Author: Kevin, the Researcher at Movemaker
The failure of Binance Alpha 1.0 and the strategic shift to Alpha 2.0
Due to the failure on the Binance wallet, Binance Alpha1.0, which serves as a liquidity bridge connecting Binance to the chain, failed. Before the upgrade, the trading volume and the number of users fell to a record low, and the total daily trading volume of all tokens on Alpha was less than $10 million, and the number of daily transactions was less than 10,000, which is undoubtedly far from the volume of the Binance exchange. Not only can it fail to attract on-chain users and corresponding liquidity for the exchange, but it will have a negative impact on marketing.
Therefore, Binance Alpha was upgraded to Binance Alpha 2.0 at the end of March. Unlike version 1.0, which could only be accessed through the Binance Web3 wallet, the upgrade integrates Alpha directly into the Binance app, allowing users to purchase Alpha tokens using funds from the exchange.
The inability to scale wallet users means that Binance’s strategy of using Binance Alpha as a bridge to compete for on-chain liquidity will not work, attracting liquidity and enhancing BSC’s attention. In other words, when Binance’s growth on the chain cannot form a natural positive cycle, it can only do the opposite, by injecting the traffic in the exchange into the Alpha, so that Binance Alpha can achieve quantitative change to attract the attention of the market, complete the qualitative change under the effect of sufficient wealth, and completely become an outpost for Binance to attract liquidity on the chain, amplifying the presence of the BSC chain.
Waiting period under a lack of consensus confirmation: Alpha 2.0’s trough before the “gunshot”
This idea is reasonable, but for it to work, a major premise is needed, which is to provide a consensus for observing funds in a market where liquidity is not abundant, using this as a catalyst to ignite market attention on Binance Alpha 2.0. Without such a trigger, even if Alpha is upgraded to 2.0, based on data from late March to mid-April, whether it is the depth of pending orders or the promotion of wealth effects, it can only stimulate market discussion heat for less than a week within a short window, quickly returning to silence, and again falling into a trough in early April.
Of course, this is not a failure of the Alpha 2.0 upgrade or a mistake in the strategic approach, because in order to increase the scale of Alpha, that is, the total trading volume of Alpha, in addition to introducing liquidity in the DEX, the only way to inject liquidity into Binance’s own exchange is to inject liquidity. The reason why 1.0 chooses the former scheme is that, on the one hand, this is a ready-made way of playing on second-tier exchanges, which can be quickly accepted by the market when Binance moves over; On the other hand, Binance’s absolute confidence as a leading exchange is different from the starting point of second-tier exchanges, which regards the introduction of on-chain liquidity as the foundation or foundation, so it can achieve agile response in terms of user experience or marketing response, while Binance’s introduction of on-chain liquidity is more of a precautionary measure, rather than an urgent need. Therefore, the poor experience of the Binance wallet and the sharp downturn in the market trend in Q1 made it difficult for Binance to quickly turn around and adjust, resulting in the collapse of Alpha1.0.
Therefore, it can be said that the reverse injection of liquidity from the exchange is Binance’s last resort and the most powerful upgrade. However, judging from the Alpha2.0 data of 3.20-4.20, it can still be described as bleak. Why? Because even if the pipeline or path for injecting liquidity has been successfully built, the influx of liquidity still needs a signal, a gunshot. In the current climate of despair in which all narratives in the crypto market have been shattered, only Bitcoin can take on the role of such a starting gun.
Bitcoin signal is activated, Alpha 2.0 trading ecosystem welcomes a turning point.
The price of Bitcoin and the macroeconomic trend in the United States have been closely integrated, and Bitcoin needs to be supported by market confidence from the macro to get out of the new market. In the previous article, Bitcoin was entrenched around 85,000 for a week waiting for macro confidence confirmation. Therefore, when the market is mired in the fear of tariffs and recession, and stimulated by the 90-day tariff cooling-off period and the strong performance of the US economy and the progress of Sino-US negotiations, a short market easing cycle appears, and there is no need to consider the risk of further tariff deterioration, and it is also possible to ignore the recession leading to capital hedging, and in the next few decades, the source of bearishness will be tightly contained, which is a full confidence confirmation for Bitcoin. The market started on April 21, and it can be seen from Ethereum’s three-day strong breakout that the big money is rushing and the market has entered the second stage.
Therefore, when Bitcoin sends a signal, the hungry liquidity will first be injected into high-risk assets, and the pipeline created by Alpha 2.0 will begin to take effect.
