On April 24, Binance announced that it would delist four tokens, including Alpaca Finance ($ALPACA), on May 2 and delist the perpetual contract trading of these trading pairs at 00:00 on May 1, 2025, Beijing time. A week has passed, and on the final day of the perpetual contract trading delisting, ALPACA surged on the liquidation heat map. In the past 24 hours, a total of $52.21 million evaporated in ALPACA's contract trading, which is more than the total sum of the token's contract liquidation in the past two years.

Historically, when a token is listed on Binance, many traders would buy the news immediately ("Buy the News"). As the Binance listing effect gradually diminished, traders found another path, which is to short the tokens that Binance is about to delist ("Sell the News"). This situation often has a very high success rate until traders encountered this particular Alpaca.

The Long and Short Journey of ALPACA

Every thrilling whale game requires careful preparation. Before Binance's official announcement, $ALPACA was preliminarily included in the second batch of "Voting for Delisting" on April 10, ranking 7th, and its price plummeted. However, in the 5 days before Binance's official announcement, from April 19 to April 23, trading suddenly surged.

The start of the story should be traced back to the beginning of the second batch of "Voting for Delisting" on Binance, where ALPACA entered the list of projects to be delisted, ranking 7th out of 17 projects. After the completion of the delisting vote count by Binance, $ALPACA was included in the projects to be delisted. The market did not react significantly, and the price did not fluctuate significantly, but the trading volume expanded abnormally, indicating possible "market-making funds" entering the scene.

On April 24, Binance officially announced the delisting of the $ALPACA spot trading pair on May 2 and the settlement of contract trading on April 30. Following the news, the spot price of $ALPACA dropped from $0.0329 to $0.029, with a market cap of only about $5 million. However, what followed were two "roller-coaster" rides. Within 1 hour, the price rose from $0.029 to $0.0857, an increase of about 195%, then quickly fell back to $0.04 within 3 hours. The shorts were caught off guard, and the open interest (OI) rapidly increased, triggering the "long and short meat grinder" mode.

On April 25th, Alpaca Finance officially announced that the trading volume in the past 24 hours exceeded 1 billion tokens. The liquidity provider had previously suggested a "minting to stabilize liquidity" and planned to return to the treasury after a decrease in volume. However, as public opinion began to ferment, opposition voices filled the community. Alpaca Finance deleted the previous tweet and issued a new one at 9 p.m., announcing the cancellation of the minting due to community opposition.

On April 26th, Binance modified the contract funding rate rule, shortening the maximum rate cap settlement period to hourly, with a maximum of ±2%. Some high leverage accounts continued to hold short positions at extremely high rates and were liquidated. Millions of dollars disappeared within hours, with $13 million in shorts vanishing on a token with a market cap of less than $30 million.

This marked the beginning of a full-scale short squeeze. The price surged nearly 12 times from the low of $0.029 to $0.3477 within 3 days. The open interest in the contract significantly increased, especially with a notable rise in short positions. It resembled a retail version of the GME Wall Street battle, except this time the opponents of retail investors could continuously issue more chips.

From April 26th to April 29th, these days were relatively calm, with prices fluctuating around $0.2 to $0.34. On April 29th, Binance once again announced an increase in the rate limit to ±4%. Theoretically, such a high rate would severely impact short positions. If a continuous rate of -4% is maintained, the bears will incur a 96% "sinking cost" of their principal value if they hold short positions for 24 hours. However, the price miraculously plummeted from $0.27 to $0.067.

On April 30th, with the contract delisting and liquidation deadline in the final 24 hours, the price continued to experience intense volatility. ALPACA's attention also peaked, with its highest price reaching $1.2. From a week before the delisting announcement to the eve of the contract delisting, ALPACA's price increased 40 times, creating an independent market for the token delisted by Binance. The total liquidation across the network also reached $50 million, with $42 million in "bearish fuel" underneath the price surge.

Community Discussion

Can the Shell Buying Teacher Make a Turnaround?

After the first surge of ALPACA, Binance's co-founder Heyi responded to a netizen, "Can the shell buying teacher make a turnaround?" This also sparked endless speculation among community members.

KOL Tunbtc believes that Heyi's response to this matter was the starting point of ALPACA's surge. "The whale of the alpaca native coin, by relinquishing spot chips, operating rights, and distribution rights, pledged allegiance to Binance's deep-water core interest circle, allowing it to fully harvest market liquidity before delisting, slaughtering opposing positions." Through the triple path of fees, contract liquidation, and spot volatility, they converted user attention into profit.

He also called on Binance to thoroughly investigate this matter, clarify which market maker is manipulating the candlestick chart, and pointed out that ALPACA experienced an 18-fold surge within 24 hours with users liquidating tens of millions of dollars. Previously, GPS's 500% surge was promptly halted, and he expressed, "All of this is thought-provoking."

Founder of Beta Capital, Wenze, believes that bypassing the regular listing process, buying shells, rebranding, and restarting have crossed Binance's bottom line in maintaining listing credibility and brand compliance. Sometimes Binance has a high tolerance for market volatility, and the OM issuance only adjusted the collateral ratio, with many projects only allowed to trade on leverage. However, once a project like this "shell project" is discovered, it is easily labeled for observation and initiated for delisting through voting, ultimately leading to its delisting instead of using more gentle measures.

The Mastermind Behind the Scenes

Renowned KOLRui "YeruiZhang" likened the ALPACA incident to "crazy revenge on an ex" and shared a piece of insider information, claiming that the original manipulator of ALPACA was a team that controlled BSC MEV for a period of time and expressed dissatisfaction with Binance's current management for some reason. The comment section was filled with speculations that it was the whale of BSC, 48CLUB, and Ian from 48CLUB even personally appeared to observe the turn of events.

Concept of Delisting

With the recent heated discussion surrounding VOXEL's surge and the wealth effect and discussion level of ALPACA, more and more "delisting concepts" have emerged. These do not necessarily refer to tokens that have already been delisted but rather share some common characteristics of delisted tokens.

Famous KOL Chuanmo recently shared on Twitter his rationale for choosing tokens based on the "Delisting Concept" and listed several tokens that experienced varying degrees of price increases after his recommendation.

His strategy of selecting tokens based on the "delisting concept" involves arranging low-cap tokens from Bybit and Binance starting from the lowest market cap, with almost 100% price increases for the ones with the highest holding amount/circulating market cap. He buys the top three tokens each day according to this ranking with a fixed amount, and adjusts the list daily based on the holding/circulating ratio, removing tokens that no longer meet the criteria and continuously buying the new top three.

Many in the community have tested this strategy, and some have developed additional tools to assist. The visionary Disney "Dreamer" "discountifu" created a dashboard, and Vivek10 from "Tech Sleep" "vivekw_eth" built a monitoring and alert system that can directly push notifications to WeChat through a copied link, although its current deployment is local and not yet fully stable.

However, caution is advised when using tools created by community members for free. Despite having many enthusiastic contributors in the community, there are also many uncertainties in this dark forest.

In an increasingly intense market environment, retail investors not only need to contend with whales and other retail investors but also face many unstable factors. The recent incident with ALPACA serves as a warning, highlighting the need for us to make rational asset allocations amidst FOMO, whether through first-tier or second-tier listings on major exchanges or the "delisting concept," in order to protect our principal and reach the desired destination.

The mentioned tokens above do not constitute financial investment advice ("NFA").

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