OKX Buddies Episode 8 | In-Depth Conversation on Airdrops: The Way and the Art

By: blockbeats|2025/03/01 09:00:03

Source: OKX

From Investment Banking to Web3? Entered the industry in 2017, played during the "DeFi Summer" in 2020, and unexpectedly discovered the airdrop track? Received multiple airdrop windfalls after just four years in the space?

How did the "Airdrop Master" Kui_gas achieve this? If you are also an airdrop enthusiast, this "Airdrop Bible" is a must-read —

Kui_gas believes that the core secret to airdrop success lies in "Gas Loss," that is, where is the Gas consumed? When dissected, it boils down to two points: 1. Whether the gas consumed increases weightage, and 2. Whether the gas consumed enhances on-chain reputation.

This is an "OKX Friends" series interview aimed at exploring the professional stories, industry insights, and lessons learned from KOLs with different backgrounds for the benefit of novice users. In this issue, the interviewee is
Mercy Mercy_okx. Welcome everyone to follow along~

Article Overview:

Chapter 1: Background: How did one get into airdrops and become an expert

Chapter 2: Core Airdrop Strategy: How to filter high-quality airdrop projects

Chapter 3: The Future of Airdrops

Chapter 4: Advice for Beginners: How to start airdropping from scratch

Chapter 5: Advice for OKX

Chapter 1: Background: How did one get into airdrops and become an expert

1, What was the turning point for entering the industry? Why is "Airdropping" a "gold mine"?

I have a background in finance, with a major in securities investment and management. I have worked in traditional finance in hedge trading and investment banking. I entered the cryptocurrency space in 2017 and during the "DeFi Summer" of 2020, I discovered the airdrop track opportunistically.

In fact, I knew about BTC in 2009 when it was not worth much. At that time, I even mined it with my laptop, but I didn't understand the technology well, mostly due to my low awareness and lack of understanding of the value of this new thing, so I missed out. I really started getting involved during the 2017 bull market, attracted by the meteoric rise. I wanted to make big money; that was my purest motivation at the time. After that, from 2018 to 2019, I gradually explored DeFi, such as protocols like MakerDAO, Compound, Uniswap, etc.

During the 2020 "DeFi Summer," I found that DeFi mining could be combined with airdrop farming, and the compounding effect was very noticeable!

It was during the Uni and Sushi token distribution events that I truly realized that airdrop farming was a viable strategy. So, I researched many protocols I believed in, including ENS and Paraswap. From that point on, I heavily invested in multiple wallets. Subsequently, ENS and Paraswap conducted airdrops. ENS airdrop rewards exceeded 100,000 RMB for a single wallet, while PSP airdrop rewards started at $10,000 for a single wallet. This was also the first significant windfall I received in this field, validating that airdrop profits were achievable—it felt like striking gold.

2, Why did you want to create and initiate 33DAO, and what was your initial intention? What impact has it had on you since its establishment?

33DAO is a collaborative, co-building, and sharing DAO organization, of which I am one of the initiators. It has been running for 4 years now, with 35 people distributed globally. We must hold weekly meetings, and everyone must participate. I calculated that in the past 4 years, 33DAO must have held no fewer than 200 weekly meetings.

The initial intention was simple—to gather a group of talented and thoughtful individuals together, to form a truly valuable community through regular communication, in-depth discussions, and the clash of viewpoints. At the same time, we are continuously engaging in external activities, such as tutorials, market insights, Space discussions, etc., to help our airdrop farming partners get started more quickly and better understand Web3.

Regarding the impact on myself since its establishment, I feel there are three main points: First, I believe the most direct impact is that I have met a group of amazing individuals, and everyone has achieved great results through this platform. These members motivate and influence each other, enhancing their understanding and eventually turning it into tangible results. I think this is a great process.

