🚀 Binance Tests Pre-Launch Trading "Limit Up Mechanism": RED Rises Up to 400% in Three Days, Controversy and Opportunity Coexist

On February 25, Binance announced that it would test the "Limit Up Mechanism" in pre-launch trading on Launchpool, applied for the first time to the RedStone (RED) token. This mechanism will limit the price increase of new tokens within 72 hours before their launch, gradually easing the restrictions in phases:

200% price increase limit (February 28, 18:00 - March 1, 17:59)

300% price increase limit (March 1, 18:00 - March 2, 17:59)

400% price increase limit (March 2, 18:00 - March 3, 17:59)

After that, trading will be completely open.

Purpose of the mechanism: To reduce extreme price fluctuations of new tokens and enhance market controllability. RED, as a cross-chain oracle project, has a total supply of 1 billion tokens and an initial circulating supply of 280 million tokens. Users can participate in Launchpool mining by staking BNB, FDUSD, and USDC.

Points of Controversy

1. Supporters: Believe the mechanism can curb speculation, reduce extreme volatility, and provide a "cooling-off period" for the market.

2. Opponents:

Violates the "decentralization" principle of the crypto market, and the presence of multiple platforms may intensify arbitrage.

Only limits price increases, with no limit on price drops, making the rule design unbalanced (as per Geight16's viewpoint).

The 72-hour price limit period is too long, and if the opening price is set too low, it may artificially create a "trading halt" effect (questioned by DeFi small miners).

Historical Comparison

After the "3·12 Crash" in 2020, Huobi attempted a circuit breaker mechanism, but it was not widely adopted due to the nature of free markets. Binance's former CEO, Zhao Changpeng, also stated that a circuit breaker mechanism only applies to monopolized markets and its compatibility with the crypto ecosystem is questionable.

Future Outlook: Binance's current test may provide new directions for exploring market stability, but whether it can be implemented long-term remains to be seen.

Do you support Binance's "Limit Up Mechanism"?

👉 Feel free to share your thoughts in the comments!

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