The Past and Present of OPNX — From Bankruptcy Alliance to a Hundredfold Increase
Originally named GTX, OPNX was introduced by Su Zhu and Kyle Davies, founders of Three Arrows Capital, in collaboration with Mark Lamb, a co-founder of CoinFLEX. The exchange supports trading of bankruptcy claims, spot, and futures derivatives. Its goal is to simplify the claims process and establish a public market for claim trading, thus releasing trapped capital. OPNX has tokenized bankruptcy claims for trading on an order book platform, allowing these claims to be used as collateral for contract trading.
I. Development Timeline
June 2022: Cryptocurrency derivatives exchange CoinFLEX faced a liquidity crisis and announced the suspension of withdrawals.
July 2022: CoinFLEX introduced a compensation plan for its users, which included issuing rvUSD (Recovery Value USD) representing the value of the debt, compensating users with CoinFLEX shares, locked FLEX tokens, and further distributing existing funds. The current price of rvUSD on OPNX is $0.15, with no trading volume since August.
August 2022: CoinFLEX filed for restructuring in the Seychelles court. The restructuring plan was approved with almost 99% voting support. Creditors would own 65% of the company shares, with the CoinFLEX team allocated 15% of the shares. Series B investors would also continue to be shareholders in the restructured company.
January 16, 2023: The Block reported that Su Zhu and Kyle Davies, in collaboration with CoinFLEX, planned to raise $25 million for a new cryptocurrency exchange named GTX.
March 7, 2023: @DefiIgnas tweeted that GTX had successfully raised $25 million, a claim which Su Zhu confirmed by retweeting. In the same thread, @DefiIgnas stated that OPNX would acquire all of CoinFLEX’s assets, including its personnel, technology, and tokens; FLEX would be their primary token; and there might be a brand reshaping similar to AAVE/LEND.
March 9, 2023: GTX was renamed to Open Exchange (OPNX).
April 4, 2023: Open Exchange (OPNX) officially launched, supporting cryptocurrency spot and derivatives trading. On its first day, there were only two transactions with a total trading volume of $1.26.
April 8, 2023: Open Exchange (OPNX) introduced a Market Maker Program to incentivize liquidity providers. The main incentives are:
Up to 200 VIP market makers can receive a $5,000 subsidy monthly.
Incentives based on trading volume ranging from $5,000 to $50,000 monthly.
April 21, 2023: OPNX tweeted that its investors included AppWorks, Susquehanna (SIG), DRW, MIAX Group, China Merchant Bank International (Hong Kong branch), Token Bay Capital, Nascent, Tuwaiq Limited, and more. However, the following day, DRW, Nascent, MIAX, and Susquehanna (SIG) all denied investing in OPNX. AppWorks officially tweeted that they hadn’t invested in OPNX directly, but their stake in CoinFLEX was transferred to OPNX. It’s reasonable to speculate that these investors were originally CoinFLEX’s investors and were passively converted to OPNX shareholders, misleadingly described as strategic investors for the new project.
May 2, 2023: Open Exchange (OPNX) announced its collaboration with Heimdall, a real-world asset (RWA) tokenization service provider, to launch a claims trading market. Heimdall would handle the verification, transfer, and tokenization of real-world assets for OPNX users. After verification, all claims would be transferred and stored in a Special Purpose Vehicle (SPV) dedicated to each platform. Tokens would then be issued against the trust and credited to the claimant’s account, with claim tokens reflecting a proportional ownership share in the trust’s claims.
June 1, 2023: Open Exchange (OPNX) introduced its governance token OX and its corresponding governance platform, The Herd. OX staking durations included options of 2 weeks, 1 month, 3 months, 6 months, and 1 year. Similar to Curve, the longer the staking duration, the more voteOX tokens one would receive, and the corresponding staking rights would be greater.
June 4, 2023: OPNX announced the launch of its claims trading feature.
Based on the operating instructions of OPNX, tokenizing debt for trading requires three steps:
1. Create an OPNX account and complete KYC (Know Your Customer) verification.
2. Provide detailed debt information and submit a debt transfer application.
3. Sign a debt transfer agreement.
Once the above steps are completed, you can trade debt tokens on OPNX.
