In a market without a main storyline, Alpha, as Binances reservoir, has achieved initial success in competing for market

Original 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 Binance Wallet, Binance Alpha 1.0, which served as a bridge for Binance to connect on-chain liquidity, failed. The trading volume and number of users before the upgrade fell to a record low. The total daily trading volume of all tokens on Alpha was less than 10 million US dollars, and the number of daily transactions was less than 10,000 times, which was undoubtedly a huge gap compared with the volume of Binance Trao đổi. Not only did it fail to attract on-chain users and corresponding liquidity to the exchange, but it also had a negative impact on marketing.

Therefore, Binance Alpha was upgraded to Binance Alpha 2.0 at the end of March. Alpha was directly integrated into the Binance APP. Unlike 1.0, which could only be accessed through the Binance Web3 wallet, after the upgrade, users can use the funds in the exchange to purchase Alpha tokens.

Failure to expand the scale of wallet users means that Binances strategy of competing for on-chain liquidity through Binance Alpha as a bridge will not work, and it cannot attract liquidity while enhancing BSCs attention. In other words, when Binances growth on the chain cannot form a natural positive cycle, it can only do the opposite, by injecting the flow in the exchange back into Alpha, so that Binance Alpha can achieve quantitative changes to attract market attention, complete qualitative changes under sufficient wealth effects, and completely become Binances outpost for attracting on-chain liquidity, amplifying the presence of the BSC chain.

The waiting period without consensus confirmation: the low point of Alpha 2.0 before the “gunshot”

This idea is reasonable, but it needs a major premise to work, that is, in a market with insufficient liquidity, to provide a consensus for the waiting funds to end, so as to trigger the market attention of Binance Alpha 2.0. Without such a trigger, even if Alpha is upgraded to 2.0, from the data from the end of March to mid-April, whether it is the laying out of the depth of pending orders or the publicity of the wealth effect, it can only stimulate the market discussion heat within a short window of less than a week, and soon return to silence, and fall into a trough again in early April.

Of course, this is not a failure of the Alpha 2.0 upgrade or a strategic error, because in order to expand the scale of Alpha, that is, the total trading volume of Alpha, in addition to introducing liquidity from DEX, the only way is to inject liquidity from Binances own exchange. The reason why 1.0 chose the former solution is that, on the one hand, this is a ready-made strategy of second-tier exchanges, and the market can quickly accept Binances transfer; on the other hand, Binances absolute confidence as a leading exchange is different from the starting point of second-tier exchanges. The latter regards the introduction of on-chain liquidity as the foundation or foundation, so they can achieve agile response in user experience or marketing response, while Binances introduction of on-chain liquidity is more of a rainy day, not an urgent matter. Therefore, the poor experience of 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 Alpha 1.0.

Therefore, it can be said that reverse injection of liquidity from exchanges is Binances last resort and also the most powerful upgrade. However, judging from the Alpha 2.0 data from March 20 to April 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 requires a signal, a gunshot. In the current desperate atmosphere of the mật mã market where all narratives have been shattered, only Bitcoin can play the role of such a starting gun.

Bitcoin signal is launched, Alpha 2.0 trading ecosystem ushered in a turning point

The price of Bitcoin is closely linked to the macroeconomic trend of the United States. For Bitcoin to develop a new market, it also needs the support of macro market confidence. In the previous article, Bitcoin has been hovering around 85,000 for a week, waiting for macro confidence confirmation. Therefore, when the market is deeply trapped in the fear of the double punch of tariffs and recession, and stimulated by the 90-day tariff cooling-off period, the strong performance of the US economy, and the good news of progress in Sino-US negotiations, a short market easing cycle appears. At present, there is no need to consider the risk of further deterioration of tariffs, and the risk aversion caused by recession can also be ignored. In the next few dozen days, which is not long or short, the source of negative news is tightly contained, which is full confidence confirmation for Bitcoin. The market started on April 21. From the three-day strong breakthrough of Ethereum, we can see that big funds are rushing to run, and the market has entered the second stage.

Therefore, when Bitcoin sends a signal, the thirsty liquidity will be injected into high-risk assets first, and the pipeline created by Alpha 2.0 will begin to take effect.

