CoinWorld news, Binance issued an important risk warning related to Binance Alpha, stating that recent suspicious activities have attempted to profit from the DEX liquidity mechanism. Common risk signals include abnormally high yields, severe price fluctuations, and excessive promotion of trading or incentive activities. Some strategies attract users to participate in liquidity provision through rebates and other means, creating a false impression of an active market while actually concealing structural risks and sudden price pullbacks.
Binance advises users to pay attention to the following matters:
1: Liquidity Providers (LP): Before adding liquidity, assess the project's market capitalization, Fully Diluted Valuation (FDV), and price volatility. Set liquidity ranges reasonably and be cautious of high-yield temptations in low liquidity environments;
2: Traders: Before trading, understand the token's liquidity and position distribution. Remain vigilant with projects that have high position concentration or experience sharp price increases without obvious reasons;
3: Risk warning banner: Binance will display prominent warnings on trading pages for high-risk projects (such as BR, KOGE, QUQ), reminding users to pay attention to potential risks.