Cryptocurrency exchange Patricia has explained that the PTK token will work similarly to an IOU, i.e. as a way for the exchange to acknowledge its debt to its users.
Nigerian cryptocurrency exchange Patricia's announcement of the PTK token was met with skepticism from users, who took to social media to question the motives behind the move. In response to this backlash, the cryptocurrency exchange has released a white paper that seeks to explain the intended function of Patricia's (PTK) token.
According to the released white paper, Patricia's token is not a stablecoin but a debt token, issued to customers to manage users' debts. Cryptocurrency exchange Patricia also said that the token would work similar to an IOU, i.e. as a way for the exchange to acknowledge its debt to its users.
In April 2023, Nigerian cryptocurrency exchange Patricia suspended withdrawals and deposits due to the hack. However, customers who have been unable to access their funds for months due to the hack are not comforted by the recent announcements, which raise many questions, including questions about how tokens are backed and why Patricia transferred them without customers' consent. The main question was when their money could be accessed. Note that the white paper explaining the PTK token does not provide a definitive answer to this question.
According to the paper, users whose balances have been changed from Bitcoin and Nigerian naira to PTK have the option to redeem them for USDT, which can later be exchanged for other cryptocurrencies or fiat currencies such as the naira. All transfers will be denominated via the value of the asset in USD as of April 29, 2023. However, the launch of the new (Patricia Plus) app will allow customers, who incurred losses in Bitcoin and Naira due to the hack, to access PTK tokens that will serve as their debt tokens.
Notably, in 2016, Bitfinex introduced the BFX token after a hack led to the loss of 119,756 BTC (equivalent to $72 million at the time). Similar to the approach of the Nigerian Stock Exchange Patricia, Bitfinex issued a debt token called BFX to compensate the customers affected by the hack and eventually bought back these tokens from the customers.
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