The platform currently supports bond trading for Celsius and FTX, but there’s minimal trading volume.
On June 12, 2023, OPNX introduced the Justice Token. This is a series of tokens issued based on specific risk events, with each token having a total issuance of 1 billion. 75% of the total supply will be allocated to OX pledgers within six months, 20% to JT-OX liquidity providers, and 5% to the Milady community. The white paper explicitly states that the Justice Token is a meme token, with no intrinsic value, no underlying asset support, and no expected returns. Two Justice Tokens, DUDAS and FTM, have been launched to date, with annual returns for OX pledgers being 8.9% and 13.2%, respectively. The total liquidity pool for the two tokens is only $40,000 and $10,000 respectively.
On June 24, 2023, OPNX announced the launch of oUSD, a stablecoin pegged 1:1 with USDT. oUSD can be used as collateral, and all profits and losses from futures trading are denominated in oUSD. Profitable traders will have a positive oUSD balance and can convert their oUSD profits to USDT through the oUSD/$USDT trading pair. Traders with losses will have a negative oUSD balance (interest payable) and will need to purchase oUSD to repay the negative balance. If the price of oUSD exceeds $1, users are motivated to sell, and when it’s below $1, users with a negative oUSD balance have an incentive to buy to repay their positions at a cheaper rate, ensuring the stability of oUSD’s price.
On June 25, 2023, OPNX announced the launch of its first Launchpad project, the uncollateralized lending market, Raiser (RZR). All OX pledgers share 10% of the RZR supply allocation. The product hasn’t launched yet. RZR went live on OPNX on July 17 with an initial price of 0.164 USDT, but there has been no trading volume to date. On Uniswap, RZR has a liquidity of around $250,000, with recent daily trading volumes of approximately $10,000.
On July 26, 2023, a month after the first launchpad, OPNX announced its second Launchpad project, Gameplan, a new sports metaverse venture by UFC champion Khabib Nurmagomedov. The investment is led by 3AC Ventures, and some GPLAN tokens will be allocated to OX pledgers. Users can own tokens of their favorite sports teams and contribute to the team’s management,strategy, and other related decision-making processes through token voting. Currently, Gameplan only has a presence on Twitter and Discord; there’s no official website or white paper available.
On August 6, 2023, according to sources cited by Bloomberg, OPNX proposed to inject the equivalent of $30 million in FLEX digital tokens into the now-bankrupt Singaporean crypto lending platform Hodlnaut.
II. Token Economics
1. Total Supply
e total supply of the OPNX platform token $OX is calculated as: $OX Total Supply = ($FLEX Total Supply — $FLEX burned) x 100.
9.86B = (100M — ~1.4M) x 100.
Currently, approximately 70% of OX is staked.
2. Token Utility
(1) Trading Fee Reimbursement
OX allows users to trade for free by staking. If the proportion of OX staked by a trader equals or exceeds their proportion of total OPNX transactions, they receive a 100% trading fee rebate. Those exceeding the free trading volume receive a 50% rebate on the remaining transaction fees. All trading fee rebates are paid in OX to token holders.
(2) Trading Fee Discount
Non-staked OX users can also enjoy up to a 50% discount on trading fees.
(3) Stakeholders receive airdrop rewards of OPNX Launchpad & Justice Tokens.
(4) As Collateral for Futures Trading
(5) Significantly Reduced RWA Tokenization Fees.
3. $FLEX-$OX Conversion
$FLEX can be optionally converted to $OX at a 1:100 ratio. If one chooses to lock their tokens for three months during the conversion, they receive a 25% bonus, making the conversion rate 1:125. This promotional conversion rate will end on August 28, 2023. Currently, about 35% of $FLEX has been converted to $OX.
In theory, the FLEX:OX price should be 100:1. As it’s a one-way conversion mechanism, the FLEX price shouldn’t fall below OX. When FLEX’s price is lower than this ratio, users tend to convert it to OX, balancing FLEX’s price back to this ratio. If FLEX’s price exceeds this ratio, users are less inclined to convert. However, since OX can’t be reverted back to FLEX, arbitrage actions are incomplete.