Incentive Points and Token Bubbles: The Dual-Engine Strategy of Alpha 2.0
In order to weaken the listing effect of Binance, it is necessary to divert the liquidity of new coins when they are listed in advance, and at the same time ensure that these liquidity are indeed in Binance and not spill over to other exchanges. So when Bitcoin signals that the short-term consensus in the market is strong, the next direction for Alpha 2.0 is very simple, i.e. the way the bookmakers hype the narrative in each cycle is how to create a bubble in the reservoir. Alpha 2.0 chooses two ways to make foam:
Bottom-up积分促销
Alpha Points are direct incentives to increase trading volume and liquidity, obtained by adding balance points and trading volume points over a period of 15 days.
Balance Points: Assets with different balances held in exchanges and wallets can earn different points daily. For example: $10,000 to <$100,000 = 3 points/day.
Volume Credits: Alpha Token buy-in points, e.g. 1 point for every $2 buy-in, and an additional 1 point for each purchase amount doubled (e.g. $2 = 1 point, $4 = 2 points, $8 = 3 points… ）
The level of Alpha points is related to the eligibility for airdrop activities. For example: Having 142 Alpha points can qualify you for an airdrop of 50 ZKJ tokens.
The purpose of Alpha2.0 is to provide incentives for the widest range of users, through a well-designed incentive mechanism, to encourage users to maintain a certain asset balance in exchanges and wallets and actively participate in the purchase and trading of Alpha tokens, and ultimately promote the depth and activity of the market. The double trading volume points campaign launched on April 30th has mobilized the enthusiasm of longer-tail users, as long as they place a pending order or buy BSC tokens directly, they can get 2x points. Binance allows a wider range of users to obtain air investment qualifications through double points, creating market heat and activity, so that the main force of Alpha tokens has more sufficient motivation to pull the market.
Judging from the Alpha 2.0 trading volume since April 20, Binance can effectively increase the asset holdings and trading volume on the platform, as well as further enhance the overall activity and depth of the market. As more and more users actively participate in it, the market liquidity of the Alpha token will be significantly enhanced, and the continued operation of this virtuous cycle will be the key to Binance’s differentiation in the future market competition.
Liquidity convergence forming a leading effect
Observing the daily trading volume trends of Alpha tokens after the shift to Alpha 2.0, it can be seen that the change in rules itself has not generated sufficient stimulation, or rather, has not sparked interest among market participants. However, the signal from Bitcoin is a strong consensus, and the tokens that primarily constitute the daily trading volume of Alpha tokens are: $KMNO, $B2, $ZKJ.
$KMNO: The DeFi protocol Kamino Finance on Solana began to decline unilaterally after entering Binance Alpha on February 13. Over the course of a week starting from April 28, trading volume began to surge, increasing 40 times compared to two weeks prior, but the price only fluctuated between 0.065 and 0.085. Until May 6, when it was listed for spot trading on Binance, trading volume returned to normal levels.
$B2: Bitcoin ecosystem L2 protocol, launched on April 30 and entered Binance Alpha. The highest market cap reached only 30 million USD, currently at 27 million, trading volume has gradually increased after the launch, showing a clear pattern, with trading volume expanding during Asian daytime and weakening at night.
$ZKJ: ZK Protocol Polyhedra Network, launched on May 6 and entered Binance Alpha. Market cap is $130 million. The trading volume fluctuates similarly to $B2, increasing during the day in Asian time and decreasing at night.
Asia Daytime Driving Model: A True Picture of Alpha Liquidity
It is clear from the chart of the hourly trading volume that the main volume-contributing token of Alpha 2.0 has a strong intraday cyclical volatility characteristic. This pattern of regular trading behavior was repeated over the four-day period from May 8 to May 11, which was manifested in a significant increase in trading volume from early morning to noon UTC (roughly 8:00 to 20:00 Beijing time) every day, and a significant decline or even downturn in trading volume from afternoon to late night UTC (late to early morning Beijing time). This rhythm is completely consistent with the schedule of the Asian trading time zone, indicating that the trading ecology of Alpha 2.0 is highly dependent on the liquidity support of the Asian market at this stage. Especially during the daytime active hours in Asia, the total trading volume in a single hour exceeded $25 million many times, and even approached $30 million at one point, showing a high concentration of market-making and trading operations.
In addition, from the perspective of the trading volume distribution structure of each token, ZKJ (yellow) is the absolute main force of trading volume, occupying a dominant position in most time periods. Its trading volume changes synchronously with the overall market rhythm, which also further strengthens the inference of “systematic market making”. In addition to ZKJ, tokens such as B2 and SKYAI are also significantly active during peak hours, forming a “market-making matrix” in the Alpha 2.0 ecosystem. The trading volume of these tokens is highly consistent, not like spontaneous trading by natural users, but more like batch pending orders and matching operations controlled by automated market-making systems or bots. It is highly likely that the daily fixed session initiation and exit of the fixed session will be due to a set of standardized, automated trading procedures, which may be behind the team’s centralized operation during the day during Asian time, and the strategy of closing or drastically curtailing activities at night.
