"The second growth curve" opens the era of diversified growth for OKX

Author: Grapefruit, ChainCatcher

Editor: Marco, ChainCatcher

The cryptocurrency market closed 2023 with a thriving scene, but the exchange industry experienced tumultuous changes throughout the year, with waves of layoffs, ongoing negative news regarding regulatory compliance and hefty fines, and even leading players in the industry facing significant setbacks.

In the same arena, OKX took a different path this year, not only leading in recruitment among CEXs but also steadily increasing its market share. Its spot and derivatives trading have ascended to become one of the top three exchanges globally. According to the "2023 Web3 Recruitment Market Trends" report released by Tiger Research on January 5, OKX hired over 700 people in 2023, surpassing Binance and ranking first among global CEXs.

Additionally, data from The Block shows that OKX's market share has risen from 4.9% at the beginning of 2023 to 9.4%.

2023 has been a remarkable year for OKX, making it the biggest winner in the exchange arena, with its market share consistently climbing, and the OKX Web3 wallet becoming a model product in the industry.

Meanwhile, the price of OKB has also been reaching new highs, with its performance becoming the best asset in the annual exchange platform token sector.

OKX's success is a victory for years of focused product development, maintaining a steady approach to its core business while strategically positioning itself in the Bitcoin ecosystem, ultimately achieving great success in new hot sectors.

Market Share Doubles Year-on-Year, OKX Becomes the Second Largest Trading Platform Globally

With the approval of Bitcoin ETFs and the approaching halving narrative, the cryptocurrency market seems to have completed its cycle of bull and bear, entering a new phase of reconstruction. As cryptocurrency exchanges serve as the gateway for users into the crypto world, they are also experiencing a reshuffling of the market landscape, with significant structural changes occurring in centralized exchanges in 2023. Amid this change, OKX not only maintained its leading position but also saw its core trading business market share double year-on-year.

According to the latest data from The Block, the monthly spot trading volume for cryptocurrency exchanges in December 2023 was $1.1 trillion, with OKX's spot trading volume for that month reaching $87.45 billion. In contrast, OKX's spot trading volume in December 2022 was only $38.29 billion, marking a year-on-year increase of 128%.

Furthermore, in the Asian market (non-USD supported markets), OKX's market share has risen from 4.93% in January 2023 to 9.42% now, an increase of about 5 percentage points compared to the same period last year, nearly doubling.

In terms of spot trading volume, OKX has long secured its position as the third largest cryptocurrency exchange globally, with Binance and Upbit in the first and second positions, respectively.

In the derivatives market, according to CCData statistics, OKX's derivatives trading volume in November 2023 was $660 billion, a month-on-month increase of 53.8%, making it the best-performing trading platform for that month. Considering both spot and derivatives trading data, Binance's market share dropped from 60% to 42%, while OKX's market share grew from 9% to 21%.

Overall, combining spot and derivatives trading volumes, OKX has now become the second largest cryptocurrency asset trading platform globally.

Behind the Growth of OKX Trading Data: Emphasis on Fund Security and User-Centric Approach

The growth of OKX's trading data is partly due to the decline in market share of its competitors. According to CCData, OKX and Bybit are the two biggest beneficiaries of Binance's market share drop. In November 2023, after eight months of accusations and lawsuits against Binance, which concluded with hefty fines, risk-averse funds began to flow out massively, causing its platform market share to drop to around 30%.

During this period, the data growth of OKX and Bybit was quite evident, with their market shares rising to 20.2% and 11.9%, respectively, reaching historical highs. Notably, OKX's spot and derivatives market share increased from 9% to 20.2%. Clearly, both platforms absorbed users and funds that flowed out from Binance, with OKX emerging as the major winner.

OKX's ability to attract such a large outflow of funds and users is attributed to the high recognition and trust from users, which is underpinned by OKX's continuous investment in technological innovation and its unwavering commitment to ensuring user asset security as the platform's top priority.

OKX regularly discloses its Proof of Reserves (PoR) data to users, which verifies whether user assets are held in a 1:1 reserve at the cryptocurrency exchange, demonstrating its solvency and sufficient liquidity.

As of December 13, 2023, OKX's PoR has been published 14 times, covering up to 22 cryptocurrencies, with each period's fund guarantee rate exceeding 100%.

On January 3, OKX released its 14th PoR, stating that as of December 13, 2023, the asset reserve rates for the OKX wallet were: BTC: 103%, ETH: 104%, USDT: 103%.

In terms of product experience, OKX adheres to a user-demand-oriented approach, prioritizing user experience, keeping pace with market developments, and continuously innovating, earning the reputation of being "the trading platform that understands users the most." For instance, in early 2023, when airdrop events were popular, OKX quickly launched a batch address generation feature for users. According to the "2023 CEX Market Report" released by 0xScope, the number of new deposit addresses added by OKX has rapidly increased since 2023, likely due to its feature of generating multiple deposit addresses for each account.

Moreover, according to OKX's 2023 review data, over 10 new features and products were launched last year, including Shark Fin, Snowball, Seagull, Yield Hunter, Strategy Copy Trading, Spot Copy Trading, and Reverse Position Opening, covering structured finance, strategy trading, and other business lines, creating a diverse product matrix to help users with different risk preferences enhance their asset returns.

