OKX and Bitget have consecutively conducted large-scale token burns, intensifying the L2 anxiety among exchanges

2025-09-09 09:05:11

Collection

The rise of the "CEX + L2" paradigm is essentially a collective anxiety of leading exchanges towards future uncertainties.

Author: Bernard, ChainCatcher

This month, the competitive landscape of CEX public chains has added new variables. Bitget announced a strategic partnership with the Layer 2 public chain Morph, upgrading its platform token BGB to become the Gas token and governance token of the Morph ecosystem, marking another exchange's entry into the "CEX + L2" battle.

As part of the collaboration, Bitget transferred all 440 million BGB it controls to the Morph Foundation, with 220 million immediately destroyed and the remaining 220 million locked to support ecosystem development and gradually released. Following the destruction, the market price of BGB surged, rising 14% within 24 hours, from a high of $4.63 to $5.28, reaching a new high since early August 2025.

Through its partnership with Morph, BGB has transitioned from a mere platform token to an asset with on-chain utility, taking on functions such as Gas payments, governance, and settlement.

This scene feels familiar—just last month on the 13th, OKX announced the destruction of 65.26 million OKB worth $760 million, locking the total supply at 21 million. Similarly adopting the "token destruction + L2 binding" strategy, OKX and Bitget are laying out their plans along a similar path.

01 Bitget and OKX's "Same Path, Different Strategies"

The Bitget - Morph and OKX - X Layer models share many similarities. Both leverage the user base of large exchanges, transforming their platform tokens into Layer 2 native Gas and governance tokens, focusing on consumer finance and payment (PayFi), and creating scarcity through large-scale token destruction. Technically, both are Ethereum L2 solutions, compatible with EVM, and deeply integrated with exchanges and wallets. In terms of business models, both have established ecosystem funds to incentivize developers, bridging CEX and DeFi users, and planning for real-world payment integration.

Despite the similarities, there are significant differences between the two models. Firstly, in terms of technical choices, OKX - X Layer adopts a zkEVM architecture, using Polygon CDK, which is a self-developed and controlled infrastructure; while Bitget chose Morph's hybrid Optimistic + ZK rollup technology, adopting a collaborative model rather than proprietary development, with a greater focus on decentralized sequencer networks.

1.1 The Deflationary Path of BGB

Although both Bitget and OKX have adopted a combination of "token destruction + functional upgrades," the details of their strategies differ significantly. OKX has conducted a more thorough reconstruction of the token economy for OKB: the official invested over $1 billion to repurchase and destroy 65.25 million OKB, reducing the total supply from 300 million to 21 million, and even removed the minting function from the smart contract.

In contrast, Bitget has adopted a gradual deflationary strategy for BGB. Since its launch in 2021 (initial price $0.0585 USDT, total supply 2 billion), it plans to destroy 800 million BGB (40%) by December 2024 and implement a quarterly repurchase and destruction mechanism starting in 2025, using part of the platform's revenue to reduce circulation.

1.2 Ecosystem Support

In terms of ecosystem support, similar to OKX's $100 million X Layer fund, Bitget has a $100 million Web3 fund (Empower X Fund) and Foresight Ventures to invest in potential projects, aiming to rapidly catalyze a foundational developer and application ecosystem in the early stages of L2 development through "money distribution."

Morph, established in 2023, has received investments from Dragonfly Capital, Pantera Capital, and others, adopting a zkEVM route, emphasizing payment optimization and a "consumer-grade" positioning: low transaction costs (below $0.5-$1 of zkSync Era), fast finality (1-3 days withdrawal period), focusing on gaming, social, entertainment, and PayFi, rather than pure DeFi. Bitget upgraded BGB as Morph's Gas and governance token, while also launching a $200 million strategic plan for long-term token utility and ecosystem expansion.

As of September 2025, Morph's TVL reached $86.31 million (bridged $56.60 million, native $29.71 million), with a peak of $94.90 million in the first quarter, growing 854%. Over 200 projects have been deployed, with the testnet accumulating 6 million wallets and 100 million transactions, stablecoin market cap at $4.84 million, and DEX daily volume at $200,000.

