Dormant wallets numbering up to 1,968 with sizable OKB balances have woken up, signaling another likely OKX buyback and burn event.
OKX as an exchange adopts the buyback and burn system as a model to boost the value of its native token OKB. Data from crypto analytics platform Spot On Chain shows that the 1,968 wallets sent 33.23 million OKB worth $1.98 billion as the first action conducted after a 4-year dormancy run.
The reasons behind the transfers remain uncertain as of press time due to limited information. However, precedents spotted by Spot On Chain show a potential burn exercise is possible.
Impending OKB Buyback and Burn
Per Spot On Chain, OKX bought back and burnt 11.48 million OKB worth $748 million on March 16. The intriguing trend is that 9.68 million of this burnt OKB, valued at $631 million, came from 539 wallets. Just like the 1,968 wallets, these 539 addresses had been dormant for 4 years.
If history repeats itself, OKX may divert a sizable chunk of the $1.98 billion OKB to the burn address.
The transaction log of the recently awakened OKB tokens also shows an interesting pattern. The first 10 wallets on transferred between 17,801 OKB and 17,790 OKB, while 1,948 addresses moved a cumulative 32,768,969 OKB. Meanwhile, the rest of the addresses moved between 15,815 OKB and 15,893 OKB.
1968 wallets woke up after 4 years of dormancy and sent back 33.23M $OKB (now $1.98B) to #OKX in the past 16 hours.
On Mar 16, OKX bought back and burned 11.48M $OKB ($748M), of which 9.68M $OKB ($631M) came from 539 wallets that had been dormant for 4 years, similar to the 1968… pic.twitter.com/H8cBOHYVN2
— Spot On Chain (@spotonchain) March 21, 2024
Per the Spot On Chain data, all of the wallets have seen their value soar based on their deposit price. Overall, the worth of the tokens in the wallets has increased by at least $1 million over the past 4 years.
Burning, a Major Deflationary Model
Burning tokens to reduce their supply is a major deflationary model many digital currency projects have adopted today. Among the projects that rely on burning to boost value is Terra Classic (LUNC). The project breached the 100 billion burnt token milestone recently.
Shiba Inu (SHIB) also relies on burning to usher in its projected rally to the 1-cent mark. To make this effective, the project hopes to incorporate an automatic burn mechanism to Shibarium, its layer-2 scaling solution.