Original author: Xiyu
Recently, the increase in trading volume of OPNX (Open Exchange), a cryptocurrency debt trading platform founded by Su Zhu, founder of Three Arrows Capital, and the sharp rise in the price of its platform token OX, have attracted the attention of the cryptocurrency community.
On June 26th, OPNX announced that its daily trading volume has surpassed $50 million, with an average daily trading volume of $41 million. Since its launch on June 1st, the price of its platform token OX has risen from $0.011 and reached a high of $0.044, with a maximum increase of 300%. Currently, the price has fallen back to $0.036, with a total market value of approximately $119 million, ranking 233rd among cryptocurrency assets.
Looking at the trading data of the OPNX platform, this new cryptocurrency trading platform, which has been online for only 3 months, has a trading volume comparable to well-established cryptocurrency trading platforms such as Crypto.com (24-hour trading volume of $79.63 million) and Bitfinex (24-hour trading volume of $68 million).
All of these seem to indicate that OPNX is developing according to the direction set by its founder, but due to the uniqueness of the founding team, users have always been skeptical of the platform.
On June 22nd, a community user raised concerns about the inconsistency of the trading volume and price fluctuations of BTC asset trading pairs on OPNX, which sparked widespread discussions in the cryptocurrency community. In addition, OPNX, which was originally positioned as a cryptocurrency debt trading platform, debt tokens have long become a gimmick product, and the actual business is contract trading.
The combination of "untrustworthy founder + failed platform" has always lingered around OPNX, making it difficult to shake off.
OPNX's tens of millions of trading volume questioned for "fake trading", but less than $2 on the first day of launch
Since entering June, OPNX has been releasing positive news. On June 26th, OPNX announced that its daily trading volume has surpassed $50 million, with an average daily trading volume of $41 million, and so on; On June 25th, it announced the launch of the first Launchpad project, Raiser (RZR), an unsecured credit market, and all OX pledgers will share 10% of the RZR supply allocation; On June 24th, OPNX announced the launch of the stablecoin oUSD, which can be exchanged with USDT at a 1:1 ratio; On June 1st, it announced the launch of the new governance token OX and the governance platform The Herd. OX allows users to trade for free by staking their tokens, and supports the conversion of OX with FLEX, and so on.
OPNX (Open Exchange) is a cryptocurrency debt trading platform co-founded by Su Zhu, the founder of Three Arrows Capital, and Kyle Davies, as well as the bankrupt exchange CoinFLEX. It tokenizes the debt tokens in bankrupt cryptocurrency projects for users to trade or use their debt assets as collateral, in order to release the trapped liquidity of cryptocurrency assets. The platform made its debut in February of this year and announced the acquisition of all assets of the exchange CoinFLEX, including personnel, technology, and tokens, in early March. It continues to use FLEX as the platform token, reorganizing it and renaming it Open Exchange.
Since the launch of the OPNX platform, its trading volume has received great attention from users. According to FLEX Statistics data, since June 23rd, the 24-hour trading volume of the OPNX platform has exceeded $50 million, reaching a maximum of $57 million, and the current 24-hour trading volume is $47.72 million.
However, the authenticity of OPNX's trading data has been questioned. On June 22nd, cryptocurrency trader @Loris tweeted that after analyzing the BTC perpetual contract daily trading volume data of OPNX and comparing it with the top trading platforms, it was found that OPNX may have "fake trading."
Loris pointed out that the normal volume-price data displayed by top trading platforms have consistent volume-price fluctuations (such as higher trading volume should be accompanied by significant price fluctuations) and a stable baseline. However, the volume-price data of OPNX shows minimal price fluctuations corresponding to the volume amplification range, while the price fluctuations are significant in the volume reduction range.
In addition, OPNX's daily trading volume has an independent and distinct pattern compared to price fluctuations, suggesting the presence of "fake trading" on OPNX.