1.3 Morph's Role and Controversy: Bitget's L2 Alliance Strategy

If the deflation of BGB and OKB is "similar in form," then the cooperation between Bitget and Morph is "similar in spirit" to X Layer. Bitget has not fully built its own L2 but has invested in Morph as a lead investor, designating BGB as the native Gas token. If X Layer is the "child" incubated internally by OKX, with stronger brand and ecosystem control and more thorough integration, then Bitget and Morph's "investment + cooperation" model resembles a "strategic alliance," with Morph maintaining a higher degree of independence.

However, this collaboration is not without controversy, especially regarding criticisms of Morph's internal dynamics and its relationship with Bitget. In May 2025, Blockworks reported internal disputes among Morph's founders, extravagant spending, and unclear direction, leading to layoffs and a "shadow CEO" phenomenon—Forest Bai, who is also a co-founder of Foresight Ventures (Bitget's venture capital arm) and the chairman of The Block media company, but Morph employees indicated that actual decision-making power lies with Bai. Morph's former CEO Cecilia Hsueh (formerly CMO of Phemex exchange) was also criticized by several employees for her limited understanding of blockchain technology, focusing more on her personal social media image than on company operations. Additionally, early community activities by Morph (such as point farming and "burning Gas" for points) promised $MORPH distribution but ultimately did not issue tokens; and the luxurious spending after the 2024 seed round financing also sparked user dissatisfaction, accusing it of "PUA-ing the community." This collaboration between Bitget and Morph has also raised some questions: Is Bitget "forced" to choose this path to integrate resources or save the project?

02 Overview of the CEX + L2 Competitive Landscape

Currently, mainstream exchanges have fully entered the L2 competitive phase: Base chain leads with $12.74 billion TVL, while Binance's opBNB leads user growth with 4.7 million daily active users. The entire CEX + L2 ecosystem's TVL has surpassed $51.5 billion, with L2 processing 85% of Ethereum's transaction volume, marking the blockchain's official entry into a new era of scalability.

Binance, through its dual-layer layout of BNB Chain and opBNB, has seen its TVL grow from $3.5 billion in early 2024 to $10.2 billion by June 2025, with daily trading volume reaching a historical peak of 15.2 million transactions on May 29. opBNB's daily active users reached 4.7 million, with transaction fees as low as $0.001, demonstrating strong scalability.
Base chain's TVL reached $12.74 billion in 2025, becoming the largest L2 network. Its DeFi ecosystem is particularly thriving, with Aerodrome Finance accounting for over 50% of TVL at $1.35 billion, and monthly trading volume reaching $9.02 billion.
Crypto.com Cronos zkEVM launched ahead of schedule, bridging approximately $50 million, focusing on the integration of AI and blockchain;
Bybit deeply integrated with Mantle, with the MNT token rising 56.9% in August 2025;
Kraken launched Ink L2 based on OP Stack, choosing ETH as the Gas token, without issuing a native token.

03 Why Now? ------ The "L2 Anxiety" of Exchanges

The rise of the "CEX + L2" paradigm is essentially a collective anxiety of leading exchanges regarding future uncertainties. The failure of OKT Chain has proven that, in today's environment where the Ethereum network effect is increasingly strong, the path of building an independent L1 public chain has essentially been blocked. Meanwhile, Coinbase's Base chain has achieved great success through deep integration with the Ethereum ecosystem, with a TVL of $4.7 billion, undoubtedly providing significant stimulation and pressure to all competitors. Therefore, embracing Ethereum L2 has become the only option for seeking new growth curves. The core logic of this model is: exchanges leverage their user base and liquidity advantages to provide cold-start support for L2; while L2 provides exchanges with on-chain ecosystem extensions, facilitating the transformation from "trading platform" to "Web3 infrastructure."

04 The L2 War Has Just Begun

The collaboration between Bitget and Morph is just a microcosm of the exchange public chain battle. As other exchanges like Bybit and Kraken also lay out their own L2 solutions, the entire industry is entering a new phase of "a hundred flowers blooming."

For Bitget and OKX, although they have lost the first-mover advantage in the L2 competition, and their poor history has created significant stereotypes in users' minds, the allure of the "Web3 infrastructure" narrative is too great for any leading exchange to easily abandon at the strategic level. This will be a protracted and heavily invested all-around competition.

The ultimate winner of this competition may not be a single exchange, but the entire Web3 ecosystem. As more exchanges invest resources into L2 construction, as more users engage with on-chain applications through familiar exchange interfaces, and as more traditional financial scenarios are realized on-chain through these L2s, the boundaries of the entire cryptocurrency industry will be further expanded.
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