OKExChain: A New and Exciting De-Fi

Education Research 31 August 2021
OKExChain: A New and Exciting De-Fi

On July 29th, OKEx finally launched the long awaited OKExChain with great success, securing more than 1 billion USD in TVL in under 24 hours. But what makes OKExChain special compared to other DeFi chains? Let’s dive into OKExChain and look into the opportunities it provided for investors.

About OKEx and OKExChain

OKEx is one of the biggest cryptocurrency exchanges in the world, attracting upwards of 15 billion USD in daily trading volume. It provided spot trading for up to more than 250 cryptocurrencies. OKEx also provides margin trading, derivatives, and staking.

Now, following the moves set by Binance with Binance Smart Chain (BSC), OKEx also released its decentralized finance chain called OKExChain (OEC).

DeFi has been and is still one of the most prominent trends in the crypto space. Since its genesis in Ethereum, many have made profits by trading through DEX or by yield farming. In 2021, the dominance of Ethereum was challenged by BSC which provided a lower barrier of entry with its lower gas fees. Other chains like Solana, Fantom, Polygon and Avalanche have also attracted numerous users. Other big names which will release DeFi in the future includes Polkadot and Cardano, all battling for dominance in the DeFi space.

Understandably, OKEx also wants to get a slice of the decentralized pie and the release of OEC could not come at a better time. With the increasing amounts of hacks, exploits and rug-pulls on BSC, many users are looking for a safer alternative to invest.

OKExChain claims to be a chain that is optimized for decentralized trading, boasting higher transaction speed and lower fees than the competitors. OKEx CEO Jay Hao claims that OEC performance superiority is suitable for high frequency trading, something that was hardly possible in decentralized exchange (DEX) due to the slow transaction and high gas fees. OEC is also compatible with Ethereum and Cosmos smart contracts, paving the way for wide number of currency listing and cross-chain application.

OKExChain uses OKEXChain Token (OKT) as a native token to validate transaction and for on-chain governance. Large OKT holders can become validators or delegate their token to validators for earning OKT new block minting and transaction fees. Holder of OKT will also have a governance vote on the future of OEC.

In the first month of its public operation, OKExChain has attracted many users trying to be early in what could possibly be the next big thing. In the first day, OEC reached 500 million USD in TVL. After 1 week the TVL peaked at 2.2 billion USD, and then stabilized at 1.1-1.2 billion US. That amount is miniscule compared to the staggering $95 billion and $21 billion of Ethereum and BSC, but it also means that there is a tremendous room for growth. Meanwhile, the list of decentralized applications (DApps) has been steadily increasing. With times, some big names in DeFi will certainly start to open their service in OEC and attract users of other DeFi chains.

OKExChain Data (August 21st, 2021)

Total Value Locked                                        : $1.14 billion (peak $2.24 billion)

DEX Transaction Volume (24H)                   : $220 million (peak $326 million)

Lending Borrowing Volume (24H)              : $55 million (peak $353 million)

Lending Depositing Volume (24H)             : $134 million (peak $950 million)

Decentralized Application (DApp)              : 40

Biggest DEX                                                     : CherrySwap ($620 million TVL)

Biggest Lending Platform                             : Flux ($65 million TVL)

Biggest NFT                                                     : FarmHero ($4.5 million TVL)

ParameterOKExChainEthereumBinance Smart Chain
Transaction per second1000*15100
Avg. Transaction Fee$0.003$5$0.4
Block Time4 sec13 sec3 sec
TVL**$1.14B$95B$21B
24H volume**$220M$4.8B$1.5B
*Theoretical upper limit   
**On August 21st, 2021   

OKExChain DApps

The whole point of a DeFi chain is the decentralized applications built on top of the network. Ethereum would not be what is is now without the hundreds of DApps like Uniswap, Aave, Compound, etc. And what is BSC without PancakeSwap? Here, we will have a look at some of the existing DApps on OEC, the backbones of the chain.

CherrySwap

If I have to describe CherrySwap in two words, it would be “PancakeSwap Clone”. It is obviously and unashamedly a fork of PancakeSwap. But that is probably what caused it to absolutely dominate OEC since the beginning. The familiarity of the user interface and experience attracts many users looking for another gem like CAKE and lower the barrier of entry.

Since the beginning of the OEC, CherrySwap always had the majority of TVL and trading volume of OEC. It currently has a TVL of 620 million USD, gobbling up roughly half of all the asset in OEC. Other DEXs like KSwap and BXH had their brief moment in the sun, but they were soon overtaken by the dominance of CherrySwap. If CherrySwap can keep its momentum going and maintain investor’s confidence, it could very well be the next PancakeSwap.

Besides having an exchange, CherrySwap also provided yield farming. The biggest yields are on the farms with the native token CHE, namely CHE-OKT and CHE-USDT at around 600% APR. Most of the liquidity are in farms with more established coin like BTCK-ETHK, BTCK-USDT, and ETHK-USDT, which makes sense as those pose lower risks, albeit with similarly lower returns. There are also single staking pools to earn CHE by staking CHE, USDT, BTCK and others.

