Foresight News reports that Binance has issued an important risk warning regarding Binance Alpha, noting recent suspicious activities aimed at profiting from users providing liquidity for DEX. Common risk signals include: abnormally high yields, rapid price fluctuations, or excessive promotion of trading activities and incentives. A common strategy is to attract users to provide liquidity through trading rebates or similar incentives. These mechanisms can simulate a positive market environment and active trading but often mask significant structural risks and potential sudden price reversals.
Based on the reasons above, it is strongly recommended that users pay attention to the following: 1. For liquidity pool (LP) providers: Before adding liquidity, carefully assess the project's market capitalization, fully diluted valuation (FDV), and price volatility. Choose your liquidity range wisely, as providing liquidity carries risks, including impermanent loss. Be especially cautious of abnormally high LP yields in low liquidity environments. 2. For traders: Before trading, understand the liquidity and holder distribution of the tokens. Be highly vigilant of tokens that show a highly concentrated holding or sudden price increases without obvious reasons. Monitor liquidity changes, token distribution, and trading patterns. Stay informed and make decisions based on research rather than speculation. 3. Risk warning banner: For high-risk projects, Binance will display a risk warning banner on the token trading page (e.g., BR, KOGE, QUQ). Please pay attention to such risk warnings before trading.