Overall, the current trading activity of Alpha 2.0 presents a typical “Asian daytime market-driven model”, and its market depth and liquidity are largely dependent on the market-making behavior of a few leading tokens, while global natural user trading. Although this model can support trading volume and activity through centralized market-making behavior in the short term, it also exposes the dependence of the platform ecosystem on a single time zone and limited market-making entities. Once these market-making accounts cease to operate, the trading volume of the platform may fall off a cliff. In order to build a more sustainable trading ecosystem in the future, Alpha 2.0 needs to introduce more time zones and more participants’ natural trading behaviors, so as to get rid of the current situation where the rhythm is too single and the traces of market making are obvious.
As can be seen from the chart below, since April 20, the platform’s trading activity has entered a stage of rapid growth, with the number of transactions climbing rapidly from hundreds of thousands in the early days to an average of nearly one million per day. However, since around April 28, while the volume has remained high, the number of daily transactions has leveled off, and there has even been a slight decline in recent days. This divergence of “slowing down the growth rate of the number of transactions and continuing to increase the trading volume”, combined with the previous “hourly trading volume distribution chart”, points to a very obvious structural change: the trading behavior of the Alpha 2.0 platform is gradually shifting from the high-frequency and low-value “retail swiping” model to the low-frequency and high-value “market-making-driven” model.
The main driving force behind this change is likely to be the strengthening of the market-making strategy of the top tokens. The trading volume of tokens such as ZKJ and B2 shown in the previous chart has been greatly amplified during a specific period of time, especially during the Asian day, indicating that these tokens have become the liquidity hub of the platform. The trading of such tokens is usually done by a small number of market makers or automated trading bots, and their strategies may no longer pursue high-frequency matching transactions, but carry out pending orders, matching, arbitrage and other operations with a large trading volume, so even if the growth of the number of transactions is limited, the single trading volume may increase significantly, thereby driving the overall trading volume to continue to rise. This structural phenomenon of “quality substitution”, combined with the incentive for users’ pending orders in the double points activity, shows that Alpha 2.0 has entered a new stage characterized by deep liquidity optimization and centralized trading of core tokens.
It is further inferred that this structural change also reflects the development bottlenecks and adjustment strategies that the platform is currently facing. On the one hand, in the original stage of the platform, a large number of tail tokens and retail investors participated in the number of transactions, but the marginal effect of this growth model gradually weakened. On the other hand, the platform tries to maintain or even increase the overall trading volume by introducing a stable market-making mechanism and a head token ecology, so as to attract more liquidity and user attention. If this trend continues, Alpha 2.0 will face strategic choices in two directions: one is to further expand the participation of market makers and guide the formation of more “high-value and low-frequency” main trading pools; The second is to optimize the user experience and fee structure, re-stimulate the intraday activity of retail investors, and achieve a new peak of “high-frequency and high-value” transactions.
Inter-chain Switching and Market Making Structure: The Liquidity Migration Logic of Alpha 2.0
As can be seen from the chart below, the daily trading volume of Alpha 2.0 tokens has undergone a significant structural migration between different blockchains, showing a clear phased dominant chain change. Since mid-March, after the Alpha 2.0 rule change, BNB Chain (orange) has been the absolute dominant force, accounting for nearly 100% of the trading volume. However, after entering the end of March and the beginning of April, Solana (green) gradually rose and began to compete with the BNB chain for dominance, and completed the “overtaking” of BNB in mid-April, and steadily occupied more than 60%-80% of the daily trading volume share in the following two weeks, becoming the liquidity home of Alpha 2.0.
In the period from late April to early May, the BNB chain regained its dominant position, with its share rising back to nearly 60%-70%, marking a round of inter-chain liquidity returning.
Several key changes can be interpreted from this trend: First, the liquidity of Alpha 2.0 is highly transferable, and it can also be seen that BSC’s activity heavily relies on market makers and bots; second, Solana once became the preferred platform to carry Alpha trading demand due to its high-speed and low-cost on-chain performance, but this leading position is not stable; as soon as market sentiment reverses, a massive amount of trading volume can be injected into BSC at any time.
Overall, the current trading volume of Alpha 2.0 reflects a typical “liquidity arbitrage + incentive migration” driven model in the rhythm of migration between chains, rather than a long-term focus on a single chain. This also indicates that the future traffic construction of the Alpha platform will still be constrained by external variables such as inter-chain competition, cross-chain deployment costs, and incentive strategies, and it cannot be ruled out that a new round of major chain switching may occur.
