Original Article Title: "In the Fractured Narrative Market, Binance Alpha's Synthetic Bull Run Finds Itself in a State of Ambivalence"

Original Article Author: Kevin, the Researcher at Movemaker

The Failure of Binance Alpha 1.0 and the Strategic Shift to Alpha 2.0

Due to a setback in the Binance wallet, Binance Alpha 1.0, serving as a liquidity bridge on the Binance Chain, was declared a failure. The pre-upgrade trading volume and user numbers plummeted to historic lows, with the daily trading volume of all tokens on Alpha totaling less than $10 million, daily transactions falling below 10,000, a stark contrast to the volume within the Binance trading platform. Instead of attracting on-chain users and corresponding liquidity to the trading platform, it had a negative impact on marketing efforts.

Therefore, at the end of March, Binance Alpha upgraded to Binance Alpha 2.0. Alpha was directly integrated into the Binance app, in contrast to 1.0, which could only be accessed through the Binance Web3 wallet. After the upgrade, users could purchase Alpha tokens with funds from the trading platform.

The inability to expand the wallet user base meant that Binance's strategy to compete for on-chain liquidity through Binance Alpha was ineffective, failing to attract liquidity while enhancing BSC's visibility. In other words, when Binance's on-chain growth could not naturally form a positive feedback loop, it had to reverse course by injecting traffic from the trading platform into Alpha, allowing Binance Alpha to achieve quantitative transformation, attract market attention, leverage a significant wealth effect, and become a frontline hub for Binance to attract on-chain liquidity, amplifying BSC's presence.

Waiting Period Without Consensus Confirmation: The Trough Before the Starting Gun of Alpha 2.0

This scenario is plausible, but for it to work, there needs to be a major precondition: providing a consensus for funds on the sidelines in a market with insufficient liquidity, acting as a catalyst to ignite market attention towards Binance Alpha 2.0. Without such a trigger, even with the upgrade to Alpha 2.0, data from the end of March to mid-April shows that efforts to deepen order books and promote the wealth effect could only briefly spark less than a week of market discussion heat, quickly returning to silence, falling back into the trough in early April.

Of course, this is not a failure of the Alpha 2.0 upgrade or a strategic policy mistake. In order to expand Alpha's scale, that is, Alpha's total transaction volume, apart from introducing liquidity in the DEX, the only option is to inject liquidity into Binance's own trading platform. The reason why version 1.0 chose the former solution is twofold. On the one hand, this is a ready-made strategy for second-tier trading platforms, and the market can quickly accept the transfer of Binance. On the other hand, Binance, as a leading trading platform, has absolute confidence, and the starting point of second-tier trading platforms is different. The latter sees the introduction of on-chain liquidity as the basis or foundation, so they can react quickly in terms of user experience or marketing response. In contrast, Binance's introduction of on-chain liquidity is more of a precautionary measure rather than an urgent matter. Therefore, the poor experience of the Binance Wallet and the sharp downturn in the Q1 market trend made it difficult for Binance to adjust quickly, leading to the collapse of Alpha 1.0.

Therefore, it can be said that reverse liquidity injection from the trading platform is Binance's final move and the most powerful upgrade. However, looking at the Alpha 2.0 data from 3.20 to 4.20, it can still be described as bleak. Why is that? Because even though the pipeline or path for injecting liquidity has been successfully established, the influx of liquidity still needs a signal, a gunshot. In the current atmosphere of despair where all narratives in the crypto market are declared shattered, only Bitcoin can play the role of this starting gun.

Bitcoin Signal Launched, Alpha 2.0 Trading Ecosystem Sees a Turning Point

And Bitcoin's price has become closely linked to the macroeconomic trends of the United States. For Bitcoin to embark on a new trend, it also needs support from macro market confidence. In the previous article, Bitcoin lingered around $85,000 for a week, waiting for macroeconomic confidence confirmation. Therefore, when the market was deeply immersed in the fear brought by the double blow of tariffs and recession, and because of the favorable news of the 90-day tariff truce, strong performance of the U.S. economy, and progress in U.S.-China negotiations, a brief market easing cycle appeared. In the coming days, which are neither long nor short, the bearish headwinds are firmly contained, which is full confirmation of confidence for Bitcoin. The market started on the 21st of April, and from Ethereum's strong three-day breakout, it can be seen that large funds are rushing in, entering the second phase of the market.

