USDK (USDK) is a stablecoin built and run by a Hong Kong company they call OKLink Fintech Limited.
They back each USDK with $1 US dollar held by Prime Trust LLC, a US company based in Las Vegas. The USDK is an Ethereum stablecoin that makes payment in dollars from the Prime Trust account.
Users deposit $1 into the Prime Trust account when they buy one USDK. OKLink then mints the USDK on the blockchain and issues it to the buyer.
What Value does USDK Offer?
They claim, USDK has a 100% reserve. That means $1 dollar backs each USDK stablecoin.
OKLink’s accountants, EideBailly LLP, report Prime Trust held $40.429 million in trust for USDK on 31 January 2022. Those dollars backed 40.229 million USDK.
Prime Trust is not a bank. Hence, the Federal Deposit Insurance Corporation (FDIC) does not insure Prime Trust accounts. Instead, the Nevada State Banking Commissioner’s office regulates Prime Trust.
USDK is a minor player in the stablecoin Market. CoinMarketCap gave USDK a $30.3671 million Market Capitalization, a $30.669 Fully Diluted Market Cap, an $81.415 million 24-hour Market Volume on 16 February 2023.
The USDK Stablecoin is not Stable
USDK had an $80.388 million Centralized Exchange (CEX) Volume and a $6,829 Decentralized Exchange (DEX) Volume on 16 February 2023. They base those numbers on a Circulating Supply of 28.600 million USDK. Thus, speculators sold more USDK than bought it.
Interestingly, Mr. Market thinks USDK is worth more than $1. CoinMarketCap gave it a $1.07 Coin Price on 16 February 2023. USDK was CoinMarketCap’s 542nd ranked cryptocurrency on 16 February 2023.
Therefore, I do not consider the USDK a stablecoin because its Coin Price does not match the US Dollar. Instead, I think USDK is a synthetic asset built around a dollar. A synthetic asset is a digital investment built with the value of another asset. For example, all of USDK’s value comes from its connection to the US dollar.
They can deliver a higher price because USDK is not pegged to the dollar. Instead, it uses the dollar as a base value. To explain, a pegged stablecoin stays close to the price of a fiat currency. USDK does not so I think it is not pegged.
What is OkLink?
OKLink Fintech Limited is a subsidiary of a Hong Kong Company they call OKG Technology Holdings Limited. They list OKG Hong Kong stock exchange as 1499 HK.
Beyond stablecoins, OKLink’s principal business is providing data about blockchain and cryptocurrencies. For example, OkLink offers Panoramic On-chain Data about nonfungible tokens (NFTs) and Decentralized Finance (DeFi).
For example, OkLink offers lists of the Top Five DeFi Projects, the Top Five NFT projects and the Top Five Hot Contracts. The Top NFT Projects on 15 February were Axie Infitnity, NFL All Day, NBA Top Shot, Alien Worlds, and UFC Strike. The Top Five DeFi Projects on 15 February 2023 were Lido, Maker, Uniswap, Aave, and WBTC.
OkLink also tracks Ethereum burning and Data Broadcasting. A blockchain Data Indicator Library tracks a variety of onchain data about miners, exchanges, and institutions.
Blockchain Risk Assessment
OkLink asses risks for blockchains. Its ChainIntelligence assesses security risks by tracing, analyzing, and monitoring addresses. On 15 February 2023, OkLink claimed to have traced and monitored 91,905 addresses and monitored 19,329 addresses and transactions.
OkLink was monitoring 391 million address labels and 503.02 million address label types on 15 February 2023. OkLink conducts onchain monitoring of addresses and transactions 24 hours a day and seven days a week.
OkLink’s Chainitelligence Pro tracks and monitors blockchain assets through address analysis, transaction behavior analysis, relationship analysis, and transaction traceability.OnLink calls Chainintelligence Pro a reporting and consulting platform that collects users’ complaints about crypto assets.
They built Chainintelligence Pro to help regulatory authorities detect cryptocurrency crimes. CoinTillegience Pro offers Judicial Authentication. This refers to reports that offer expertise with specialized knowledge and technology.
They claim Intelligence Pro can create forensic reports authorities can use to prosecute cryptocurrency criminals. Address and transaction analysis allows OkLink to track cryptocurrency and NFT movements and trace the origin of digital assets.
OkLink is based in Hong Kong which is part of the People’s Republic of China. That means OkLink could work with Chinese security authorities and the Chinese Communist Party.
The USDK Risk
Speculators seeking a lesser stablecoin that could be safe. I think USDK (USDK) is worth examining. CoinMarketCap’s data shows USDK can earn extra income when the Coin Price rises over $1. Hence, the lack of a peg could pay.
Yet it appears US organizations audit and regulate USDK. Moreover, the dollars are in a US Trust Account, which adds a layer of security. Finally, OKLink is a security and risk assessment organization which gives it extra capabilities to make its stablecoin safer.
If you are seeking a stablecoin that can survive today’s chaotic crypto markets. I think USDK is a stablecoin that is worth examining. In particular, OkLink could help USDK avoid some of the risks in today’s increasing volatile stablecoin market.