Points incentives and token bubbles: Alpha 2.0’s dual-wheel drive strategy

Back to Alpha 2.0 itself, its main function is not only to attract liquidity from the market as mentioned above, but also to become a reservoir for Binance. 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, while ensuring that these liquidity are indeed in Binance, rather than spilling over to other exchanges. Therefore, when Bitcoin sends a signal and the market has a strong short-term consensus, the direction for Alpha 2.0 is very simple, that is, the way the dealer hypes the narrative in each cycle, that is, how to create bubbles in the reservoir. Alpha 2.0 chooses two ways to create bubbles:

• Bottom-up points promotion

Alpha points are a direct incentive to increase trading volume and liquidity, and are obtained by adding the balance points and trading volume points within 15 days.
Balance Points: Different balances of assets held in exchanges and wallets can earn different points every day, for example: $10,000 to Volume Points: Points are awarded for each purchase of Alpha tokens, for example: 1 point for every $2 purchased, and an additional point for every doubling of the purchase amount (e.g. $2 = 1 point, $4 = 2 points, $8 = 3 points, etc.)

The level of Alpha points is related to the eligibility for airdrop activities. For example, having 142 Alpha points can get an airdrop of 50 ZKJ tokens.
The difficulty of earning points increases with the increase of balance and trading volume. The purpose of Alpha 2.0 is to provide incentives for the widest range of users. Through a carefully designed incentive mechanism, users are encouraged to maintain a certain asset balance in exchanges and wallets and actively participate in the purchase of Alpha tokens, ultimately promoting the depth and activity of the market. The double trading volume points activity launched on April 30th mobilized the enthusiasm of longer-tail users. As long as you place an order or directly buy BSC tokens, you can get 2 times the points. Binance doubles the points to allow a wider range of users to obtain airdrop qualifications, create market heat and activity, and give the main force of Alpha tokens more sufficient motivation to pull the market.

Judging from the Alpha 2.0 trading volume since April 20, Binance has been able to effectively increase the asset holdings and trading volume on the platform, and further enhance the overall activity and depth of the market. As more and more users actively participate, the market liquidity of Alpha tokens will be significantly enhanced, and the continued operation of this virtuous cycle will be the key to Binances success in future market competition.

• Liquidity convergence that forms a leading effect

Observing the daily trading volume trend of Alpha tokens after the Alpha 2.0 switch, we can see that the rule change itself did not create enough stimulus, or in other words, arouse the interest of funds in the market. However, the signal of Bitcoin is a strong consensus, and the tokens that constitute the main sources of daily trading volume of Alpha tokens are: $KMNO, $ B2 , $ZKJ

$KMNO: Kamino Finance, a DeFi protocol on Solana, started to fall unilaterally after entering Binance Alpha on February 13. From April 28, the trading volume began to increase, increasing 40 times compared with two weeks ago, but the price only fluctuated between 0.065-0.085. It was not until May 6 that the spot was launched on Binance that the trading volume returned to normal levels.

$ B2 : Bitcoin ecosystem L2 protocol, issued on April 30 and entered Binance Alpha. The market value was only 30 million US dollars at its highest, and is currently 27 million. After the issuance of the coin, the transaction volume gradually increased, with obvious regularity. The transaction volume increased during the day in Asian time and weakened at night.

$ZKJ: ZK Protocol Polyhedra Network, issued on May 6 and entered Binance Alpha. Chợ value $130 million. The fluctuation of trading volume is similar to $ B2 , with trading volume increasing during the day in Asian time and decreasing at night.

Asian Daytime Drive Model: A True Portrait of Alpha Liquidity

It can be clearly seen from the hourly trading volume chart that the main trading volume contribution tokens of Alpha 2.0 have extremely strong intraday cyclical fluctuation characteristics. This regular trading behavior was repeated in the four days from May 8 to May 11, showing a significant increase in trading volume from early morning to noon UTC time (roughly 8:00 to 20:00 Beijing time), while trading volume dropped significantly or even sluggish from afternoon to late night UTC (late evening to early morning Beijing time). This rhythm is completely consistent with the work and rest 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 active daytime hours in Asia, the total trading volume per hour exceeded US$25 million many times, and even approached US$30 million at one point, showing a highly concentrated market making and trading operation.