Therefore, when Bitcoin sends a signal, thirsty liquidity will first flow into high-risk assets, and the pipeline created by Alpha 2.0 will start to show its effect.

Incentive Points and Token Bubble: The Dual-Drive Strategy of Alpha2.0

Looking back at Alpha2.0 itself, its main role, besides attracting face liquidity as mentioned earlier, is also to serve as a Binance reservoir function. To weaken Binance's listing effect, the liquidity at the time of listing needs to be pre-diverted while ensuring that this liquidity is indeed within Binance and not overflowing to other exchanges. Therefore, when Bitcoin sends a signal and the short-term consensus in the market is strong, the direction for Alpha2.0 is very simple. It is about how whales hype the narrative in each cycle, which is how to create a bubble in the reservoir. Alpha2.0 chooses two ways to create a bubble:

Bottom-Up Incentive Promotions

· Alpha Points are a direct incentive to increase trading volume and liquidity, obtained by adding Balance Points and Transaction Volume Points within a 15-day period.

· Balance Points: Users holding different asset balances in exchanges and wallets receive daily points based on their balance, for example: $10,000 to <$100,000 = 3 points/day.

· Transaction Volume Points: Points are awarded based on the buying volume of Alpha tokens, for example: 1 point for every $2 purchased, and an additional point for each doubling of the purchase amount (e.g., $2 = 1 point, $4 = 2 points, $8 = 3 points, and so on).

· The level of Alpha Points is related to eligibility for airdrop events. For example, owning 142 Alpha Points can qualify for airdropping 50 ZKJ tokens.

· The difficulty of earning points increases as both the balance and transaction volume increase. The goal of Alpha2.0 is to provide incentives to 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 Alpha token buying transactions, ultimately driving market depth and activity. The double transaction volume points event launched on April 30 spurred the enthusiasm of a longer tail of users, where placing orders or directly buying BSC tokens will earn double points. By offering double points, Binance allows a larger range of users to qualify for airdrops, creating market enthusiasm and activity, providing the main force behind the Alpha token with more comprehensive pumping power.

· Looking at the trading volume of Alpha2.0 since April 20, Binance has effectively increased the asset holdings and trading volume within the platform, further enhancing the overall market activity and depth. As more users actively participate, the market liquidity of the Alpha token will be significantly enhanced. This continuous operation of a virtuous cycle will be a key factor for Binance to stand out in future market competition.

Liquidity Convergence Forming Headwinds Effect

Observing the Alpha 2.0 transition, the daily trading volume trend of the Alpha token, it can be seen that the rule change itself did not provide sufficient stimulus or generate interest from the on-chain funds. However, Bitcoin's signal is strong consensus. Observing the tokens that primarily contribute to the Alpha token's daily trading volume: $KMNO, $B2, $ZKJ.

$KMNO: DeFi protocol Kamino Finance on Solana, entered Binance Alpha on February 13 and began a unilateral downtrend, with trading volume starting to increase during the week of April 28, growing 40 times compared to two weeks ago, but the price fluctuated only between 0.065 and 0.085. Until May 6, when it was listed on Binance spot, the trading volume returned to normal levels.

$B2: L2 protocol in the Bitcoin ecosystem, issued tokens on April 30 and entered Binance Alpha. Its market cap only reached $30 million at its peak, currently at $27 million. The trading volume gradually increased after the token issuance, showing a clear pattern where trading volume expands during the daytime in the Asian time zone and weakens at night.

$ZKJ: ZK protocol Polyhedra Network, issued tokens on May 6 and entered Binance Alpha. Market cap is $130 million. The fluctuation in trading volume is similar to $B2, with trading volume expanding during the daytime in the Asian time zone and weakening at night.

Asian Daytime Driving Model: A Realistic Portrait of Alpha Liquidity

From the hourly trading volume chart, it is clear that the main trading volume-contributing tokens of Alpha 2.0 exhibit strong intraday cyclical volatility characteristics. This regular trading behavior was repeated from May 8th to May 11th, manifesting a significant increase in trading volume daily from midnight to noon UTC time (roughly from 8:00 to 20:00 Beijing time), while the trading volume significantly fell back or even languished from afternoon to late night UTC time (evening to early morning Beijing time). This rhythm aligns perfectly with the Asia trading time zone's schedule, indicating that the Alpha 2.0 trading ecosystem is highly dependent on liquidity support from the Asia market at this stage. Especially during the active Asian daytime period, the total hourly trading volume has repeatedly surpassed $25 million, even approaching $30 million at times, showing highly concentrated market-making and trading operations.

