Author: Fairy, ChainCatcher
Editor: TB, ChainCatcher
Last night was not a peaceful Christmas Eve. The hottest "high-volume pool" targets on Binance Alpha, ZKJ and KOGE, experienced a coordinated flash crash.
Within two hours, ZKJ plummeted from $2 to $0.29, a staggering 85% drop. KOGE crashed from $57 to $24, even briefly touching $8. Market capitalization vanished, and liquidity evaporated instantly.
The simultaneous collapse of ZKJ and KOGE was like a heavy punch to the soft underbelly of the Alpha mode. Was this an isolated project's unexpected loss of control, or is the entire incentive mechanism approaching a critical point?
Collapse of a "Pool Brushing" Paradigm
In the Binance Alpha game, users generally prefer to use tokens with "low wear" for volume, and ZKJ and KOGE are representatives of volume brushing tools, accounting for over 87% of Alpha token trading volume, especially ZKJ, which has been used by users for scoring for over a month.
However, ZKJ and KOGE have highly concentrated chips, with KOGE's top ten addresses holding 93% and ZKJ nearly 80%. Behind the volume brushing, there has always been a hidden liquidity risk that could be triggered by "controllers" at any time.
Image source: gmgn
16 days ago, ZKJ and KOGE jointly established a ZKJ/KOGE liquidity pool on PancakeSwap, accumulating over $30 million worth of tokens. The community once widely spread that ZKJ-KOGE had extremely low wear, attracting many volume brushers, which laid the groundwork for the flash crash.
According to on-chain analyst Ai Yi, three main addresses caused the ZKJ and KOGE crashes last night through "large-scale liquidity withdrawal + continuous selling".
These three addresses had clear division of labor, withdrawing millions of dollars in bilateral liquidity and then "relay-style suppressing" by exchanging KOGE for ZKJ and concentrating ZKJ sales, gradually triggering a cliff-like token price drop. KOGE first sharply declined, and its crash further catalyzed ZKJ's drop, completing the harvesting of both tokens' LP and token holders.
Ai Yi pointed out that besides these three main players, multiple "supporting addresses" worth hundreds of thousands of dollars also participated simultaneously.
Image source: Ai Yi
Why Did Large Holders Suddenly Withdraw Liquidity?
In fact, just the day before, KOGE token project 48 Club issued a "meaningful" announcement: "$KOGE has been fully released from the first day, with no lock-up. 48Club has never promised not to sell treasury holdings. Just like Binance never said it won't sell $BNB. Do your own research, risk at your own discretion."
This announcement immediately triggered market alertness, causing KOGE and ZKJ to slightly drop that day, with many community users seeing it as a "dumping warning". Although crypto KOL BroLeon later revealed that the project denied involvement in dumping, this "risk warning" Official Twitter likely became a key catalyst for large holders' liquidity withdrawal. Once market participants sense potential token selling or liquidity withdrawal, they quickly withdraw from the pool to avoid potential sudden drops.
Simultaneously, ZKJ faces a critical point: on June 19, approximately 15.53 million tokens will be unlocked, representing 5.04% of current circulation and a market value of around $30.3 million. Coupled with the recent significant decline in overall Alpha activity trading volume and reduced profit potential, liquidity providers would naturally reassess the cost-effectiveness of continued participation.
Additionally, the market has other speculations. Crypto KOL danny suggests that due to the initially extremely high APY of the KOGE-ZKJ pool, which attracted many users to join, quickly accumulating tens of millions in liquidity, large holders quietly established short positions for ZKJ on centralized exchanges. When the predetermined "triggering window" arrived, they began exchanging KOGE for ZKJ and quickly selling ZKJ for USDT, achieving token price suppression while earning contract profits, completing a "spot + contract" double harvest.
Image: Binance Alpha Token Trading Volume, Dune
How Long Can Alpha's Dividend Period Last?
Since Binance Alpha's point strategy was introduced, Binance Wallet's trading volume has surged, with market share breaking 90%, driving overall wallet trading volume to a hundredfold increase, and BNB Chain's on-chain trading volume rising accordingly.
On the surface, this is a successful case of platform user activity and on-chain ecosystem "overall boost". But when we peel back the data prosperity, it's not hard to discover this is a "false activity" bubble driven by point incentives and user volume brushing.
The sudden crash of ZKJ and KOGE is like a needle, bursting this bubble ecosystem. These two projects exposed a series of structural issues in Alpha: inconsistent token quality, high degree of control in some projects, and fragile liquidity.
Meanwhile, Alpha's point threshold continues to rise, breaking the initial "universal participation" fantasy. Now, the Alpha score line has increased to 247 points, approaching the break-even point for many retail investors. Crypto KOL Bing Frog pointed out that whether through point consumption mechanisms, fee adjustments, or integrating points into financial products, Alpha's "dividend period" has essentially ended. He stated: "In fact, this was never a fair competition. Any incentive mechanism built on internal competition is not about 'encouraging participation', but 'accelerating elimination'."
After the incident, Binance Alpha issued new rules, announcing that trading pairs between Alpha tokens will no longer count towards point calculations. However, looking at its rule evolution, Alpha seems to have been constantly "patching"—whenever issues emerge or controversies arise, it begins to make corrections.
However, perhaps we should ask from the beginning: What kind of incentive mechanism can truly serve the long-term interests of ordinary users? And what truly benefits the industry?