In terms of regional expansion and compliance in exchange operations, OKX has also been actively deploying.

With the clarification of regulatory policies in Hong Kong, OKX established "OKX Hong Kong" in March 2023, marking the beginning of its license application process. Relevant personnel revealed that OKX has entered the final stage of obtaining a virtual asset service provider (VASP) license in Hong Kong, expected to receive final approval between March and June this year. In June 2023, OKX's Middle East branch obtained the MVP preparatory license issued by the Dubai Virtual Assets Regulatory Authority (VARA).

The recruitment data from OKX also indicates its expansion in the Asian market. According to Tiger Research's "2023 Global Web3 Market Recruitment Trends," OKX ranked first in global CEX recruitment this year, with the majority of hires in Asia, covering expansion markets including Hong Kong, India, South Korea, Australia, Thailand, and Malaysia.

《Global Web3 Job Postings Analysis》

Despite the fierce competition in the exchange sector, OKX has leveraged years of technological accumulation and a user-first philosophy to continuously refine its products, keep pace with market developments, and launch a diverse range of trading varieties and innovative tools to meet various investment preferences and trading methods of users.

At the same time, OKX has always prioritized user experience and security. These initiatives have earned the trust and recognition of users, helping to attract more users and traders, and have allowed OKX's exchange business to grow steadily, solidifying its position as the second largest exchange for spot and derivatives trading.

OKX Web3 Wallet Actively Embraces the Bitcoin Ecosystem, Creating a "One-Stop Web3 Gateway"

If you ask, "What was OKX's most standout product this year?" the answer is undoubtedly: the OKX Web3 wallet. If OKX's core trading business made steady progress in 2023, the OKX Web3 wallet is a product that has helped it gain a competitive edge over its rivals.

The decision to integrate "exchange and wallet in the same application" has made OKX a true one-stop gateway platform for "DeFi + CeFi" and "on-chain and off-chain worlds," successfully building its own moat.

OKX Web3 integrates a one-stop Web3 gateway that includes DEX, NFT markets, earning coins, and Dapp exploration, embedded within the exchange app, allowing users to access both centralized and decentralized worlds on a single platform.

As of December 31, the number of public chains integrated with OKX Wallet has exceeded 80, covering 120,000 digital assets, with plugin wallet downloads surpassing 400,000.

According to Dune data, since the OKX Web3 wallet NFT platform announced its integration with the Ordinals market in May last year, supporting features such as inscription minting, engraving, sending, and receiving BRC-20 and BTC NFTs, its market share in the Ordinals space has steadily increased from an initial 0.3%. Following the second boom of the Bitcoin ecosystem in November, OKX's Ordinals market share has consistently maintained above 80%, with daily trading market share exceeding 90% on November 9, nearly monopolizing the Bitcoin Ordinals ecosystem.

https://dune.com/domo/ordinals-marketplaces

As of January 9, the total trading volume completed in the OKX Web3 wallet Ordinals market has reached $1.13 billion, accounting for approximately 45% of the total trading volume of $2.15 billion for the Ordinals protocol. Additionally, other data from the OKX Ordinals market is also impressive, with 134,000 unique addresses and a total of 616,000 transactions.

https://dune.com/cszeth/ordinals-marketplace-okx

In terms of market share, the OKX Web3 wallet has become the largest BRC20 inscription and BTC NFT trading market within the Bitcoin Ordinals ecosystem, with approximately 16,000 BRC-20 and Ordinals assets available for users to trade.

Under the influence of the Bitcoin Ordinals craze, the OKX NFT market has consistently surpassed OpenSea in trading volume in November and December 2023, becoming the second largest NFT market.

With the success of the OKX Web3 wallet, exchanges have even begun to pursue built-in wallets, with competitors like Binance and Bitget announcing their own built-in Web3 wallets.

From the current operational results and user experience, the OKX Web3 wallet stands out as the most successful product in the exchange wallet sector. However, this success is not a result of a sudden burst but rather the outcome of continuous market cultivation, rooting, refining, and timely user feedback.

Kyle Chen and Jason Wang, heads of OKX Web3 products, stated in an interview that being able to seize market opportunities is not solely due to efforts in the past year but is the result of sustained development and foundational work over the past few years.

They explained that, for instance, although the Web3 wallet seems to have been established for just over two years, its technical architecture began deployment five years ago. In addition to ongoing technical development, based on years of exchange business experience, OKX has accumulated an efficient method for user interaction, product optimization, and iteration. From discovering the Bitcoin ecosystem to reporting to upper management and finally making project decisions, OKX only took one or two weeks.

Moreover, the OKX Web3 team's ability to quickly capture market trends is attributed to the presence of many crypto OG users within the team, who are both product users and product managers and developers.

This is further confirmed by Kyle Chen, head of OKX Web3 products, in his personal 2023 work summary posted on social media.

