Author: Fairy, ChainCatcher
Editor: TB, ChainCatcher
Last night was not a peaceful night. The most popular 'massive brushing pool' targets ZKJ and KOGE in Binance Alpha experienced a coordinated flash crash.
In just two hours, ZKJ plummeted from $2 to $0.29, a drop of 85%. KOGE fell sharply from $57 to $24, even touching $8 at one point. Its market value vanished, and liquidity evaporated in an instant.
The joint collapse of ZKJ and KOGE hit the soft spot of the Alpha model like a heavy punch. Is it an unexpected loss of control of individual projects, or is the entire incentive mechanism approaching a critical point?
The collapse of the 'brushing pool' model
In the game of Binance Alpha, users generally prefer to use tokens with 'low wear' to boost volume, and ZKJ and KOGE are representative of brushing tools, accounting for over 87% of Alpha token trading volume, especially ZKJ, which has been used by users for brushing points for more than a month.
However, the chips of ZKJ and KOGE are highly concentrated; the top ten addresses of KOGE hold as much as 93%, and ZKJ is close to 80%. Behind the brushing of volume lies a hidden liquidity risk that could be triggered at any moment by the 'controllers.'
Source of the image: gmgn
Sixteen days ago, ZKJ and KOGE jointly established a liquidity pool for ZKJ/KOGE on PancakeSwap, which accumulated over $30 million in equivalent tokens. The community once spread rumors that ZKJ-KOGE had extremely low wear, attracting a large number of volume brushes, laying the groundwork for the flash crash.
According to on-chain analyst Ai Yi, three major addresses caused ZKJ and KOGE to collapse sequentially last night under the dual pressure of 'large liquidity withdrawals + continuous selling.'
These three major addresses have clearly defined roles, sequentially withdrawing millions of dollars in bilateral liquidity, and then using KOGE to exchange for ZKJ and concentrate on selling ZKJ in a 'relay-style suppression' to gradually trigger a cliff-like drop in token prices. KOGE experienced a significant decline first, and after the price crash of KOGE, it further catalyzed the decline of ZKJ, completing the harvesting of two token LPs and holders.
Ai Yi pointed out that in addition to these three main forces, there are also multiple 'cooperative addresses' at the level of hundreds of thousands of dollars participating simultaneously.
Source of the image: Ai Yi
Why did the big players suddenly withdraw liquidity?
In fact, just the day before yesterday, the KOGE token project party 48 Club released a 'meaningful' announcement: '$KOGE has been fully released from day one, with no lock-up. 48 Club has never committed in any form to not sell the treasury holdings. Just like Binance never said it wouldn't sell $BNB. Please do your own research, and take risks at your own risk.'
Once this announcement was made, it raised market awareness, causing KOGE and ZKJ to experience slight declines that day, with many community users viewing it as a 'dumping warning.' Although crypto KOL Australian Lion Brother Leon later revealed that the project party denied any connection to the dumping, this 'risk warning-style' official tweet likely became one of the key catalysts for big players withdrawing liquidity. Once liquidity participants sense signs that the project party may reduce holdings or withdraw liquidity, they will quickly take withdrawal actions to avoid losses from sudden declines.
Meanwhile, ZKJ is also facing a critical time point: on June 19, approximately 15.53 million tokens will be unlocked, accounting for 5.04% of the current circulating supply, with a market value of approximately $30.3 million. Coupled with the recent significant decline in overall trading volume from Alpha activities, the profit-making effect is weakening, and liquidity providers will naturally reassess the cost-effectiveness of continued participation.
In addition, there are some other speculations in the market. Crypto KOL Danny stated that due to the extremely high APY of the KOGE-ZKJ pool in the early stages, it attracted a large number of users to follow suit and quickly accumulated tens of millions of dollars in liquidity. After that, big players quietly established short positions on ZKJ in centralized exchanges. When the predetermined 'detonation window' arrived, they began to exchange KOGE for ZKJ and then quickly sell ZKJ for USDT, achieving price suppression while earning contract profits, completing a 'spot + contract' dual harvest.
How much longer can Alpha's dividend period last?
Since the launch of the Binance Alpha points strategy, the trading volume of Binance Wallet has surged rapidly, with market share exceeding 90%, driving the overall trading volume of the wallet to increase a hundredfold compared to the past, and the on-chain trading volume of BNB Chain has also risen significantly.
On the surface, this is a successful case of 'overall boosting' platform user activity and on-chain ecology. However, when we peel away the facade of this data boom, it is not hard to see that this is a 'pseudo-activity' bubble dominated by incentive points and driven by user volume brushing.
The sudden collapse of ZKJ and KOGE was like a needle, piercing through this bubble ecosystem. These two projects exposed a series of structural issues, such as the uneven quality of tokens on Alpha, the high degree of control over certain projects, and weak liquidity. The high trading frequency and expected high returns created by Alpha may not have been based on a healthy and sustainable user participation logic.
At the same time, the points threshold for Alpha continues to rise, breaking the initial illusion of 'everyone can participate.' Now, the Alpha score line has been raised to 247 points, which is close to the breakeven point for many retail investors. Crypto KOL Bing Frog pointed out that whether it is the points consumption mechanism, fee adjustments, or points integration into financial products, Alpha's 'dividend period' has actually come to an end. He stated, 'In fact, this has never been a fair competition; any incentive mechanism built on the foundation of competition is essentially not about 'encouraging participation,' but about 'accelerating elimination.'
After the incident, Binance Alpha introduced new regulations, announcing that trading pairs between Alpha tokens would no longer be counted towards points calculation. However, looking at the evolution of its rules, Alpha seems to have been 'patching' along the way; whenever problems arise or controversies break out, it begins to make fixes.
However, rather than constantly making corrections, perhaps we should have questioned from the beginning: what kind of incentive mechanism can truly serve the long-term interests of ordinary users? And what truly benefits the industry?