For example, during the recent Chinese New Year, when the Trump token was launched, within the first ten minutes, a member shared some information. Initially, everyone thought it was a scam. However, through collaborative data analysis among members, the information was confirmed to be true. Consequently, everyone took positions in the shortest time possible. I remember the price was around $0.5-1 at that time. In about two days, it increased by approximately 100 times. In the end, many people achieved extraordinary results. Unfortunately, I was overseas at the time and did not invest enough, which was a painful missed opportunity! At the same time, I have a deep understanding of the importance of being part of a close-knit community and the significance of interacting with the right people.

Second, the existence of 33DAO constantly drives me to produce content. It means that I need to continue researching and sharing insights. Many of these understandings are not innate but evolve through continuous learning, deep thinking, and discussions with community members. This mechanism of self-improvement through constant content creation has had a significant impact on me. For example, many projects we once focused on, such as ARB and Strk, provided great results as people in the community exchanged ideas and motivated each other during bear markets.

Finally, the accumulation of resources and connections. 33DAO has given us the opportunity to directly engage with top overseas projects, many of which were first discovered through the community's collective efforts. Through various project interactions, we gain a broader perspective, and the close interaction among members enhances cohesion, making it feel like grassroots truly integrating into the Web3 ecosystem.

Chapter 2: The Core Strategy of Rug Pulling: How to Screen Quality Airdrop Projects

1 How do you screen for quality airdrop projects? What are the key metrics you pay most attention to? (Such as team background, tokenomics, community activity, etc.)

Key metrics to focus on for quality projects: Sector, funding background, ecosystem layout, team background, on-chain data, technological innovation points, and of course, marketing ability, event organization ability, ecosystem development ability. When analyzing and screening projects, I personally focus on the project's risk-reward ratio, probability, and cost. I believe this is a highly complex process, and each step is a practical methodology I have summarized over the years.

1. Categorize the Sector, Focus on Mainstream

There are only a few major sectors, and with enough exposure, you can naturally differentiate them. Start by going through the mainstream sectors to establish basic knowledge, such as L1/L2, ZK DeFi, LSD, Restaking, BTCFi, Move language, etc. I usually rank projects within the ecosystem, then individually analyze the risk-reward ratio and probability.

2. Look for Highlights and Protocol Technological Innovations/Features.

After going through a lot of content, I focus on what the project's core advantages are. How is it different from competitors in the same sector? If you have time, you can read the whitepaper and official documents, but initially, I recommend developing an understanding of the sector. Once you see a project, you should quickly judge what it does and then dive deeper. One that left a deep impression on me is Mavrick ... on ZKSync, with high APR, I discovered a huge opportunity.

3. Pay Attention to Institutions, Investors, and a Multi-Dimensional View

Projects backed by institutions have higher credibility, especially star-studded ones that are less likely to exit scam and have a higher ceiling for growth. Institutional funding and investors, seen from the VC perspective. With institutions already doing the filtering, ordinary projects are effectively screened out, increasing the success rate. Personally, I prefer to keep an eye on institutions I admire, such as Hack VC.

Core idea: First look at the sector, quickly assess positioning, then look at the project highlights, and finally consider institutional investment, find the project's alpha, analyze the project's marketing approach, especially with a project perspective. Explore from multiple angles and dimensions.

I have turned this process into a real-life blind date self-introduction process. What do you do, what does your family do, do you have money, a house, a car, a job, etc.? In short, why should I invest in this project needs to be very clear.

2. Project teams usually use technical means to identify a Sybil attack. In a situation where you are not identified as conducting a "Sybil attack," how do you reasonably use a multi-account strategy?

This is a good question. Due to time constraints, I will try to be as comprehensive as possible.

1. Let's first talk about what a Sybil attack is: An individual or group creates a large number of accounts to manipulate the network, protocol, or resource allocation through deceptive actions. This often involves batch operations, programmatic actions, robotic operations, etc.

2. What the project team thinks and does: The project team and ecosystem hope for real users to participate in the network, and rewards are also intended for real users. The project team will use on-chain data analysis, address correlation, behavior pattern detection, and other technical means to identify, with a typical example being Nansen's AI cluster analysis.

3. The essence of a Sybil attack: Not every use of multiple accounts constitutes a Sybil attack. It is the bulk creation of non-contributing spam accounts that abuse the rules to receive airdrops that defines a Sybil attack. The core of the project team's Sybil attack detection is "decentralization and de-batching of accounts."