Subsequently, another cryptocurrency user commented that the fake trading volume on OPNX is so obvious.
According to the BTC contract price trend chart data from the OPNX official website, it is consistent with Loris' statement. Since June, the trading volume has regularly skyrocketed at regular intervals (generally at 8:00, 12:00, 4:00, etc. daily), and the peaks in the trading volume bars are mostly in a similar range. During the period of low price volatility, the trading volume is huge, and during the period of violent price fluctuations, the trading volume is extremely low. The BTC price chart data and trends on the OKX platform during the same period also conform to the law of supply and demand.
BTC/USDT contract chart on OPNX platform
BTC/USDT contract chart on OKX platform
The response from OPNX is that this trading volume is attributed to the introduction of market maker plans. However, OPNX's market maker incentive plan was announced as early as April 8th. But currently, @Loris' tweet has been deleted.
The reason why the trading volume is so highly focused on is because on the day OPNX went live on April 4th, it was reported that the trading volume was less than 2 US dollars. According to a report by CoinDesk, OPNX had only executed two trades within the first 24 hours of going live, with a total value of 1.26 US dollars. Later, the official clarification from OPNX stated that CoinDesk's 1.26 US dollar transaction data only came from contracts and did not include spot trading. In fact, the total trading volume that day was 13.64 US dollars.
In just 3 months, the single-day trading volume on OPNX has increased from around 10 US dollars to 50 million US dollars. The official explanation for this change in data is attributed to various factors working together, such as market maker plans, the platform's native token OX, Launchpad new projects, and so on. However, this does not dispel doubts in the minds of users.
OPNX's debt trading becomes a gimmick, contracts become the main force
In addition to the authenticity of trading volume data, OPNX's initially touted debt trading has become a gimmick product, and the trading volume of claim-based assets (also known as debt-based tokens) is almost zero for multiple days.
Currently, more than 99% of the trading volume on the OPNX platform is actually contributed by perpetual contracts. Taking the trading volume on July 3rd as an example, the 24-hour trading volume on the OPNX platform was $68.12 million, of which the contract trading volume was $67.99 million, and the spot trading volume was only $137,000. The bond-like tokens are included in the spot trading volume and can be ignored.
This seems to be contrary to the initial positioning. At the beginning of the platform's establishment, OPNX was a platform focused on bond trading and planned to support the trading of claims of multiple bankrupt companies, including Celsius, FTX, Genesis, BlockFi, Voyager, Three Arrows Capital, etc.
The first bond-like token launched was rvUSD (Recovery Value USD+++++++++ Tokens), which was issued by CoinFLEX and represents Roger Ver's $84 million personal debt owed to CoinFLEX. After CoinFLEX was acquired by OPNX, CoinFLEX users' KYC information and account balances can be seamlessly migrated to OPNX as its first batch of customers, and the bond-like token rvUSD was also launched on OPNX.
However, since the launch of rvUSD on OPNX in April, its price has been falling all the way, from the highest $0.62 to the current $0.15, with almost zero trading volume and liquidity.
rvUSD Price Chart
On the other hand, CELSIUS, the bond-like token of Celsius, which was launched on June 1st, supports Celsius creditors to tokenize their own claims, releasing the liquidity of their trapped funds. However, as of July 4th, there has been no trading activity on the CELSIUS/USDT trading pair, with zero trading volume and a constant token price represented by a straight line on the order book, with only 8 sell orders.
CELSIUS Bond-like Token Price Chart
From this perspective, OPNX has not developed into the intended bond trading platform and its business has now shifted towards a more traditional cryptocurrency exchange-like approach, with contracts becoming the main force of the platform.
Actually, there are early signs. The first function launched by the platform OPNX on April 4, which is known for debt claim trading, is to support cryptocurrency spot and derivative trading services, not debt token trading. This has been described by community users as "disguising as supporting cryptocurrency claim trading, but the actual business is a contract casino". This also indicates that OPNX's focus is on crypto asset trading rather than debt trading, as the types of claim trading assets and user groups are limited.