In addition, from the perspective of the transaction volume distribution structure of each token, ZKJ (yellow) is the absolute main force of transaction volume, occupying the dominant position in most time periods. Its transaction volume changes synchronously with the overall market rhythm, which further strengthens the inference of systematic market making. In addition to ZKJ, tokens such as B 2 and SKYAI are also significantly active during peak hours, forming a market making matrix in the Alpha 2.0 ecosystem. The transaction volume changes of these tokens are highly consistent. They do not look like spontaneous transactions by natural users, but more like batch orders and matching operations controlled by automated market making systems or robots. Starting and withdrawing at fixed time periods every day is most likely due to a set of standardized and automated trading procedures. Behind it may be that the team conducts centralized operations during the day in Asian time, and the night closing strategy or significantly reduces activities.

Overall, the current trading activity of Alpha 2.0 shows a typical Asian daytime market-driven model, where the market depth and liquidity largely rely on the market-making behavior of a few leading tokens, and global natural user transactions. Although this model can support trading volume and activity through centralized market-making behavior in the short term, it also exposes the platform ecosystems dependence on a single time zone and limited market-making entities. Once these market-making accounts stop operating, the platforms trading volume 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 natural trading behaviors of more participants, so as to get rid of the current situation where the rhythm is too single and the market-making traces are obvious.

As can be seen from the figure below, since April 20, the trading activities of the platform have entered a rapid growth phase, with the number of transactions rapidly climbing from the early hundreds of thousands to nearly one million per day. However, starting around April 28, although the trading volume remained high, the number of daily transactions has stabilized, and even slightly declined in recent days. This divergence phenomenon of slowing growth in the number of transactions while the trading volume continues to rise 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, low-value retail investor order-brushing mode to the low-frequency, high-value market-making driven mode.

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 figure has increased dramatically during specific periods (especially during the Asian daytime), indicating that such tokens have become the liquidity center of the platform. The trading of such tokens is usually completed by a small number of market makers or automated trading robots. Their strategies may no longer pursue high-frequency matching transactions, but instead use larger transaction amounts to place orders, match orders, arbitrage and other operations. Therefore, even if the number of transactions increases only slightly, the volume of a single transaction may increase significantly, thereby driving the overall transaction volume to continue to rise. This structural quality substitution phenomenon, combined with the incentive for users to place orders in the double points event, shows that Alpha 2.0 has entered a new stage characterized by deep optimization of liquidity and centralized trading of core tokens.

Further inference, this structural change also reflects the development bottlenecks and adjustment strategies currently faced by the platform. On the one hand, the platform relied on a large number of tail tokens and retail investors to promote the number of transactions in the initial stage, but the marginal effect of this growth model gradually weakened; on the other hand, the platform tried to maintain or even increase the overall trading volume by introducing a stable market-making mechanism and a head token ecosystem, thereby attracting more liquidity and user attention. If this trend continues, Alpha 2.0 will face two strategic choices: one is to further expand the participation of market makers and hướng dẫn the formation of more high-value, low-frequency main trading pools; the other 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, high-value transactions.

Inter-chain switching and market-making structure: Alpha 2.0’s liquidity migration logic

As can be seen from the figure below, the daily transaction volume of Alpha 2.0 tokens has undergone significant structural migration between different blockchains, showing obvious staged changes in the dominant chain. Since mid-March, that is, after the Alpha 2.0 rule change, the BNB chain (orange) has been the absolute dominant force, accounting for nearly 100% of the transaction volume. But 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. In the following two weeks, it steadily occupied more than 60%-80% of the daily transaction volume share, becoming the main liquidity field of Alpha 2.0. This period is a flat period in the market. I personally think it can be regarded as the real traffic level of Alpha 2.0.

Then, from late April to early May, the BNB chain regained its dominant position, with its share rising to nearly 60%-70%, marking a round of inter-chain liquidity reflux.

Several key changes can be interpreted from this trend: First, the liquidity of Alpha 2.0 is highly portable, and it can also be seen that the activity of BSC is highly dependent on market makers and robots; second, Solana once became the first choice for carrying Alpha transaction needs with its high-speed and low-fee on-chain performance, but this lead is not stable. As long as market sentiment reverses, huge trading volume can be invested on BSC at any time.

