Nigerian Crypto Exchange Patricia Addresses Confusion Surrounding New Token

Summary

• Patricia released a whitepaper detailing the role of its newly launched Patricia Token to address user concerns.
• Patricia clarified that PTK is not a stablecoin but a debt token that serves to manage users' outstanding debts.
• Each PTK is backed by 1 USDT and Patricia pledges to redeem them in the future.
• Users' BTC and fiat balances will be automatically converted to PTK, with the conversion rate determined by the asset's USD value as of April 29, 2023.
• Patricia plans to publicly launch PTK across external exchanges after a successful repayment of user debt.

Embattled Nigerian crypto platform, Patricia, has moved to shed light on its new Patricia Token (PTK), aiming to address concerns swirling around its recent introduction. Initially met with doubt by users, Patricia's decision to unveil PTK triggered a flurry of queries on social media platforms. Responding to the uncertainty, the exchange has now issued a comprehensive white paper detailing the role of the Patricia Token.

The white paper disclosed that the Patricia Token is designed not as a stablecoin, but as a debt token serving to manage users' outstanding debts. Drawing a parallel with IOUs (I Owe You), the token serves as an acknowledgment of the exchange's debt to its users. The company further pledges to redeem each Patricia Token for 1 USDT in the future.

Earlier in May 2023, Patricia suspended withdrawals and deposits due to a security breach. While the company's subsequent announcements sought to appease, aggrieved users who have borne the brunt of the breach's aftermath remained unconvinced by the explanations. Among the myriad concerns raised, users are more concerned about what backs the token and the basis for unauthorized conversions of their assets. 

“All customers funds would be accounted for 1:1, pegged to a stablecoin, USDT. We would be redeeming these debt tokens from our customers monthly,” confirmed Patricia CEO Hanu Fejiro, in a statement. 

Per the white paper, users’ BTC and fiat balances will be automatically converted to Patricia Tokens, with the option to redeem for USDT. Notably, the conversion rate will be determined by the asset's USD value as of April 29, 2023. 

After a successful repayment of user debt, Patricia plans to public launch its token across external exchanges.

Patricia's move is reminiscent of Bitfinex's introduction of BFX token following a 2016 hack that resulted in loss of 119,756 bitcoins (equivalent to $72 million then). Similarly, Patricia aims to alleviate user distress by issuing debt tokens.