The trap: How the listing turned from a market into a $3 billion liquidation festival
It started like any other coin listing.
On April 24, Binance announced the removal of four low-liquidity assets - including $ALPACA . The coin, which was expected to fade into obscurity, instead exploded, rising by 150% within hours. This caught the attention of short sellers - after all, who would want to buy a coin on its way out?
Then came April 25. #ALPACA rose by another 175%, only to take another hit. Binance quietly adjusted the funding rate calculation from every 4 hours to 2, then 1. Short sellers piled in, believing this was a classic 'dead cat bounce.' But the bounce was not dead. It was bait.
By April 29, funding rates were raised to 4% per hour - a crazy number that almost guarantees pressuring short sellers to either exit or fade away. On April 30, ALPACA soared to its all-time high. Liquidations in just 4 hours exceeded the entire network. Open interest reached $110 million, with a 24-hour trading volume of $3 billion.
Behind the scenes, the project team did not hold any tokens. Market makers dumped their allocations right after the listing notice. Who owns ALPACA now? Essentially one entity - likely the 'shell owner' or an allied person. They weren’t trying to sell. They were hunting.
The market maker built a perfect trap: using the listing to ignite panic, raising the price to attract short sellers, and letting the high funding rate cause them trouble, then harvesting the liquidations as the price continued to rise. They didn't need to sell to profit - just push the price and watch the short sellers get wrecked.
The irony? What was supposed to be a cleanup process to protect users from 'bad' tokens turned into an advanced liquidation scheme. A coin that no one wanted became a money printer - not due to the fundamentals, but because of systemic vulnerabilities.
If there is a lesson here, it is this: short selling is never 'free money.' While you limit your losses with long positions, short positions come with unlimited risks. And when the rules change during the game, even a smart trader can get swept away.
This was not just a pump. $ALPACA
