. And the longer one stakes their tokens, the greater their governance power becomes.
This is similar to the gauge voting system used by DeFi protocols like Curve Finance and Yearn Finance. It essentially transforms traders into partners, further building incentive alignment between a platform and its users.
Accepting staked OX as collateral
Through another feature inspired by DeFi, OPNX has incorporated staked OX as collateral for its portfolio margin product. This will allow users to use staked OX to trade perpetual contracts on OPNX while also reaping yield in the form of RWAs and Launchpad tokens.
OPNX did this with the goal of converting yield hunters into active traders on the platform. Given the massive increase in trading volume, it's fair to say that they succeeded.
Before and shortly after its launch, many people doubted OPNX’s potential for success. A good amount of this skepticism was well-founded given the platform’s pioneer status and the history of its founders.
Over the past couple of months, OPNX has picked itself up and gathered a lot of momentum. It has leveraged innovative mechanisms to attract and retain investors and traders to its platform. This has allowed it to soar to heights that very few would have predicted.
While there is still a long way to go, it won’t be unreasonable to conclude that OPNX will most likely attract crypto holders’ attention for the foreseeable future.