Both ZKJ and KOGE were manipulated to plummet, and a large number of retail investors who were swiping their trading volume on Binance Alpha were awakened from their dreams. They originally swiped their trading volume to earn some "interest" from the airdrop, but in the end, they even lost their principal. What is going on behind this? Who should pay for this disaster? I will try to explain it in depth:

1) Let’s talk about what’s going on first. Binance launched an activity on the Alpha platform to increase trading volume in exchange for an airdrop. ZKJ and KOGE were listed on Alpha as popular projects, and a large number of retail investors began to increase trading volume in anticipation of an airdrop.

However, just when Alpha activities were in full swing and retail investors were pouring in, a large investor withdrew about $3.6 million worth of tokens from OKX and directly dumped them on the market. ZKJ collapsed first, and due to the high correlation of the Koge pool, KOGE passively followed the decline. Retail investors saw the plunge and began to panic sell, further accelerating the collapse cycle. In the end, those users who "diligently" brushed the volume and waited for airdrops on Binance Alpha not only did not wait for the benefits, but also lost all their principal.

2) Who should pay for this “evil process”?

The project owner can say: We did not allow the big investors to dump the stocks, this is a market behavior, but it is unbelievable that the liquidity of a large project with a TGE valuation of 2B can be manipulated by a few big investors;

The big investors who dumped the stocks may say: I have the freedom to deal with my money, and I deserve to lose money, but what is their intention in making such a move at such a precise time, knowing that it will cause a chain reaction?

Binance Alpha platform can also say that we only provide a trading platform and users bear their own risks, but without the endorsement of Binance platform, how can users dare to spend huge amounts of money to participate? Now that something has gone wrong, how can they distance themselves from it?

You see, all the stakeholders in this chain seem to have reasons to distance themselves from the issue, but retail investors are the only ones who are confused: How come this hot Alpha Summer is over before it even began? Where is my principal?

3) So where exactly did the problem lie? In my opinion, what seemed to be an accidental market risk was actually a premeditated systematic harvest:

The project owner "designed" a correlation trap, big investors chose the precise "time" to strike, Binance provided a "legal" harvesting platform, and retail investors bore all the losses.

Specifically:

Binance Alpha made strategic mistakes due to competition anxiety. Seeing OKX gaining ground in the Web3 DEX and wallet fields, and its own on-chain trading share being eroded, it became anxious. Alpha was originally designed very well - giving project owners a testing period, users an observation period, and itself a risk control period.

But Binance obviously overestimated its risk control capabilities and underestimated the "malice" of market participants. In order to quickly regain market share, it transformed Alpha from an "observation platform" to a "main battlefield". To put it bluntly, Alpha was not intended to achieve a better Binance, but to create a new "Binance" on the chain?

What's worse is that Binance over-idealized the market environment when designing the Alpha mechanism. The "win-win-win" model envisioned by Binance sounds wonderful: the project party tests the market through Alpha, the users gain profits by swiping the volume, and the platform earns commissions? This logic sounds wonderful, but it is based on a fatal assumption - everyone will "perform according to the script". What about the reality? In this small currency market with fragile liquidity, any artificially created enthusiasm is a false prosperity that will burst at the slightest provocation.

Binance seems to have forgotten that while the Alpha platform provides convenience, it also creates a perfect "hunting ground" for malicious operators - after all, there is Binance's endorsement to increase credibility, an incentive mechanism to gather retail funds, and sufficient liquidity to be harvested. It's all done.

With this combination of measures, Alpha, originally an observation area used for "risk isolation", was transformed into a hotbed for "precision harvesting" by large investors.

In the final analysis, the whole incident exposed the structural defects of the current market ecology. Each participant is pursuing short-term profit maximization: the project party wants to quickly exit liquidity and cash out, the big players want to accurately arbitrage, the trading platform wants to increase trading volume and income, and the retail investors always want to grab excess returns. Everyone is making their own calculations, which ultimately resulted in a "perfect" multi-party game defeat.

But after all, this incident happened on the Binance platform, the world's largest exchange, which should have been the "stabilizer" of the entire industry, but ended up becoming the main stage for this harvest drama.

Binance's Alpha strategy this time is essentially to use its own brand reputation to guarantee the harvesting behavior of others. They want market share, trading volume, and commission income, but the result is that they shoot themselves in the foot.

Alas, it is a pity that if the “head players” act like this and no one is responsible for maintaining order, when will the industry truly mature? The answer is probably farther away than we imagined.