In addition, on April 18, the Dubai Virtual Asset Regulatory Authority issued a written condemnation to the founders and CEO of OPNX, stating that they operated and promoted their digital asset trading platform OPNX without the necessary local licenses. This exposes compliance issues with OPNX.
Is the plan to repay debts by starting an exchange feasible?
OPNX has attracted attention from users through short-term increases in trading volume and the short-term surge of platform token OX. However, the shadow of founder's betrayal and CoinFLEX's suspension of user withdrawals cannot be dispelled.
On June 27, the liquidator of Three Arrows Capital is still trying to recover $1.3 billion from its founders Su Zhu and Kyle Davies. According to a previous report by business management company Teneo, Three Arrows Capital currently owes approximately $3.5 billion in debt to 27 companies. Meanwhile, the trading platform CoinFLEX suspended all user withdrawals due to a funding gap issue and forced its creditors and investors to become shareholders of the company.
The combination of "untrustworthy founder + failed platform" makes it difficult for users to fully trust OPNX, which faced opposition from many during its early establishment. When Su Zhu first announced the launch of a crypto debt trading platform on Twitter, one crypto community user commented below, "You should focus on talking to your lawyer instead of launching new scams." In addition, Evgeny Gaevoy, CEO of market maker Wintermute, stated that he would not invest in this new exchange established by the founder of Three Arrows Capital; and Nic Carter, partner at crypto venture firm Castle Island Ventures, subsequently commented that it is reasonable to collaborate with other dishonorable fraudsters to trade the debts of a defunct fraudulent exchange. This actually sounds reasonable.
After OPNX went live in April this year, it announced its main investors, including AppWorks, Susquehanna (SIG), DRW, MIAX Group, China Merchant Bank International (CMBI), Token Bay Capital, Nascent, Tuwaiq Limited, etc. It also stated that these institutions not only provided funding but also offered many opinions and assistance in terms of its vision, token economics, legal framework, and decision to relocate to Hong Kong.
However, the investor list released by OPNX was quickly proven wrong. DRW, Nascent, MIAX, Susquehanna (SIG), and others have all issued statements denying their investment in OPNX. Among them, Nascent, DRW, and other institutions stated that they did not participate in OPNX's financing and only invested in FLEX tokens in early 2021.
Subsequently, OPNX personnel stated that Su Zhu and Kyle Davies are no longer involved in day-to-day operations at OPNX. However, their Twitter profiles still mention @OPNX and they continue to share data and progress related to the OPNX platform on a daily basis. Just yesterday, Kyle Davies even stated in a Twitter Space that the two founders of Three Arrows Capital will donate the "future earnings" of the OPNX platform to the creditors who suffered losses due to the fund's bankruptcy last year.
This aligns with speculation from users that "OPNX is an important plan for Su Zhu and others to open an exchange to repay debts." Exchanges have always been considered a lucrative business in the cryptocurrency industry. Some have stated that if a trading platform has a daily trading volume of 500 BTC, it can generate a pure income of half to one bitcoin per day. So, can the desire to repay debts through the OPNX platform be realized?
Let's do some calculations. Based on OPNX's daily trading volume of $50 million, and the current maker fee of 0.02% and taker fee of 0.07%, OPNX's daily fee revenue is $45,000. Three Arrows Capital currently owes approximately $3.5 billion in debt. Clearing this debt will require approximately 77,777 days, or about 213 years. If we factor in the rise of the platform token OX, increased trading volume, and future listing fees, perhaps the repayment speed could be accelerated.
However, it is worth noting that the current official OPNX Telegram group has only 2,060 members, while the Chinese Telegram group has 2,690 members (Su Zhu's Twitter name has also been changed to "Zhu Su" in Chinese). The number of community users is in stark contrast to Su Zhu and Kyle Davies' 568,000 and 517,000 followers.
