How OKEx's risk engine prevented cascading liquidations during Bitcoin crash

The huge crypto crash that took place on Sunday could have been much worse if it weren't for OKEx's risk engine.

The exchange's CEO Jay Hao said that Sunday's flash crash on both Bitcoin and Ethereum resulted in zero clawbacks and zero ADL, as the platform's built-in security mechanisms prevented cascading liquidations after Bitcoin dropped more than $1,200.

While Bitcoin has never been synonymous with stability, the sudden crash it saw on Sunday caught even the most experienced traders unprepared.

The road towards its ATH was cut short by a massive crash on Sunday, where over $20 billion was wiped out from the market in mere hours.

With no mechanism in place to prevent an avalanche of liquidations, many exchanges suffered greatly during the weekend.

The exchange shared with CryptoSlate that it managed to cut losses at the early stage of the crisis thanks to its risk engine.

One of the ways the exchange minimized the overall market impact of the crash is by diving liquidation orders into smaller pieces through its proprietary liquidation engine.

If the market becomes too volatile for these mechanisms to prevent major losses, OKEx cuts losses with its tiered margin system-it prevents liquidation cascades when the market is extremely volatile.

Jay Hao, the CEO of OKEx, explained that experience has taught the company just how volatile Bitcoin can be and pushed them to create a comprehensive risk management system that would protect both the exchange and its customers during crashes like this.

"We're pleased to report that the flash crash on both BTC and ETH resulted in zero clawbacks and zero ADL," he said.