III. Price Performance
In June 2022, CoinFLEX announced a suspension of withdrawals, resulting in a sharp decline in the value of Flex.
By January 2023, upon the financing news of GTX, Flex made a strong comeback with its price entering an upward trajectory, peaking at $2.8.
In early April 2023, Open Exchange (OPNX) was officially launched. The business data was disappointing with only two transactions on its first day, causing the price of Flex to plummet after being listed on OPNX, dropping by more than 70%.
On June 1, 2023, OX was launched, and FLEX, in collaboration with OX, re-entered the upward trajectory. From June 5 onwards, there was a significant price surge, with two launchpad news causing increases of approximately 33% and 14% respectively. Since the beginning of the year, the price has increased a hundredfold. From a market capitalization perspective, OPNX is nearing $700 million, surpassing Bitget’s $640 million, Gate’s $560 million, Kucoin’s $540 million, and Huobi’s $410 million.
In terms of business data, OPNX’s daily trading volume rapidly increased from single digits to over $100 million shortly after its launch. The majority of the volume occurred in futures trading, with spot trading volume only in the tens of thousands, far less than Bitget, Gate, Kucoin, and Huobi. Furthermore, there’s inconsistency between the trading volume and price fluctuations of OPNX, raising questions about the authenticity of its data.
IV. Credit Trading Track
Currently, the two other major players in the cryptocurrency credit trading market are Xclaim and Claims-Market.
Xclaim was established in 2018 with the aim to provide transparent pricing and quick execution for cryptocurrency claimants. Its CEO, Matthew Sedigh, has 15 years of experience in the corporate restructuring industry. Xclaim offers credit trading for five bankrupt platforms: Genesis, FTX, BlockFi, Celsius, and Voyager, with discounts ranging from 20% to 40%. They have executed 1,070 trades totaling approximately $356 million, primarily on a case-by-case basis.
Claims-Market is an investment bank Cherokee Acquisition’s claim product, catering to all credit trading users, not just crypto-specific ones. The trading process involves sellers signing a “Seller Agreement” and a “Simple Assignment of Claim (SAC)” before listing their credits. Buyers sign a buyer’s agreement, choose suitable quotes or bids, and upon trade completion, the SAC and all evidence are sent to the buyer, confirming ownership. Claims-Market also introduced a “Simple Pass Through Assignment (SPTA)” to facilitate secondary claim trading. According to the platform’s data, creditors have sold $190 million in credits through 294 transactions.
Product-wise, OPNX’s attempt to create a high-liquidity standardized order book market and credit collateral features are unique, something the former two platforms lack.
V. Conclusion
Conceptually, OPNX is the most comprehensive in the credit trading track. However, in practical operations, tokenized credit trading volume is extremely low. The FTX credit listing didn’t turn things around for OPNX. Although OPNX often releases various empowering news and has consistent positive news, the quality of its launchpad projects has been criticized. In terms of valuation, OX has a relatively higher premium compared to other exchange platform tokens.
Reference
https://support.opnx.com/en/articles/7235394-market-maker-program
https://opnx-public-files.s3.ap-northeast-1.amazonaws.com/pdf/oUSD+Litepaper.pdf
https://www.bitpush.news/articles/3592124
https://www.theblock.co/post/202589/3ac-zhu-davies-new-crypto-exchange
https://opnx.com/ox-white-paper
https://ox.opnx.com/justice_tokens.pdf
https://twitter.com/OPNX_Official/status/1653128166326652929
LD Capital is a leading crypto fund who is active in primary and secondary markets, whose sub-funds include dedicated eco fund, FoF, hedge fund and Meta Fund.
LD Capital has a professional global team with deep industrial resources, and focus on develivering superior post-investment services to enhance project value growth, and specializes in long-term value and ecosystem investment.
LD Capital has successively discovered and invested more than 300 companies in Infra/Protocol/Dapp/Privacy/Metaverse/Layer2/DeFi/DAO/GameFi fields since 2016.
website: ldcap.com
twitter: twitter.com/ld_capital
mail: BP@ldcap.com
medium：ld-capital.medium.com
