OKX Cuts Mining Pool Services Amid Slump In Number Of Users

Written by

Eddie Mitchell

Cryptocurrency Writer

Major crypto exchange OKX has just announced that it will be closing its mining pool and related services. This follows a brief slump on the platform’s native token OKB, as well as the delisting of several major tokens over the last month. Today's announcement ends the exchange’s five-year run with the service.

Mining Pool shutdown

As per the official press release, OKX states that “due to business adjustments” it will be ceasing all mining pool and related operations by the end of February 2024. Regarding official dates, the OKX team writes: “On January 26, 2024, we will discontinue the new-user registration feature. Existing users are allowed to continue using the service until February 25, 2024.

“On February 26, 2024, we will discontinue all mining pool-related services.”

Causes

Speculation as to the cause of this move has led some to speculate that it may be due to the fact that OKX’s mining pool use and adoption have been waning over the years.

OKX proof of work (PoW)

On the OKX website, you can see that the pools only have a total of 17 active miners across Bitcoin (BTC), Litecoin (LTC), and Ethereum Classic (ETC). As per data from Mining Pool Stats, OKX is ranked 36th with a declining hashrate of 487.52 TH/s, which is miniscule compared to other competitors just a few ranks up. 

Bitcoin halving

The decision comes at a pretty tricky stage for the mining industry overall as the Bitcoin halving, which is set to occur in April 2024, will reduce the amount of coins being minted into the ecosystem and massively increase the power needed to stand a chance of earning the block reward. 

In turn this makes many low-powered underperforming mining computers and pools essentially obsolete, and this could very well be the rationale behind OKX's move to shutter the doors on its sub-par mining pools.

OKB flash crash

The issue may be compounded by a pretty heavy slump in the price of the platform’s OKB utility token. This saw the token’s price crash from around $52 to $45 in a matter of moments, and this volatility continued through until it recovered today.

OKB daily chart
The exchange was prompted to respond to the issue in a 23 January post that noted the volatility had caused “several margined positions to automatically liquidate,” resulting a “three minutes” of extreme volatility that took the token as low as $25 before stabilizing. 

Accordingly, OKX admitted fault as a result of “abnormal liquidations” and has pledged to present a compensation plan, and the closure of its mining services may be a part of that strategy.

As per their latest post, OKX is presently working to resolve the issue and has noted that funds will be deposited automatically into user accounts.

Bitcoin remains resilient

The past couple of weeks have been particularly eventful for cryptocurrency overall. But it seems as though a great deal of tension that had built up over 2023 is beginning to unwind, with 2024 looking to be a rather fruitful year for crypto and Web3 overall.

As the working week draws to a close, the premise cryptocurrency BTC has managed to push above the support level of $40,000, giving traders some optimism to enjoy over the weekend.

Bitcoin (BTC) daily chart