1. Human weaknesses: The 'addictive trap' of contract design

  1. The thrill of instant feedback
    The leveraged characteristics of contracts amplify profit fluctuations by 10 times, 100 times, or even higher.The thrill of doubling assets in minutesActivating the brain's reward circuit, similar to gambling mechanisms, creates a dependency on the belief that 'one more play could turn things around.'

  2. The distortion of loss aversion
    When losses occur, players often try to 'get back at it' because they are unwilling to accept defeat.They double down in an attempt to recover their funds(similar to the gambler's fallacy), ultimately falling into a vicious cycle of 'losses → increasing leverage → liquidation.'

  3. Illusion of control
    Technical analysis, candlestick charts, and indicator tools create an illusion of a 'predictable market,' leading people to mistakenly believethat they can outsmart the system, overlooking the destructive nature of black swan events.

2. Mechanism traps: The 'legitimate harvesting machine' of exchanges

  1. The essence of a negative-sum game

  • Exchanges continuously siphon off funds through funding rates, fees, and slippage losses.

  • For example: Opening a 100x leverage position, a price fluctuation of 1% can double or liquidate, but a single trade fee may eat up 0.1% of the principal, effectively making high-frequency traders work for the exchange.

  • Precision targeting of the liquidation engine

  • Exchanges have data on liquidation points; when a large number of long/short positions gather near the same price, they may trigger a chain liquidation through short-term spikes (instant abnormal price fluctuations), harvesting users' margins.

  • Low barrier to entry temptation

  • With just 10 USDT (approximately 70 RMB), one can open a 100x contract, misleading novices into thinking that 'small money can lead to great wealth' without risk, while ignoring that minor fluctuations under high leverage can lead to complete loss.

3. Information pollution: The brainwashing of survivor bias

  1. Selective Spread

  • Data: A certain exchange's statistics show that the liquidation rate for retail traders following others exceeds 95% within 3 months.

  • Narrative distortion

  • Statements like 'contracts are the most efficient money-making tools in the crypto world' and 'one must leverage during a bull market' are repeatedly spread, concealing the long-term probability disadvantage (mathematically, the expected value of leveraged contracts is negative).

Experienced traders only engage in real trading, while the team has positions to enter quickly.

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