When comparing the changes in trading volume and transaction counts of the Alpha 2.0 token on BSC and SOL, it can be observed that overall, Binance Alpha 2.0 experienced explosive growth after mid-April, and this growth trend continued until mid-May.
In terms of trading volume, Solana performed particularly well in the early stages (especially in mid to late April), with its transaction count significantly higher than that of BSC, indicating that during this phase, the main liquidity of Alpha 2.0 was still on Solana. However, by early May, the trading volume of BSC quickly caught up and even surpassed that of Solana, showing that over time, the activity of Alpha 2.0 on BSC rapidly increased, possibly related to adjustments in market-making strategies. Although Solana still maintained a stable trading volume, its growth rate appeared to slow down slightly.
Opportunities and Concerns During the Emotional Repair Period: The Next Challenge for Alpha 2.0
In the current recession and the recovery period after the tariff shock, the crypto market has fallen into a deadlock of lack of narrative breakthroughs: without a new main story, it is impossible to form a market synergy, and the common leading effect in the main narrative is difficult to appear, and naturally it is difficult to produce a real wealth effect. Although USDT is in abundant supply in the market, the overall liquidity is still tight in a side-by-side comparison. At this time, no other narrative can take on the responsibility of driving the overall situation, and only Ethereum can play the dual role of “narrative core” and “liquidity reservoir” in the fleeting wave. Although it is difficult to firmly say that it is the expectation of network upgrades and the actual landing of ETF pledges that have brought buying to Ethereum, but from another perspective, the current market has been so bad that it needs Ethereum to become the main carrier of market sentiment and capital flows.
When there is a short-term explosive rise in Ethereum or some Memecoin or other hot assets, strong bank projects and top exchanges (such as Binance) must not hesitate to keep up with the heat, and must not stay out of the situation or miss the opportunity by waiting and seeing. Because there is still uncertainty about whether the current round of small-cycle bull market, catalyzed by sentiment repair, can further evolve into a larger-scale bull market. Once the strong village project does not respond in time to the price K-line or the exchange in terms of trading volume, it is easy to be judged by the market as “insufficient energy” and then abandoned. Even if the current bull market ultimately fails to escalate, there are still plenty of potential tailwinds (e.g. liquidity recovery) to kick-start the market. In this context, strong banks and exchanges should use each upward cycle to cultivate market confidence and consolidate wealth consensus: as long as they continue to inject liquidity and actively create transactions before the market pullback, they can establish a positive image of “abundant funds and sensitive market smell” in the hearts of investors. On the contrary, once you choose to “stand still” at a key node, it is easy to be regarded as lacking continuous driving force, and it will be difficult to gather enough market synergy when a larger level of market arrives in the future.
For Alpha 2.0, the current period of emotional healing presents both opportunities and concerns. In terms of real on-chain traffic, there is almost negligible activity on BSC – which is clearly not the ideal outcome that Binance and its ecosystem would like to see. At present, the hustle and bustle of Alpha2.0 relies more on the centralized trading of market makers and project parties, rather than the spontaneous participation of global retail investors. This kind of “artificially piled” superficial trading volume, once it loses external stimulus, is very likely to fall off a cliff. How many times will we need to go through the baptism of the bull or bull market in the future before we can gradually cultivate a truly spontaneous and positive liquidity ecology? This is the core variable that we need to focus on when we look at the development of Alpha 2.0 in the future.
About Movemaker: Movemaker is the first official community organization authorized by the Aptos Foundation and jointly initiated by Ankaa and BlockBooster, focusing on promoting the construction and development of the Aptos ecosystem in the Chinese-speaking region. As the official representative of Aptos in the Chinese-speaking area, Movemaker is committed to building a diverse, open, and prosperous Aptos ecosystem by connecting developers, users, capital, and numerous ecological partners.
Disclaimer: This article/blog is for informational purposes only and represents the personal views of the author and does not represent the position of Movemaker. This article is not intended to provide: (i) investment advice or investment recommendations; (ii) an offer or solicitation to buy, sell, or hold digital assets; or (iii) financial, accounting, legal or tax advice. Holding digital assets, including stablecoins and NFTs, is extremely risky, volatile in price, and can even become worthless. You should carefully consider whether trading or holding Digital Assets is suitable for you in light of your own financial situation. Please consult your legal, tax or investment advisor if you have questions about your specific circumstances. The information provided in this article, including market data and statistics, if any, is for general information purposes only. Reasonable care has been taken in the preparation of these figures and graphs, but no liability is accepted for any factual errors or omissions expressed in them.
