The renowned Nigerian cryptocurrency exchange, Patricia, has made a momentous declaration regarding the introduction of its very own indigenous token, aptly named the Patricia token (PTK). The indigenous token, purportedly a stablecoin with a fixed value tied to the US dollar ($1 = 1PTK), will replace the existing bitcoin (BTC) and naira balances of customers.
Within the corporate declaration shared on X (previously known as Twitter), it was expounded that the exchange’s operational activities shall be transitioned to a novel platform named Patricia Plus application.
This statement follows the company’s declaration of being subjected to a breach, resulting in the tragic depletion of financial resources. Although it has been explicitly stated that no customer funds have been impacted, users of the platform have actually encountered an inability to access their funds since the month of April.
The pronouncement made by Patricia has elicited speculation that insinuate the possibility of the organisation orchestrating an exit scam, thereby abandoning clients who find themselves in a predicament where their funds are ensnared within the confines of the platform, rendering them stranded.
How Patricia Plus will interact with your funds. pic.twitter.com/xLutZ92JyD
— Patricia (@PatriciaSwitch) August 18, 2023
Read also: Patricia partners with Deimos to strengthen asset protections
Discussing about Native tokens
Native tokens are digital assets that possess an inherent connection to a specific cryptocurrency exchange. Illustrative instances encompass Binance’s BNB, Quidax’s QDX, Bundle’s BDX, and FTX’s FTT.
What could be the rationale behind Patricia’s decision to initiate the launch of a native token?
Cryptocurrency exchanges have initiated the introduction of native tokens for a multitude of purposes, including the provision of incentives to users as a means to stimulate trading activities, a boost of liquidity levels, the promotion of communal ownership of the exchange, and the utilization of such tokens as a strategic approach for fundraising plans, among various other rationales.
Based on Patricia’s recent financial predicaments, one can deduce that the inception of the native token was orchestrated as a strategic measure for raising funds.
As per the Founder of Hyperspace Technologies, Oluseyi Akindeinde, the strategic deployment of native tokens serves as a viable mechanism for procuring financial resources for numerous exchanges. Upon the initiation of these tokens, the exchange duly retains a substantial portion of said tokens, thereby signifying that in the event of a surge in token value, the company stands to accrue a greater monetary gain.
What to watch out for with the token launch
The token is not yet listed on any cryptocurrency exchanges.
No major cryptocurrency databases like CoinMarketCap or Coingecko list the token. These aggregators compile data on a token, including its market price, the total amount of tokens in circulation, the contract address, and the blockchain on which it was first issued.
Akindeinde, however, noted that it would take some time for freshly released coins to be included on aggregators.
It’s not on any public blockchain at this time.
PTK is not supported by major blockchains where trading platforms are releasing their own coins. For example, PayPal’s freshly released stablecoin, PYUSD, may be found on the Ethereum blockchain, where it was introduced.
According to a person with knowledge of the situation, Patricia’s token has not yet been released and will only be used to record debt on her books.
Balance conversion without user permission
Patricia said on X that it would transfer all outstanding funds to PTK. Customers weren’t consulted beforehand, and now they’re worried they won’t be able to convert their tokens into dollars or other cryptocurrencies.
If consumers are able to withdraw funds, a spike in withdrawals will prompt PTK to de-peg, leaving customers who were unable to withdraw funds stuck.