4. Answering your question: How to reasonably use a multi-account strategy?

My view is: Create "boutique accounts," where each account is "independent + authentic." Classic examples of this include the recent Pengu and past Tia cases with individual addresses holding between $500 to $2000. Boutique accounts refer to high-quality accounts, each with a genuine user's on-chain records, independent behavior, and a reasonable on-chain asset distribution. Multiple accounts also follow the principle of risk diversification. Having multiple accounts does not equate to conducting a Sybil attack; instead, a multi-account strategy is simply a statistical principle, a broad coverage principle where having multiple accounts may offer better odds of profit than a single account.

Specific approach:

Initial Phase - Basic Principles:

1. Ensure reasonable fund circulation, striving for differentiation from the start, including fund sources.

2. Ensure reasonable fund circulation, avoiding centralized deposits and withdrawals.

3. Randomize interaction time and amounts to avoid mechanical operations.

4. Utilize multiple chains, making the account appear more natural through traces of real user activity.

Account Farming Interaction Phase:

1. Non-batch operation, each account has independent behavior

2. Interaction timing, avoiding assembly line operation, such as randomizing amount during interaction, transaction order, and combining multiple types of protocols

3. Multi-chain layout, making the account more natural, with interaction paths as independent as possible

4. Creating high-quality user profiles and behaviors, holding different assets to increase account weight

5. Participating in real activities to increase account weight. Examples include DAO voting, NFT Minting, and DeFi Staking

6. Combined interaction, embedded interaction, integrating DeFi strategies, focusing on optimizing Gas consumption

3. How to Understand "Boutique Account"?

The term "Boutique Account" refers to a high-quality account, with each account having on-chain records of real user behavior, independent actions, and a reasonable distribution of on-chain assets. Of course, everyone's understanding of a boutique account may vary. Projects distributing rewards to addresses also hope for real and high-quality accounts. Some may distribute equity NFTs for their own projects, while others focus on on-chain interaction profiles. The key focuses are often funds, activity, diversity, on-chain identity, loyalty, mainnet data (gas consumption, time, transactions, activity time), NFT holdings, etc. Be as real as possible.

Main focal points: Wallet history, interaction behavior, fund flow, asset holdings (tokens, NFTs), balance retention, multi-chain activity, partial social binds...

4. How to Control Cost in High Gas Fee Environments? On high Gas fee chains (such as Ethereum), what are your recommendations for optimizing interaction strategies?

1. Personally, I do not use many of the tools mentioned by others such as IP, ADS, and various programmatic methodologies mainly because I am not familiar with them. I focus more on the on-chain profile formed by gas loss through the account itself.

2. The cost of interactions with my own account includes: capital cost and gas cost.

3. Therefore, the core points I care about are where Gas consumption is occurring, either to increase weight or to enhance the on-chain profile. These two points are crucial to targeting the scope of airdrops from a project's perspective.

4. In terms of specific strategies, it is about leveraging DeFi, arbitrage, trading, minting, or transactions with higher weighting for the project. Recoup as much of the lost gas cost, while improving and enhancing the account profile. This has a significant reflexive nature; you must first learn to lose money and gas.

5. For high Gas fee blockchains like Ethereum, what are your recommendations for optimizing interaction strategies? The situation may vary, as in the past few years, only the first year had expensive Gas fees, while subsequent Gas fees were low. For example, currently on gas1, there is little activity, making it a good time to polish a new account. You can take advantage of this opportunity to interact with mainnet data in conjunction with a specific project.

5. Different projects have different interaction requirements. How do you adjust your strategy based on the project's characteristics?

Each project has different requirements for airdrop interactions. Blindly following tutorials is not very meaningful at this stage. Everyone hopes to achieve precise interaction with minimal cost and maximum return. This is very difficult to achieve and requires long-term practice, tracking, and dealing with uncertainty and reflexivity. This is also the most challenging aspect of this space.