Overall, the migration rhythm of Alpha 2.0s current transaction volume between chains reflects a typical liquidity arbitrage + incentive migration driving model, rather than long-term deep cultivation in a certain chain. This also indicates that the future traffic construction of the Alpha platform will still be subject to external variables such as inter-chain competition, cross-chain deployment costs, and incentive strategies, and it is not ruled out that there will be a new round of main chain switching.

If we only compare the changes in the trading volume and number of transactions of Alpha 2.0 tokens on BSC and SOL, we can find that overall, Binance Alpha 2.0 has experienced explosive growth since mid-April, and this growth trend continued until mid-May.

In terms of transaction times, Solana performed particularly well in the early stage (especially in mid-to-late April), with a significantly higher number of transactions than BSC, indicating that at this stage, the main liquidity of Alpha 2.0 was still on Solana. However, in early May, the number of transactions on BSC quickly caught up with or even surpassed Solana, which shows that over time, the activity of Alpha 2.0 on BSC has increased rapidly, which may be related to the adjustment of market-making strategies. Although Solana still maintains a stable transaction volume, the growth rate has slowed down slightly.

Opportunities and concerns during the emotional recovery 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 leading effect common in the main story is difficult to show, and naturally it is difficult to produce a real wealth effect. Although USDT is in sufficient supply in the market, in horizontal comparison, the overall liquidity is still tight. At this time, no other narrative can take on the responsibility of driving the overall situation. Only Ethereum can play the dual role of narrative core and liquidity reservoir in the fleeting wave of the wind. Although it is difficult to firmly say that it is the expectation of network upgrades and the actual implementation of ETF pledges that bring buying to Ethereum, but from another perspective, the current market is so bad that Ethereum needs to become the main carrier of market sentiment and capital flow. In the past, the bulls of the bulls, this role is often undertaken by the leading projects.

When Ethereum or some Memecoin or other hot assets experience a short-term explosive increase, the strong project owners and top exchanges (such as Binance) must follow this wave of heat without hesitation, and must not stay out of it or miss the opportunity by waiting and watching. Because there is still uncertainty as to whether this round of small-cycle bull market catalyzed by sentiment repair can further evolve into a larger-scale bull market. Once the strong project fails to respond in time in terms of price K-line or exchange trading volume, it is easy to be judged as lack of energy by the market and then abandoned. Even if the current small bull market ultimately fails to successfully upgrade, there are still a lot of potential benefits (such as liquidity recovery) to start the market in the future. In this context, strong dealers and exchanges should use every 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 pulls back, they can establish a positive image of sufficient funds and keen market sense in the minds of investors. On the contrary, once they choose to stand still at a key node, it is very easy to be regarded as lacking continuous driving force, and it will be difficult to gather enough market synergy when a larger-level market comes in the future.

For Alpha 2.0, the current sentiment repair period has brought both opportunities and concerns. Judging from the real on-chain traffic, the activity on BSC is almost negligible – this is obviously not the ideal result that Binance and its ecosystem expect to see. The current bustle and bustle of Alpha 2.0 relies more on the centralized operation of market makers and project parties, rather than the spontaneous participation of global retail investors. This artificially stacked apparent trading volume is very likely to fall off a cliff once it loses external stimulation. How many times will it take for the baptism of small or large bull markets in the future to gradually cultivate a truly spontaneous and positive liquidity ecology? This is exactly the core variable that we need to focus on when observing 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 Chinese ecosystem. As the official representative of Aptos in the Chinese region, Movemaker is committed to building a diverse, open and prosperous Aptos ecosystem by connecting developers, users, capital and many ecological partners.

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This article/blog is for informational purposes only and represents the personal opinions of the author and does not necessarily 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 NFT, is extremely risky and may fluctuate in price and become worthless. You should carefully consider whether trading or holding digital assets is appropriate for you based on your financial situation. If you have questions about your specific situation, please consult your legal, tax or investment advisor. The information provided in this article (including market data and statistical information, if any) is for general information only. Reasonable care has been taken in the preparation of these data and charts, but no responsibility is assumed for any factual errors or omissions expressed therein.

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