Loki

OKX releases an investigation and explanation regarding the FLOKI staking borrowing mechanism issue

ChainCatcher message, OKX officially released an investigation and explanation regarding the FLOKI staking borrowing mechanism issue, as follows:Q1: Why does automatic currency conversion occur under the condition of safe staking borrowing risk rate? What are the specific rules for automatic currency conversion?OKX's spot collateral borrowing is a C2C market that matches deposit users and borrowing users, based on the fundamental operating principle of 100% reserve. When the platform's borrowing amount/deposit amount reaches 100%, it triggers the platform's automatic currency conversion mechanism. The triggering of the automatic currency conversion mechanism depends on the borrowing and deposit amounts of all users on the platform, and is unrelated to the staking risk rate of individual users. When automatic currency conversion is triggered, in order to quickly reduce the risk for all borrowing users on the platform, users will be graded based on their borrowing amounts from largest to smallest, with the group of users with the highest borrowing amount being prioritized for system automatic currency conversion.Q2: Why doesn't OKX stop new borrowing to maintain normal levels?When the platform's borrowing amount reaches the platform's deposit amount, the platform will stop new borrowing; the reason for this automatic currency conversion trigger: due to Floki's on-chain activities, a large number of deposit users redeemed, leading to a decrease in user deposit amounts while the borrowing amount did not increase, thus triggering the automatic currency conversion.Q3: After reaching the automatic currency conversion benchmark, will users who may trigger automatic currency conversion be notified in advance? Why did I not receive timely notification this time?After reaching the platform's automatic currency conversion benchmark, the platform will notify users who may be triggered by automatic currency conversion in advance via email. This time, due to issues with the email system, a small number of users did not receive their warning emails in a timely manner. If there are issues with warning emails not being received in time, users can contact OKX customer service for feedback.Q4: Will there be product optimizations in the future to help users know their automatic currency conversion debt liquidation tiers?In the future, OKX will further optimize the email and notification system to ensure that users are notified in advance via email before automatic currency conversion is triggered. Additionally, the collateral borrowing page will be optimized to clearly inform users of their automatic currency conversion liquidation tiers.
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