1. My strategy has always been high-quality accounts, weighted interactions, calculating high input-output ratios, and risk control. I use a strategy of targeting high-quality protocols with high-quality accounts to execute transaction protocols. Different projects have different airdrop distribution logics, so bulk operations won't work, and instead, a targeted layout is needed. From my experience, success is not simply about quantity but about finding the correct interaction strategy that aligns with the project's goals and fits my own personality.

2. For example, when it comes to L1 / L2, one must consider TVL, authenticity, choosing native DApps, and a diverse portfolio. Take a realistic view to navigate the ecosystem.

For DeFi protocols, the focus from the project's perspective should be on rewarding committed users who provide long-term liquidity and engage in transactions, considering factors like deposit duration, amount, LP, etc. This requires a specific analysis based on on-chain data for each individual protocol.

When it comes to cross-chain bridges, staking protocols need to be assessed based on factors like the protocol's TGE (Token Generation Event) time, security, market positioning, and input-output ratios.

Case studies like EigenLayer and Babylon.

Furthermore, interactions can also enhance the quality and weight of an account. Here, I can elaborate on my logic behind participating in the W Wormhole project. For profits exceeding $10,000 with a single account, if you're interested in hearing more, I can explain further... I've discussed it, but prefer not to write about it here.

For community-oriented projects, it's important to encourage contributions. If the project involves NFT-related gameplay, emphasis should be placed on ecological NFTs and holding equity-type OG NFTs.

"Quality accumulation" is more important than "quantity accumulation," especially as the current market increasingly values genuine users. Therefore, precise interaction, proper fund allocation, and long-term account cultivation are the key focuses. In the current airdrop landscape, success is not about the number of wallets but about researching the project, understanding the rules, and executing effectively!

6 Many projects choose to sell the received tokens after an airdrop. How do you determine the right time to sell?

This is something I'm not good at. Now I hold a bunch of meme coins, and I am the typical representative who knows how to buy but not how to sell. I think there are many reasons for this. One aspect is that the market has changed. In the previous cycle, holders became rich overnight, but this time if you hold, you're likely to suffer losses. I held OP and ARB for over a year before. Some projects I staked in, and when the price dropped by 90%, many small gains turned into losses. Some projects airdropped tokens, and I truly haven't sold any yet, such as EigenLayer. If I encounter projects that have suffered heavy losses, I play dead and wait for them to go to zero, treating the listing price as the cost basis and recognizing the loss. I have always not pursued absolute value but rather a mentality of relative value.

After suffering many losses, based on my personal situation, at the current stage, I would roughly sell one-third of the airdropped tokens I receive, and then evaluate based on the project and market conditions. Most of the projects I acquired were VC coins. My main focus is on the project's final valuation, market cap at listing, unlocking schedule, and most importantly, market conditions. In fact, we cannot serve as a reference. The main reason for not wanting to sell is emotional attachment to the airdrop!

Chapter Three: The Future of Airdrops

1 How do you view the emergence of Pump and other meme launch platforms, and what impact will this have on meme coin trading?

Platforms like Pump.fun have lowered the token issuance threshold, allowing anyone to issue tokens within seconds using a one-click issuance model, automatically creating liquidity pools. In essence, this is an evolution of a new and extremely free asset issuance model. Its emergence signifies a shift from the early ICO and IEO models to the airdrop model, evolving into the current self-issuance model. It reduces the issuance barrier while also changing
the mindset and strategy of Web3 participants (especially meme coin traders).

1. Impact on Project Token Distribution

This free asset issuance model has lowered the token issuance barrier. With one-click issuance + automatic LP creation, no technical knowledge or funding is needed to enter the market. This new model not only impacts
the Meme sector but also brings changes to how traditional Web3 projects distribute tokens. Many projects choose not to list on exchanges first but rather directly on DEXs. Project teams no longer need to rely on traditional fundraising or token lockups but instead let the market determine the token's value.