In his summary, he wrote that PMs review all competitors' product updates weekly, listen to technical colleagues share the principles of 2-3 new protocols, and discuss product design plans and technical implementation paths together. Many team members are Web3 degens and OG users who actively participate in the market, timely discovering trends and opportunities, and bringing them back to the team and product design. OKX's product managers are active users in various communities, allowing them to empathize with frontline users and continuously improve OKX's product experience.

It is precisely for this reason that the OKX Web3 wallet dares to make accurate predictions about the development prospects of the Bitcoin ecosystem and promptly choose to support BRC-20 tokens and delve into the Ordinals ecosystem.

The innovative integration of exchanges and wallets within the same application not only lowers the entry barrier for traditional users into the Web3 world and simplifies operational steps but also opens up a new growth curve for OKX beyond trading business, making it one of the most popular user entry products in this wave of the Bitcoin ecosystem, ushering in new traffic growth dividends and serving as a major driving force behind OKX's significant data growth.

OKB Annual Growth Ranks First Among Platform Tokens, Application Scenarios Continuously Expanding

As an investment target capturing the development value of cryptocurrency exchanges, the performance of platform tokens can reflect the development status and performance of the exchanges to some extent. The growth of exchange business and the success of the OKX Web3 wallet are naturally reflected in the performance of OKB, which saw an annual increase of 136%, making it one of the best-performing assets among all platform tokens in 2023.

As the platform token of OKX, OKB soared from $26 in January 2023 to a peak of $64.89 on November 15, achieving an annual increase of 135%. It has since fallen to $54.19, but the annual increase still exceeds 100%, making it the best-performing platform token asset of 2023.

The expected value of platform tokens can typically be measured through two aspects: one is derived from platform trading volume and profits, with token buyback and burn data directly reflecting the current earnings status of the platform; the other is the future market growth potential, such as the ability to continuously attract new traffic, market share situation, whether the product can lead the Web3 market, and whether the exchange maintains safe and stable operations.

The OKX Web3 wallet has garnered users and reputation for OKX, opening up a ceiling for market growth.

Regarding the buyback and burn of platform tokens, exchanges typically allocate profits or revenues to buy back or burn a certain amount of platform tokens regularly.

On December 14, 2023, OKB completed its 22nd burn, with over 10.52 million tokens burned, equivalent to approximately $630 million. Throughout 2023, there were a total of four burns, with a cumulative burn of 27.35 million tokens, amounting to nearly $1.5 billion based on the closing price of $54 on January 10.

In addition to performance support and positive reputation from product innovation, the application scenarios of OKB are continuously expanding, allowing participation in IEOs, fee discounts, and serving as the gas token for the Layer2 network X1. In November 2023, OKX announced a partnership with Polygon CDK to jointly launch the zkEVM Layer2 network X1, declaring that the platform token OKB will serve as the native token for the X1 network, usable for paying gas fees on the network.

In the last bull market, platform token BNB rose to become one of the top ten crypto assets due to the empowerment of the BSC chain.

"Exchange + Web3 Wallet" Dual Growth Curve Opens a New Era of Diverse Growth

Historically, the cryptocurrency trading sector has primarily focused on trading business. However, in recent years, with the development of on-chain applications and the popularity of DeFi, crypto users' activities are no longer limited to CEX platforms; instead, their demand for on-chain interactions has increased. Trading platforms are also seeking new growth points beyond trading business, actively exploring and deploying various crypto projects, personally engaging in chain creation, wallet development, or participating in the incubation of popular projects.

In this current market cycle, the integration of OKX's exchange and wallet is undoubtedly the most successful example. The wallet, serving as a "traffic entry" into the decentralized world, perfectly integrates with the exchange, which acts as the center for CeFi asset activities, not only opening up a growth ceiling for the exchange but also providing convenience for users, allowing access to two different worlds through a single application.

Currently, while OKX continues to grow its core trading business market share, the second growth curve of the OKX Web3 wallet is becoming increasingly clear and has grown into a new growth point. Through the "exchange + Web3 wallet" dual growth model, OKX has further widened the gap with its competitors.

At the same time, OKX's capital arm, OKX Venture, is actively making strides in project layout and asset management, diligently selecting quality projects and assets.

According to the crypto data platform RootData, OKX Venture has publicly participated in nearly 30 investment projects in 2023, including well-known projects like LayerZero, Sei, Taiko, DappOS, and Mocaverse, covering areas such as NFTs, cross-chain, Layer2, the Bitcoin ecosystem, and DeFi.

On January 9, OKX Ventures also met with Stephen Chow to discuss new scenarios combining Web3 with film and entertainment.

OKX has now become a platform that integrates trading, decentralized products, and capital, serving as both the activity center for user trading and the entry point for on-chain users, while also providing quality asset management.

Today, the OKX platform has gathered a range of excellent product lines, ushering in a new era of diverse growth, with all product lines advancing together, creating a vibrant ecosystem on the OKX platform that remains impressive across various niche sectors.

OKX's achievements in 2023 have not only set a new benchmark for the trading industry but also laid a solid foundation for future development. The main tasks ahead will focus on internationalization, compliance, and most importantly, security, while continuing to promote its product roadmap, which will be the key to OKX's invincibility.