OKEx Skips Warren Buffett Lunch, Donates $4.5M to Insurance Fund
Major cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin to its perpetual swap market insurance fund in a show of support.
More protection for traders
In a press release shared with Cointelegraph on July 23, the Malta-based crypto exchange revealed its contribution to the perpetual swap market insurance, whose amount is equivalent to what Tron’s Justin Sun paid to have lunch with Warren Buffett.
Andy Cheung, head of operations of OKEx, commented on the contribution saying that “the Power Lunch is a significant initiative to advocate the value of Bitcoin, blockchain, and digital assets to traditional finance leaders on Wall Street.” Cheung added:
“We wanted to support blockchain development in our own way and, more importantly, put our customers first. That’s why we decided to place our resources where our customers can directly benefit.”
The insurance fund is used to pay the amount of default value on a margin call before the clawback event is triggered. So the bigger the insurance fund, the less likely the clawback would be occur. The clawback mechanism would, therefore, act as the last line of defense if a large-scale systematic event occurs. Insurance serves as a cushion to protect trader’s profit from reaching the last defended line.
“The insurance fund minimizes the uncertainty and trading risk of which traders’ expected profit would be taken out, aka clawback risk,” OKEx explains.
The donation is expected to go through on 24 July, which will roughly double the amount of the perpetual swap market insurance fund.
However, as Cointelegraph reported earlier, the Tron Foundation is postponing the Warren Buffett lunch to an unspecified date due to founder Justin Sun falling ill with kidney stones. Nevertheless, the given donation plan will not be affected, according to OKEx.
Cryptocurrency donations taking off
The charity sector has been increasingly adopting digital currencies, with leading industry players having donated in a number of projects worldwide. This month, decentralized insurtech firm Etherisc launched a blockchain-based insurance platform for farmers in Sri Lanka through a partnership with the insurance company Aon and the charity Oxfam.
The Binance Charity Foundation announced an alliance of 47 organizations to make a token geared towards women's health. Binance claims that a blockchain-based means of distributing charity will address inefficiencies and transparency issues that are purportedly present in traditional means of charitable giving.