2. Impact on Sir's Airdrop Lurking

Impact 1 - Mindset: The airdrop lurking cycle has been drastically shortened, posing a huge test to human nature. Speculative mindset intensifies. Previously, when airdrop lurking, everyone was used to a 3-24 month interaction period, patiently waiting for the Token Generation Event (TGE). Now, with Pump Meme coins, the price can skyrocket a hundredfold in just a few minutes, only to possibly drop back to zero within minutes. Compared to the lurking time, the returns are uncertain, and there are characteristics such as rug pulls and anti-lurking, making it unappealing compared to meme coins.

Impact 2 - Interest: Sir's airdrop lurking "belief system" collapses, and speculative gameplay is infinitely amplified. In the past, airdrop lurkers emphasized interaction depth, on-chain contributions, technical features, and value. Sir lurkers hoped for the long-term development of the project. In the Meme mode, the core driving force of the token is "emotion + narrative + FOMO for funds". Many lurkers no longer participate in airdrops but turn to memes. They no longer care about the project itself, only focusing on short-term fluctuations because it is more exhilarating, faster, and has a greater wealth effect. Everyone hopes to be the chosen one.

Impact 3 - Gambling: Sir lurkers become more FOMO-driven and easily fall into a gambling mentality. Traditional lurking emphasized stable and methodical approaches, but the Meme ecosystem has pushed the market into extreme speculative modes, increasing the tendency towards gambling.

2. Future Trends in Airdrop Lurking: Is There Still Opportunity Amid Gas Losses on Multiple Wallets?

I believe there is. Without multiple wallets, it is impossible to become rich or achieve excess returns. However, there needs to be a balance between personal funds and wallet fund circulation and distribution. Losing gas on multiple wallets is acceptable, but do not burn gas. There is a distinction here. The essence of future airdrop lurking lies in the "boutique wallet." Authentic interaction + natural fund flow + long-term activity is the optimal strategy. Lurking is no longer just about "quantity stacking" but rather a test of "strategy + execution + information asymmetry"! Those with strong execution capabilities can still stack boutique wallets and even more of them.

3. For projects that require Gas Fees and social media tasks, how should one handle them?

Some projects have a dual screening mechanism in their activity design, requiring both on-chain interaction (Gas Fee) and social interaction (Twitter, Discord, Telegram tasks, etc.). This model places higher demands on lurkers. If not handled properly, it may lead to excessive costs and time investment, ultimately resulting in mismatched returns. My advice and strategy are:

1. First, determine if the project is worth the "Gas Fee and social media" requirements. Before that, you must have your own logical judgment and thinking, while also ensuring that the project aligns with your personality, and devise a differentiated interaction strategy.

2. Here, a distinction is made between studios and individuals, and the strategies should be different. As a super individual, personally, I have maintained a set of 3 accounts. These are all early overseas mobile phone registrations, and all are long-term accounts. Within my personal capacity, they are maintained separately on different computers. The maintenance of these 3 accounts depends more on your behavior. Occasionally, there is a need for differential activity to keep them active. The 3 accounts are also checked for correlations, activity levels, and account quality. Due to time constraints, I won't delve into this further. Anyway, this is infrastructure work that must be done but does not require a large amount of demand.

3. Corresponding to a premium account, you can set up a set of 3 accounts, maintaining a manageable number of accounts that you can handle personally. For example, 100 accounts.

4. More focus on on-chain profiles and high-quality transactions. Abandoning a large number of ineffective web3 interactive tasks that are meaningless, the judgment of activities designed by the project team is crucial here.

4. Will TX be useful? What is the role of transaction volume in the process, and is it still effective?

As the project team's screening criteria and anti-whale mechanisms continue to evolve, this simple and crude accounting method is no longer the best strategy. Currently, the emphasis of the process is more on "interaction quality + transaction authenticity." However, TX and transaction volume need to be combined with "interaction depth." To give an inappropriate analogy, if you visited the bank several times before, the bank manager might know you, and occasionally even invite you for a coffee. At this stage, just making deposits may not be useful; you have to be a VIP and a long-term purchaser of their financial and insurance products to matter.

5. What kind of innovative airdrop design in the future will benefit the community, the project team, and the entire ecosystem?

