The points game of Binance Alpha is pushing 'involution' to extremes at an unprecedented speed. When the points threshold once broke the 200-point barrier and airdrop returns plummeted to around 25 USD, the decline in the user input-output ratio sparked widespread community discussions.
Beneath this seemingly winner-takes-all feast, one perspective suggests that its huge traffic is 'overflowing' to other ecosystems like Sui and Solana, injecting vitality into them. However, what is the real situation of this overflow effect? What profound impacts will this 'fluffing' frenzy ignited by Binance Alpha ultimately bring to the industry?
The Illusion and Reality of Traffic 'Overflow': Observations on the Alpha Effect of Sui
The points game mechanism of Binance Alpha has been detailed in previous texts and will not be repeated here. However, overall, with more and more user participation, the ultimate result is that the returns of each airdrop have a clear upper limit, while the points threshold continues to rise. In this situation, users must further compress costs to retain profit margins.
Image Source: PANews
Recently, Binance Alpha began launching Sui ecosystem tokens and subsequently announced multiple Alpha projects in the Sui ecosystem. The inclusion of the Sui ecosystem happens to provide users engaged in volume manipulation with a new cost advantage. On May 14, multiple KOLs, including @lianyanshe, pointed out that the projects in the Sui ecosystem, such as $NAVX, had lower gas fees when manipulating trading volume and would not be attacked by sandwich bots, resulting in overall lower wear and tear, thus making several projects in the Sui ecosystem the 'new volume kings' of Binance Alpha.
If most users choose this form, it could indeed bring considerable trading volume and token heat to the Sui ecosystem. However, it seems that similar effects have not appeared in reality. According to a PANews survey, the trading volume of Sui ecosystem tokens on Alpha is not substantial, with the highest $NAVX having a 24-hour trading volume of only 3.34 million USD, while others like $HIPPO, $BLUE, and $SCA have trading volumes ranging from several hundred thousand to tens of thousands of USD. In contrast, several projects on the Solana chain have trading volumes basically above 10 million USD, with several leading projects on BSC exceeding 200 million USD in trading volume. Nevertheless, for $NAVX, launching on Binance Alpha did indeed increase its trading volume, with the main pool trading volume reaching 1.6 million USD on May 13, while the previous day's trading volume was only several thousand USD.
Image Source: PANews
In the actual trading process, it can be observed that the official cross-chain bridge in the Binance wallet currently does not support the exchange of assets between the Sui ecosystem and the BSC chain. Users cannot directly exchange assets like $BNB for USDC on Sui, and to save this wear and tear, they must endure the wear of using other cross-chain bridges.
Solana's Leading Meme Unexpectedly Attracts Capital Inflow
Solana is one of the ecosystems with the most projects launched on Binance Alpha, apart from BSC. Since May, the overall DEX trading volume on Solana has indeed seen a significant increase. On May 4, Solana's DEX trading volume was 2.2 billion USD, and by May 15, this figure had risen to 4.59 billion USD, more than doubling. Additionally, several leading tokens launched on Binance Alpha, such as $MOODENG and jellyjelly, have indeed seen a significant increase in trading volume recently, with a notable price increase. Among them, $MOODENG rose 140% from its launch to May 14, and the average price increase of the 6 Solana ecosystem tokens launched on Binance Alpha in May also reached 12.32%, making it one of the few ecosystems with positive performance among public chains.
Image Source: PANews
Apart from the Sui and Solana ecosystems, the Sonic ecosystem has recently benefited the most from this overflow effect. As a new brand of Fantom, Sonic currently needs exposure and capital inflow to break through. Although only 3 Sonic ecosystem projects have been launched on Binance Alpha, the average price increase of the two tokens launched in May reached 65.93% (data as of May 14), ranking the highest among all ecosystems. However, due to the smaller number of tokens launched, it cannot be concluded that Sonic ecosystem tokens have higher potential.