In addition, looking at the transaction volume distribution structure of each token, ZKJ (in yellow) is the absolute main force of the transaction volume, occupying a dominant position for the vast majority of the time period. Its transaction volume changes synchronously with the overall market rhythm, further strengthening the inference of "systematic market-making." In addition to ZKJ, tokens such as B2 and SKYAI also showed significant activity during peak periods, forming a "market-making matrix" in the Alpha 2.0 ecosystem. The transaction volume of these tokens fluctuates highly consistently, unlike natural user-initiated transactions, resembling batch orders and matching operations controlled by automated market-making systems or robots. Initiation at a fixed time each day and withdrawal at a fixed time are highly likely to originate from a standardized, automated trading program, possibly indicating a team conducting concentrated operations during Asian daytime and significantly reducing activity or closing strategies at night.

Overall, the current trading activity of Alpha 2.0 exhibits a typical "Asian daytime market-driven model," where its market depth and liquidity largely depend on the market-making behavior of a few leading tokens and global natural user transactions. Although this pattern can support transaction volume and activity through centralized market-making behavior in the short term, it also exposes the platform ecosystem's reliance on a single time zone and limited market-making entities. Once these market-making accounts cease operations, the platform's transaction volume may experience a cliff-like drop. To build a more sustainable trading ecosystem in the future, Alpha 2.0 needs to introduce more time zones and natural trading behaviors from more participants to break free from the current overly singular rhythm and evident market-making traces.

From the graph below, it can be observed that after April 20, the platform's trading activity entered a rapid growth phase, with the number of transactions quickly rising from the early tens of thousands to nearly a million per day on average. However, starting around April 28, although the transaction volume remained high, the daily number of transactions tended to stabilize, and even showed a slight decline in the past few days. This deviation phenomenon of "slowing transaction growth while transaction volume continues to rise," combined with the previous "hourly transaction volume distribution chart," points to a very clear structural change: the trading behavior of the Alpha 2.0 platform is gradually shifting from a high-frequency, low-value "retail wash trading" mode to a low-frequency, high-value "market-making-driven" mode.

The primary driving force behind this change is likely the strengthening of the market-making strategies of leading tokens. The tokens shown in the previous graph, such as ZKJ and B2, experienced a significant increase in trading volume during specific periods (especially during Asian daytime), indicating that such tokens have become the liquidity hub of the platform. The trading of these tokens is usually conducted by a few market makers or automated trading robots, whose strategies may no longer focus on high-frequency matching transactions but rather place orders, match, and arbitrage with larger transaction amounts. Therefore, even with limited growth in the number of transactions, the transaction volume per transaction may significantly increase, thereby driving a continuous rise in overall transaction volume. This structural "quality substitution" phenomenon, combined with the double point event's incentive for user orders, indicates that Alpha 2.0 has entered a new stage characterized by liquidity depth optimization and concentrated trading of core tokens.

Furthermore, this structural change also reflects the development bottleneck and adjustment strategy facing the platform. On the one hand, in the platform's early stages, transaction volume was mainly driven by a large number of small-tail tokens and retail participation, but this growth pattern has gradually weakened in terms of marginal effects. On the other hand, the platform has been attempting to maintain or even increase overall transaction volume by introducing a stable market-making mechanism and a top-tier token ecosystem to attract more liquidity and user attention. If this trend continues, Alpha 2.0 will face a strategic choice in two directions: further expanding market maker participation to encourage the formation of more "high-value, low-frequency" core trading pools, or optimizing user experience and fee structure to reinvigorate retail intraday activity and achieve a new peak in "high-frequency, high-value" trading.

Interchain Switching and Market-Making Structure: Alpha 2.0's Liquidity Migration Logic

As seen in the diagram below, the daily trading volume of the Alpha 2.0 token has undergone significant structural migration between different blockchains, showing clear phase-dominant chain transitions. Starting in mid-March, after the rule change of Alpha 2.0, the BNB chain (orange) became the absolute dominant force, accounting for nearly 100% of the transaction volume. However, at the end of March and the beginning of April, Solana (green) gradually emerged, starting to compete with the BNB chain for dominance and completing a "comeback" against BNB in mid-April, stabilizing its share of daily transaction volume at 60%-80% for about two weeks, becoming the main liquidity venue for Alpha 2.0. This period marked a market lull, which I believe can be seen as the true traffic level of Alpha 2.0.