This topic is quite broad and extensive. Doing a successful airdrop distribution is an art for the project team but can be a disaster if executed poorly. Let me briefly explain my understanding:

1. Airdrops have been proven to be a vital method for early growth and user acquisition in Web3 projects. However, the traditional airdrop model indeed has many problems, leading to projects giving out a significant amount of tokens but failing to attract long-term users. High percentages of "low-quality users" lead to damage to the tokenomic model.

2. A good airdrop is designed to attract new users, reward early adopters, retain more users, and promote growth around the project and ecosystem's economic flywheel. More innovative, fair, and sustainable airdrop designs should achieve a "win-win-win" situation for the project team, community users, and the ecosystem.

Future airdrop models and methods must adhere to the following core principles:

1- Long-term incentive mechanism (to avoid short-term selling, encourage ongoing interaction, and long-term contributions)

2- Combine on-chain data with off-chain community contributions to screen for genuine users, those who truly contribute

3-3 Win-Win Situation (User Growth = Ecosystem Growth)

4- Public Transparency (Clearly explain each rule and its rationale), no insider trading

Specific methods are diverse, and an example can be given: the "Gradual Release" mechanism, referring to OP's airdrop, multiple rounds of airdrops, comprehensive and continuous rewards for long-term contributions, on top of which more elements can be added, making the airdrop strategy and design more robust. There is no perfect solution, only an attempt to take care of small and medium retail investors as much as possible, as well as more genuine users.

Chapter 4: Advice for Beginners

1 How to Start from Scratch. For beginners who are just starting out and may have a few hundred U in funds, how should they get started?

Leveraging is a low-cost way to enter Web3 and earn some profits, but it is not simply a free money game. It should be a combination of cognition, strategy, and execution. Different people have different interaction strategies and methods at different stages, and there are differences between those with a technical background and those without. Here is my advice for newcomers who are just starting out and are not tech-savvy:

1. Philosophical Aspect (conceptual level): Correct Understanding

• Learning: Understand some ways to make money in the industry, the airdrop patterns, explore the ecosystem and protocols, and see which projects suit you in the early stage

· Principle: After making your own project judgment, it is clear that not all projects are worth leveraging. Before leveraging, you should have selection criteria. The essence of leveraging is "low-cost investment," and time, gas fees, and opportunity costs are all your "investments"; avoid FOMO.

• Direction: Choose the right track. Direction is more important than effort, and when leveraging, choose a track that is future-proof, has a large fund size, and may have long-term incentives

• Investment Research: Build a project library, learn to view projects, follow projects, calculate ROI, look at risks, odds, weight points, etc.

2. Tactical Aspect (execution level): Specific Methods

• Learn Correct Interaction: For example, how to swap, provide liquidity, find tokens, how to complete project tasks using the "3-set," etc. The core is to enhance interaction skills.

• Increase Account Weight: Learn to engage deeply and become an active, genuine, high-quality user in the ecosystem protocol.

• Cost Control: There are many ways to save costs, not only through staking and Kuigas, but also by participating in high-quality testnet projects available in the market.

• Multi-angle Participation: For example, from a user's perspective, deep engagement in the ecosystem, and from a creator's perspective, assisting projects in writing content, and so on.

Summary: From slow to fast, less is more.

2 Common Misconceptions?

Richness: Sometimes it's beneficial to suffer losses; some pitfalls must be experienced personally, and the most useful lessons come from self-reflection. People cannot teach you, but a situation can teach you at once.

3 How Can Beginners Access High-Quality Information Sources? Do You Have Any Recommended Information Channels or Tools?

A simpler way is to follow high-quality Key Opinion Leaders (KOLs) on platforms like Twitter, YouTube, etc. You can find projects through rootdata @RootDataCrypto, find the corresponding X account and team members, as well as information on funding.

For learning, OKX's web3 wallet @OKXWeb3_CN also offers many basic project tasks that you can use for practice.

Chapter Five: Recommendations for OKX

1 What Role and Influence Has OKX Played in the Development of Various Ecosystems?

OKX's wallet supports a particularly large number of ecosystems and chains. As far as I know, it currently supports 127 chains. Personally, in my interactive wallet, I consider OKX as my go-to wallet, and I usually share the same set of mnemonics with OKX and Little Fox.

