OPNX exchange, a claims marketplace founded by 3AC co-founders Su Zhu and Kyle Davies, has recently come under fire due to its allegedly dubious business model.
Short for “Open Exchange”, OPNX allows users to trade crypto and tokenize claims, including creditors’ claims for the now defunct cryptocurrency exchange FTX.
However, the technicalities of how these claims are being traded have come under scrutiny on social media, with Twitter user and ikigai fund manager Travis Kling noting that “at best this is a very shitty deal for FTX creditors and at worst it’s a full blown scam.”, warning his followers not to use the platform.
The basis of his claims revolve around OPNX’s business model and the token structure of its native token, $OX.
According to the official OPNX page, creditors who wish to instantly liquidate their claims can do so by exchanging them for $reOX tokens on the site. $reOX is a locked version of $OX that unlocks whenever preference for a claim is settled, and can be used as collateral to trade on the platform.
Alternatively, users can also choose to swap their claims for $oUSD, which can be bought at a 1:1 rate from OPNX. However, those claiming via $reOX currently receive double the amount for their claim.
Travis points out that not only are OPNX’s tokens “mechanistically dubious”, but also that should the business face headwinds, these FTX claims could be “gone forever”. He also points out the possibility that FTX could simply not honor deals made on OPNX.
Twitter user Wassielawyer also backs up this point of view, saying that OPNX purchasing claims with “a bunch of OX tokens printed by OPNX” is a major red flag in it’s business model. Furthermore, some of the largest holders of $OX were creditors of CoinFlex, a yield platform that went under after a single customer allegedly failed to meet a margin call.
$FLEX, the native token of the now defunct CoinFlex, can be converted at a 1:100 ratio into unstaked $OX. Ex-CoinFlex CEO Mark Lamb is also a co-founder of OPNX Exchange.
Does Anyone Even Use OPNX?
While OPNX has publicly reported impressive statistics that are a far cry from their dismal start, some have been quick to call out that these values seem dubious.
OPNX has attributed these sudden spikes in volume to their market makers, who receive between $5,000 to $500,000 per month based on their maker volume.
However, the sheer amount of negative comments regarding OPNX hint toward the negative perception it has received as a platform, as well as to the reputation of its co-founders.
Image Courtesy: CoinMarketCap
Surprisingly, their native token, $OX, has been on a rally, doubling in price in a relatively short time frame.
[Editor’s Note: This article does not represent financial advice. Please do your research before investing.]
Featured Image Credit: Chain Debrief