Then, during the late April to early May period, the BNB chain reclaimed its dominant position, with its share rising back to nearly 60%-70%, signaling a round of interchain liquidity inflow.

From this trend, several key changes can be observed: first, the liquidity of Alpha 2.0 is highly migratory, and it can be seen that BSC's activity is highly dependent on market makers and bots; second, Solana briefly became the preferred choice for accommodating Alpha's transaction demand due to its high-speed, low-fee on-chain performance, but this lead is not stable. Whenever market sentiment reverses, a massive volume of transactions can be re-injected into BSC.

Overall, the pace of Alpha 2.0's transaction volume migration between chains reflects a typical "liquidity arbitrage + incentive migration" driving model, rather than being entrenched in long-term cultivation on a particular chain. This also suggests that the future traffic construction of the Alpha platform will continue to be constrained by external variables such as interchain competition, cross-chain deployment costs, incentive strategies, and does not rule out the possibility of the next round of new main chain switching.

If we only compare the trading volume and transaction count of the Alpha 2.0 token on BSC and SOL, we can observe that overall, Binance Alpha 2.0 saw explosive growth after mid-April, and this growth trend continued until mid-May.

In terms of transaction count, Solana's performance was particularly outstanding in the early stages (especially in late April), with its transaction volume significantly higher than BSC, indicating that at this stage, Alpha 2.0's primary liquidity was still on Solana. However, by early May, BSC's transaction count quickly caught up and even surpassed Solana, showing that as time progressed, Alpha 2.0's activity on BSC rapidly increased, possibly related to changes in liquidity provision strategies. While Solana still maintained a stable transaction volume, its growth rate appeared to slow slightly.

Opportunities and Risks During the Sentiment Repair Period: Alpha 2.0's Next Challenge

During the current downturn and recovery period following the tariff shock, the crypto market has fallen into a stalemate of lacking a breakthrough narrative: without a new mainstream story, it is impossible to generate market momentum, and the typical leading effect seen in mainstream narratives is difficult to manifest, making it challenging to create a true wealth effect. Despite an ample supply of USDT in the market, overall liquidity remains relatively tight when compared horizontally. At this moment, with no other narratives able to take on the responsibility of driving the overall market, only Ethereum can play the dual role of "narrative core" and "liquidity reservoir" in the fleeting trend. Although it is difficult to say with certainty whether the network upgrade expectations or the actual implementation of ETF staking have brought buying pressure to Ethereum, from another perspective, the current market has deteriorated to the point where Ethereum needs to become the primary carrier of market sentiment and fund flows, the bull of the past bull runs, a role often undertaken by leading projects.

When Ethereum or some meme coins or other hot assets experience a short-term explosive price increase, strong project teams and top-tier exchanges (such as Binance) must promptly follow this wave of enthusiasm without hesitation, as they cannot afford to stand aside or miss the opportunity due to indecision. Because of the uncertainty surrounding whether this round of small-cycle bull market catalyzed by sentiment repair can further evolve into a larger-scale bull market. If a strong project team or trading platform fails to respond promptly to price action or trading volume, they can easily be judged by the market as "lack of energy" and subsequently abandoned. Even if the current small bull market ultimately fails to upgrade, there are still many potential benefits (such as liquidity recovery) to trigger a market rally in the future.

In this context, market makers and trading platforms should take full advantage of each upward cycle to foster market confidence and solidify wealth consensus: by continuously injecting liquidity before market pullbacks and actively generating trading volume, a positive image of "well-funded and market-savvy" can be established in the minds of investors. On the contrary, choosing to "stand still" at a critical juncture can easily be perceived as lacking sustained driving force, making it difficult to muster sufficient market momentum when a larger-scale market trend emerges in the future.

For Alpha 2.0, the current period of emotional recovery presents both opportunities and hidden concerns. Looking at the real on-chain activity, the activity on BSC is almost negligible—clearly not the ideal outcome Binance and its ecosystem would like to see. The current vibrancy and buzz of Alpha 2.0 rely more on the centralized manipulation of market makers and projects, rather than the spontaneous participation of global retail investors. This appearance of "artificially stacked" trading volume is highly likely to experience a cliff-like decline once external stimuli are lost. How many more mini-bull or mega-bull trends will the future need to go through to gradually cultivate a truly spontaneous, positive liquidity ecosystem? This is a key variable that we need to focus on when observing the development of Alpha 2.0 in the future.

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