OKEX stopped withdrawing, a warning to us

The exchange is a place to buy coins, not a place to deposit coins.
Yesterday, OK Exchange gave a sudden announcement that shocked the entire currency circle:

OK Exchange stopped withdrawing coins, and when it will resume depends on subsequent development.

It’s not the first time that the exchange’s closure and runaways have occurred. Such incidents have made their ears callous, and many people have become numb. Only this time is different, because the accident is OKEX, one of the three major exchanges.

Many friends have asked me privately when will OK Exchange be resolved? They still have a lot of assets on OK.

Many articles are trying to dig out the truth and reason of the whole incident, but in my opinion, the truth and reason are not the most important. Even if it is found out, it is only a melon of the people who eat melons. The most important thing is as an ordinary investment. How many times do we have to hit the South Wall before we really look back?

From the collapse of various pheasant exchanges in the early years to the subsequent run-off of FCoin, I have always reminded everyone not to put a large amount of assets on the exchange, and repeatedly emphasized that the exchange is only where we buy coins, not where we store assets.

After the outbreak of DeFi in June this year, the rapid rise of decentralized exchanges completely broke the monopoly of centralized exchanges, and gradually developed a trend of anti-little courts.

In addition, many of the new projects that have emerged in this round of DeFi are projects in the Ethereum ecosystem, and almost all projects in the Ethereum ecosystem can be traded on decentralized exchanges, which makes it important to invest in long-term potential projects. Investors can almost buy most high-quality investment targets on decentralized exchanges.

These two factors make decentralized exchanges almost meet the needs of most investors (not short-term traders) to purchase investment products.

So why do most people put a lot of assets on centralized exchanges, especially the three major exchanges? I think there may be three reasons: one is habit, the exchange can’t change it for a while. You say that the second and third-tier exchanges are not safe, then I can put three of them; the second is that centralized exchanges are in leverage and futures. Trading cannot be replaced for the time being; third, the centralized exchange currently provides mining services for the majority of retail investors.

Regarding “habits”, I think this can be changed slowly, especially after serious exchange accidents one after another, more and more users who purely invest in buying coins will gradually leave centralized exchanges. Perform a large number of transactions on decentralized exchanges.

As for leverage and futures trading, it seems that the biggest threshold for decentralized exchanges is being closely watched by many project teams. There are already many decentralized exchanges that focus on leverage and futures trading. Projects are still emerging. I believe that in time, this threshold will also be breached by decentralized exchanges.

For the mining services currently provided by centralized exchanges, this indeed solves the inconvenience of small and medium retail investors to directly participate in various mining activities.

In this DeFi tide, especially in the later stage, after the formation of the FOMO mentality, a large number of retail investors rushed into the Ethereum ecosystem to mine, but they had nowhere to start. It happened to be solved by similar mining activities launched by Binance and Huobi. The urgent need of these retail investors. However, centralized exchanges are not regulated and there are moral hazards. This will always be a sword hanging on the heads of exchange users. Once this sword is cut off, countless users will be bloodied.

Even if the OK issue can be satisfactorily resolved, users who put a lot of assets in OK may have to survive this waiting period before the incident is resolved.

Many people ask what impact this incident will have on the current market situation? I think the first to be negatively affected is the OK platform currency. At this time, there were also people who took chestnuts out of the fire, believing that the OK platform currency would return to normal currency prices after the incident was resolved, and took this opportunity to buy it at a low price. I suggest not to take this risk. This “unsuccessful benevolence” approach is not a sound investment method and is not suitable for most people.

This event will not only affect the OK platform currency, but also the platform currencies of the other two platforms. Everyone is in the same ecology. The principle of “fire at the gate of the city and kill the pond fish” is simple. As for mainstream currencies, I don’t think there will be any impact in the long run.

Two days ago, some readers asked me if I had already dumped all BNB, and I have indeed dumped them all. I do not deny that centralized exchanges will still exist for a long time in the future, but I think the value it can provide has become thinner and thinner. Under such circumstances, how much value the exchange platform currency has, I hold Very cautious.

I hope this OK event can make more people realize that the exchange is just a place to buy coins, not a place where we store assets. This is true for any centralized exchange.


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