勤劳撸毛人沸羊羊
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Binance's contract display algorithm has a major loophole, and many KOLs use this loophole to harvest users
Contract order loophole 1:
Binance order loss rate = loss amount/remaining margin
The order taker can increase the margin to carry the order to avoid liquidation, but the follower cannot increase it. Therefore, if the order is carried successfully, it will only be displayed as a retracement, and the follower has been liquidated.
Contract order loophole 2:
Rate = profit amount/initial margin
The profit obtained by the order taker by carrying the order several times and adding margin, the margin at the end of the floating profit is far more than the initial margin, so the yield curve will be seriously inflated.
This is why many contract order projects, the order taker did not liquidate but only retrace, while the follower was liquidated, because the order taker secretly added margin. In addition, this product design will lead to errors in the calculation algorithm of the rate of return, resulting in inflated returns.
In summary, this is a problem with the design of the order carrying product, and I hope @Yi He will pay attention to it. It is an unreasonable design to allow the order taker to replenish the margin by himself, which will cause the above two loopholes.
Finally, let's take Zhu Yici's order taking as an example. The level of the trader will not be evaluated here, only the operation facts will be stated.
In October, he started to carry the order and added margin every time when the position was about to be liquidated. Zhu Yici kept the data from showing liquidation by continuously increasing the margin. Please see the figure below. In November, when the position was close to liquidation, he added margin and took advantage of the algorithm loophole of Binance's order loss rate = loss amount/remaining margin to create an illusion that the order was about to be liquidated but the funds were only withdrawn by 50%. Finally, he carried it to a bull market, and the copycat of carrying the order began to rise. Then they took advantage of an algorithm loophole, the rate of return = profit amount / initial margin loophole (because the profit is obtained by adding margin by carrying orders several times, and the margin far exceeds the initial margin when there is a floating profit, so the yield curve will be seriously inflated). Through this loophole mechanism, with a profit of less than 70% of the principal, they used this carry order loophole algorithm to falsely pull the yield curve up to 150%, and then won the fourth place, and the first place in profit, and finally attracted countless leeks to follow orders, and finally a wave of liquidation after the profit sharing was received.
Contract order loophole 1:
Binance order loss rate = loss amount/remaining margin
The order taker can increase the margin to carry the order to avoid liquidation, but the follower cannot increase it. Therefore, if the order is carried successfully, it will only be displayed as a retracement, and the follower has been liquidated.
Contract order loophole 2:
Rate = profit amount/initial margin
The profit obtained by the order taker by carrying the order several times and adding margin, the margin at the end of the floating profit is far more than the initial margin, so the yield curve will be seriously inflated.
This is why many contract order projects, the order taker did not liquidate but only retrace, while the follower was liquidated, because the order taker secretly added margin. In addition, this product design will lead to errors in the calculation algorithm of the rate of return, resulting in inflated returns.
In summary, this is a problem with the design of the order carrying product, and I hope @Yi He will pay attention to it. It is an unreasonable design to allow the order taker to replenish the margin by himself, which will cause the above two loopholes.
Finally, let's take Zhu Yici's order taking as an example. The level of the trader will not be evaluated here, only the operation facts will be stated.
In October, he started to carry the order and added margin every time when the position was about to be liquidated. Zhu Yici kept the data from showing liquidation by continuously increasing the margin. Please see the figure below. In November, when the position was close to liquidation, he added margin and took advantage of the algorithm loophole of Binance's order loss rate = loss amount/remaining margin to create an illusion that the order was about to be liquidated but the funds were only withdrawn by 50%. Finally, he carried it to a bull market, and the copycat of carrying the order began to rise. Then they took advantage of an algorithm loophole, the rate of return = profit amount / initial margin loophole (because the profit is obtained by adding margin by carrying orders several times, and the margin far exceeds the initial margin when there is a floating profit, so the yield curve will be seriously inflated). Through this loophole mechanism, with a profit of less than 70% of the principal, they used this carry order loophole algorithm to falsely pull the yield curve up to 150%, and then won the fourth place, and the first place in profit, and finally attracted countless leeks to follow orders, and finally a wave of liquidation after the profit sharing was received.
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