Binance Alpha Program Intense Internal Competition: Users Frantically Boosting Scores, Are Meme Projects Also Emerging as Winners?

Original Article Title: "Intensified FOMO Within Binance Alpha, Reality Not So Rosy"

Original Article Author: Frank, PANews

The points game within Binance Alpha is pushing "FOMO" to new heights at an unprecedented pace. As the point threshold once surpassed the 200-point mark and airdrop rewards plummeted to around $25, the diminishing user ROI sparked widespread community discussion.

Beneath this seemingly winner-takes-all feast, a viewpoint suggests that its immense traffic is "spilling over" to other ecosystems like Sui and Solana, injecting vitality into them. However, what is the true situation of this spillover effect? How will this "farming" frenzy ignited by Binance Alpha ultimately impact the industry?

The Reality of Traffic "Spillover": Observing Sui's Alpha Effect

The mechanics of the Binance Alpha points game have been detailed in previous sections and will not be reiterated here. However, overall, with more and more users participating, the end result is that each airdrop's earnings have a clear cap, and the points threshold continues to rise. In this scenario, users have to further compress costs in order to retain profit margins.

Lately, Binance Alpha has begun to list tokens from the Sui ecosystem. Subsequently, multiple Alpha projects in the Sui ecosystem were announced. The addition of the Sui ecosystem happened to provide new cost advantages for users engaging in trading volume mining. On May 14, @lianyanshe and other KOLs pointed out that projects in the Sui ecosystem, such as NAVX, have lower Gas fees when engaging in trading volume mining, are less susceptible to sandwich bot attacks, and overall experience less wear and tear. Therefore, several projects in the Sui ecosystem are set to become the "new kings of volume farming" within Binance Alpha.

If a majority of users choose this approach, it can indeed bring a significant amount of trading volume and token popularity to the Sui ecosystem. However, in reality, a similar effect does not seem to have emerged. According to PANews' investigation, the trading volume of tokens in the Sui ecosystem within Alpha is not significant, with the highest NAVX having a 24-hour trading volume of only $3.34 million, while other tokens like HIPPO, BLUE, SCA have trading volumes ranging from tens of thousands to hundreds of thousands of dollars. In contrast, projects on the Solana chain generally have trading volumes of over $10 million, and the top projects on BSC have trading volumes exceeding $200 million. However, for NAVX, being listed on Binance Alpha did indeed boost its trading volume. On May 13, the trading volume in NAVX's main pool reached $1.6 million, compared to just a few thousand dollars the day before.

During the actual transaction process, it can be observed that in the Binance Wallet's official cross-chain bridge, the exchange between Sui ecosystem and BSC chain assets has not been established. Users cannot directly exchange assets like BNB for Sui's USDC. If users want to avoid this friction, they will have to bear the friction of using other cross-chain bridges.

Solana Top MEME Unexpectedly Receives Inflow of Funds

Solana is one of the ecosystems with the most projects listed on Binance Alpha besides BSC. Since May, Solana's overall DEX trading volume has indeed seen a significant increase. On May 4th, Solana's DEX trading volume was 22 billion USD, and by May 15th, this data had risen to 45.9 billion USD, more than doubling. Several top tokens listed on Binance Alpha, such as MOODENG and jellyjelly, have recently experienced a significant increase in trading volume and significant price surges. MOODENG saw a 140% price increase from its listing to May 14th, and the average price increase of the 6 tokens listed on Binance Alpha from the Solana ecosystem in May reached 12.32%, showing one of the few ecosystems among several public chains with positive performance.

In addition to the Sui and Solana ecosystems, the ecosystem that may have benefited the most from this spill-over effect recently is Sonic ecosystem, as a new brand of Fantom. The most urgent need for Sonic right now is exposure and influx of funds. Although only 3 Sonic ecosystem projects have been listed on Binance Alpha so far, in terms of price trends, the average price increase of the two tokens listed in May reached 65.93% (data up to May 14th), ranking the highest among all ecosystems. However, due to the relatively small number of tokens listed, this does not necessarily mean that Sonic ecosystem tokens have higher potential.

However, on May 1st, when Binance Alpha announced the listing of two Sonic ecosystem projects, Sonic ecosystem's DEX trading volume did experience a significant increase. It surged from over 734 million USD on the previous day to 1.94 billion USD.

Project Myth: Peak Upon Listing or Value Discovery?

Aside from the ecosystem perspective, for project teams, does the price surge after listing on Binance Alpha represent a skyrocketing opportunity? From a data perspective, out of the 23 tokens listed in May, the average price change was -5.04%. The largest decrease reached 75%. Although visually these projects' prices experienced pumps shortly after listing on Binance Alpha, they mostly faced significant retracements and declines after the hype. Therefore, listing on Binance Alpha does not signify the birth of a unicorn; it merely adds another entry point for trading.

Furthermore, for projects that conducted initial coin offerings (ICOs) with airdrops, it seems they did not gain favorable market attention. The 7 airdropped tokens listed in May experienced an average decrease of 31.5%, with all of them in a declining state as of May 14. Hence, airdrops and volume manipulation activities do not drive an upward price trend for projects.

Overall, the average market capitalization of projects listed on Binance Alpha reached $70 million, with the lowest token market cap around $1.6 million and the highest, MOODENG, reaching a market cap of $271 million. Several new tokens in the Solana ecosystem have an average market cap exceeding $100 million, indicating a higher requirement for the Solana ecosystem.

Endgame of Burnout: Arena of Professionals vs. Exit of Regular Users

For the ecosystem and projects, Binance Alpha represents exposure and a gathering place for traffic. However, for users, the current burnout is eliminating regular users, turning it into a battleground for professional studios and whales. With the points threshold reaching 205 points, users need to earn at least 15 points daily to keep up with the threshold. Based on an initial investment of $1,000 (earning 2 points), users also need to generate a daily trading volume of $8,000 to accumulate points. This daily trading volume's slippage + gas fees may amount to over $10. Failure to reach the next threshold or receiving minimal airdrops results in a double loss where users lose money and effort. For the latest RDAC token airdrop, the amount sold was roughly $25, making it challenging to cover the cost of 205 points.

It is foreseeable that the points threshold will continue to rise, and according to the current rules, the higher the daily points needed, the exponentially higher the required trading volume. Either Binance Alpha increases the airdrop amount for single addresses, or mass user exodus from the burnout game occurs to bring the points threshold back to a reasonable range. Nonetheless, this burnout game seems to be approaching its end. The DEX trading volume on the BSC chain has also started to decline in recent days, with $26.4 billion on May 15, a 16.4% decrease compared to $31.6 billion on May 12.

Overall, Binance Alpha's "Traffic Overflow" effect shows significant differences in how it is manifested across different ecosystems. The Sui ecosystem did not absorb a large amount of wash trading activity as expected; instead, the Solana ecosystem demonstrated a stronger positive interaction and growth. For project teams, the short-term highlight brought by Alpha often fails to translate into sustained value support. Price declines after reaching the peak shortly after listing have become the norm, and airdrop activities have not been able to act as a savior for prices. Each project providing airdrops has become a "bill payer" promoting Binance's wallet product.

The more fundamental issue is that this points-driven frenzy is mercilessly squeezing out ordinary users from the table. The continuously rising points threshold, the exponentially growing trading volume demand, and the diminishing airdrop rewards have transformed Binance Alpha into a "zero-sum game" between professional studios and large holders. The recent decline in trading volume on BSC chain DEXs also seems to indicate that this model, which relies on high-intensity "in-crowd" behavior, is approaching its sustainability tipping point.

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