TechFlow news — OKX CEO Star responded on X to questions regarding OKX's lending mechanism.
He stated:
1. OKX's flexible collateralized borrowing is a peer-to-peer (C2C) market among users. OKX only provides a platform to facilitate matching between users who need to borrow and those seeking yield.
2. 100% reserve backing is a fundamental principle at OKX. When borrowing demand exceeds deposit supply, the 100% reserve requirement triggers the platform’s automatic coin conversion mechanism.
3. OKX has imposed limits on maximum borrowing, prohibiting it from exceeding 100% of available deposits.
4. Due to market activity around the Floki token, there was a large number of redemptions by depositors at that time, causing borrowing levels to surpass 100% and thereby triggering the automatic coin conversion.
5. The OKX team will conduct a thorough review of the underlying design of the collateralized borrowing platform to identify potential optimizations, and welcomes user feedback and suggestions.