However, the more interesting pools are the ones where we can stake CHE to earn other coins, similar to PancakeSwap. Currently we can earn DMX, OKFly and LOWB by staking CHE and this list will surely grow in the future as more DApps are created in OEC. This is a good sign because it maintains demands for CHE and reduces selling pressure.

Another interesting feature is the Initial Farm Offering (IFO). CherrySwap just released an IFO platform to allow people to buy newly released token by submitting CHE. CherrySwap also plans to create an NFT ecosystem in the future. This shows that the developers are serious and we could see further development which will increase the chance of CherrySwap becoming successful and early investors making big profits.

Flux

Lending is one of the most common application of DeFi, the most popular example being Aave. In OEC, lending platform has around 10% of the total TVL, with half of that belonging to Flux, the biggest lending DApp.

Flux is a multi-chain lending protocol which provided lending-borrowing service and also staking. It is built not only in OEC, but also in BSC, HECO, and Conflux Network, with Ethereum network coming soon. It has a total TVL of $90 million in all chain, with most of it in OEC at around $60 million.

The lending protocol are similar to Aave and compound. There are two side, the supply side and the borrow side. On the supply side, people can deposit their assets as collateral and earn interest. After depositing an asset, we can borrow against that asset and pay it back later with interest.

So, for example, if we are expecting that OKT price will increase in the future but we need the money for something else, we can borrow money using the OKT as collateral. That way, we can still enjoy the capital gain of OKT if the price actually increases.

The staking is similar to other staking platform. We can stake the native token FLUXK or OKT-FLUXK and USDT-FLUXK LP to earn FLUXK. The APR for single staking is only around 4-7%, but the LP staking has higher return at 110%.

Looking at the roadmap of Flux, there will be a really interesting feature in Flux V2, which is leveraged farming. It combines the borrowing protocol with farming to allow users to use up to 10x leverage to farm. Flux V2 has only been released in HECO network but soon it will come to OEC, BSC and Conflux.

FarmHero

Right now, NFT is having a renaissance. CryptoPunks, the original generative NFT art is reemerging in popularity and the price have been increasing exponentially with each purchase. Alongside it, other NFT art like Pudgy Penguins, Bored Ape, Fidenza, and countless other have also gained traction and been selling like hotcakes. It looks like a bubble which will certainly pop sometime, but until then, NFT will dominate the crypto space for some time.

On OEC, the biggest NFT platform is FarmHero. It is a cross-chain DeFi protocol that mixes NFT, gaming, and yield farming. It is also available in BSC and Polygon, but currently the highest TVL is found in OEC.

In FarmHero, there is the traditional yield farming. We can stake the native token GLORY to earn GLORY, CHE, or PND. There are also various pair of LP farms to earn GLORY, which currently boast 2000% APR. Although experience tells us that this will decrease in the future until it stabilizes in a more reasonable value. The ability to earn CHE and PND is a good sign because it provides some demand for GLORY.

The more interesting part of the FarmHero is the NFT. Unlike traditional NFT art, we can stake the NFT in an NFT farm to earn GLORY. This is what FarmHero means by combining NFT and yield farming. The art can generate passive income, not only to be resold for a capital gain. Beside that, the art is actually beautiful and interesting, which will attract many art enthusiasts.

The first type of NFT is the genesis series. The genesis NFT is unique in that it can generate passive income by staking it. We can buy the genesis NFT with OKT. There are currently nine genesis NFT, three for each chain. In OEC there are Diamond Farmers, Hero Laser Eyes, and The Mechanician. Each genesis has different price and APR. We can buy multiple of each if we want to increase our GLORY earnings.

Another type of NFT is the hero card. There are a couple of ways to get the hero card. The first way is through the Loot Box where we pay 100 GLORY to get a random hero card. If lucky, we could get a rare card which will yield a high price on the marketplace. The marketplace is the second way to get the hero card. There, we can buy a card directly from another owner for a certain price. Unfortunately, we cannot stake the hero card in the farms yet, but the feature will be available soon.

The gaming aspects seem to not yet be available in the OEC. Looking at the description of the game on BSC, there are two types of games, Auction Games, and FOMO Games. Both seems to be a variation of lottery, which are already commonplace in DeFi. If the gaming aspects were to be incorporated in OEC, this will surely attract more users.

OKExChain Token Price Analysis

Other than using the DApps, another way of betting on the success of OKExChain is by buying and holding the native token OKExChain Token (OKT). If OEC took off and gain a lot of users, the demand for OKT will also soar and the price will similarly rise.

Final Thoughts

We have seen DeFi takeoff in 2020 and 2021 and this is just the start. Many people have created generational wealth in DeFi. NFT in Ethereum is currently exploding again with the renaissance of CryptoPunks and the rise of other NFT art. Early users of PancakeSwap in BSC have made more than 100x profits when CAKE price rose from $0.3 in November 2020 to $40 in April 2021.

Sure, there are no guarantees that OEC will have the same success, but this is still a once in a lifetime opportunity to be early.  In hindsight, we all want to be the early bitcoin holder, CryptoPunks owner, and PancakeSwap farmer. Maybe in a few years, people will envy the early CherrySwap farmer or FarmHero collector. Only time will tell.

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