Image Source: PANews
However, on May 1, when Binance Alpha announced the launch of two Sonic ecosystem projects, the DEX trading volume of the Sonic ecosystem indeed saw a significant increase. It soared from over 73.4 million USD the previous day to 194 million USD.
Image Source: PANews
Project Myth: Launching at Peak or Value Discovery?
From the perspective of projects, after launching on Binance Alpha, will prices have the chance to soar? Data shows that the 23 tokens launched in May had an average price change of -5.04%. Among them, the largest drop reached 75%. Although on the chart, the prices of these projects experienced a spike shortly after launching on Binance Alpha, they typically show significant pullbacks and declines after the heat subsides. This suggests that launching on Binance Alpha does not mean the birth of a golden dog; it merely adds another trading port.
Moreover, for projects that launched with airdrop activities, it seems they did not gain market favor as a result. The 7 tokens with airdrop activities launched in May had an average decline of 31.5%, and as of May 14, all were in a declining state. This suggests that for projects, airdrops and volume manipulation activities cannot drive price trends upward.
Image Source: PANews
Overall, the average market cap of the projects launched on Binance Alpha reached 70 million USD, with the lowest market cap of tokens being about 1.6 million USD, and the highest market cap of $MOODENG reaching 271 million USD. Among them, several newly launched tokens in the Solana ecosystem had an average market cap exceeding 100 million USD, indicating a higher requirement for the Solana ecosystem.
Endgame of 'Involution': Arena for Professionals and Departure of Ordinary Users
For ecosystems and projects, Binance Alpha represents exposure and a traffic aggregation hub. For users, the current involution is phasing out ordinary users, becoming a battleground for professional studios and large players. With the points threshold reaching 205 points, it means that users need to earn at least 15 points daily to catch up with the threshold. With a principal of 1,000 USD (earning 2 points), additionally, they need to achieve a trading volume of 8,000 USD daily to accumulate points. The daily slippage + gas fees for this trading volume might exceed 10 USD. If they fail to reach the next threshold or receive fewer airdrops, they will face a losing outcome that is both costly and effortful. The latest airdrop result for the RDAC token basically only sold for 25 USD, making it hard to cover the cost of 205 points.
It is foreseeable that the points threshold will continue to rise, and according to current rules, the higher the required points, the exponentially increasing trading volume needed. Either Binance Alpha will increase the airdrop amounts for single addresses, or a large number of users will exit the involution, bringing the points threshold back down to a reasonable range. But regardless, this involution game seems to be nearing its end. The DEX trading volume on the BSC chain has also begun to decline in recent days, dropping to 2.64 billion USD on May 15, down 16.4% from 3.16 billion USD on May 12.
Overall, the 'traffic overflow' effect of Binance Alpha shows significant differences in manifestation between different ecosystems. The Sui ecosystem has not absorbed a large amount of volume manipulation behavior as expected; instead, the Solana ecosystem has demonstrated stronger positive interaction and growth. For project parties, the short-term glow brought by Alpha is often difficult to translate into sustained value support, and the norm has become a price retreat after launching at a peak, with airdrop activities failing to become the savior of prices. Each project providing airdrops has become a 'payment hero' for promoting Binance wallet products.
The more core issue is that this points-driven frenzy is ruthlessly squeezing ordinary users out of the table. The continuously rising points threshold and exponentially growing trading volume demand, combined with the increasingly shrinking airdrop reward rates, mean that Binance Alpha is gradually evolving into a 'zero-sum game' for professional studios and large players. The recent decline in DEX trading volume on the BSC chain also seems to indicate that this model, heavily reliant on high-intensity 'involution', is nearing its sustainability tipping point.
This article is reprinted with permission from: (PANews)
Original Author: Frank, PANews
'Binance Alpha is too intense! Points threshold skyrocketing, airdrop returns plummeting, how long can the fluff game last?' This article was first published in 'Crypto City'