Features: Secure, timely, smooth—the list is endless. I won't write about it anymore, but it's just so user-friendly. The Movement ecosystem owes a lot to the support of the OKXWeb3 wallet. When Movement needed to download an additional wallet, which was not user-friendly, I raised this issue with Haiteng @Haiteng_okx. He immediately connected me with relevant colleagues, swiftly supported Movement, making things much more convenient for us. We no longer needed to move assets back and forth.

2. In future development, what eco-partnerships would you like to see with OKX? In what form? What kind of partnerships would the community like to see?

The ecosystem is very broad and comprehensive. As far as I know, OKX's wallet team is very competent, and their business development (BD) expansion is also very strong, with rapid support and timely bug fixes. I think there may be room for optimization in terms of airdrop interaction. OKX @okxchinese has done well on a broad scale, but lacking in depth. Many users use OKX, so there could be a valuable growth system built around the user's wallet situation. This system can collaborate with many ecosystems, help both sides attract users, or provide OKX wallet users with more data benefits and rewards.

In terms of tools, things have been done quite well. For example, the recent real-time K-line support on X and one-click token trading. Regarding airdrops, OKX can act as an airdrop detector, where users with on-chain wallets can detect any unclaimed airdrops.

Closing:

Abundance: The experiences of these 5 years have strengthened my belief that true value lies not in what you know, but in what you can connect and execute.

In this ever-changing market, the strongest competitiveness comes from continuously evolving cognition, forward-looking layouts, and damn strong execution. Time is pressing, so please correct any mistakes in what I've said!

Mercy: I first heard of Teacher Abundance as if he were a legendary figure. Some even said that Teacher Abundance spends all year sitting in a temple doing airdrop tasks... After truly getting in touch, I found that whether it's the sincere and humble way of conducting oneself or the focused and diligent professionalism, both are worth learning and respecting for Mercy.

In this OKX friends' conversation on the "philosophy and art" of airdrops, Mercy gained three key insights:

1. Outstanding judgment is needed—It's more important to be "precisely efficient" than "efficiently vast";

2. High level of responsibility—Take every deal seriously;

3. Strong execution capability—Both newcomers and veterans need it.

Hopefully, everyone can benefit. Once again, thanks to Abundance @Kui_gas for sharing, and we welcome everyone to continue following the "OKX Friends" conversation series.

Risk Warning and Disclaimer

This article is for reference only. The views expressed in this article are those of the author and do not necessarily represent the views of OKX. 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. We do not guarantee the accuracy, completeness, or usefulness of such information. Holding digital assets (including stablecoins and NFTs) involves high risks and may experience significant fluctuations. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. For your specific circumstances, please consult your legal, tax, or investment professional. You are responsible for understanding and complying with relevant local laws and regulations.

This article is contributed content and does not represent the views of BlockBeats

On May 13, S&P Dow Jones Indices announced that Coinbase would officially replace Discover Financial Services in the S&P 500 on May 19. While other companies like Block and MicroStrategy, closely tied to Bitcoin, were already part of the S&P 500, Coinbase became the first cryptocurrency exchange whose primary business is in the index. This also signifies that cryptocurrency is gradually moving from the fringes to the mainstream in the U.S.

On the day of the announcement, Coinbase's stock price surged by 23%, surpassing the $250 mark. However, just 3 days later, Coinbase was hit by two consecutive events: a hack where employees were bribed to steal customer data and a demand for a $20 million ransom, and an investigation by the U.S. Securities and Exchange Commission (SEC) into the authenticity of its claim of having over 100 million "verified users" in its securities filings and marketing materials. These two events acted as mini-bombs, and at the time of writing, Coinbase's stock had already dropped by over 7.3%.

Coincidentally, Discover Financial Services, being replaced by Coinbase, can also be considered the "Coinbase" of the previous payment era. Discover is a U.S.-based digital banking and payment services company headquartered in Illinois, founded in 1960. Its payment network, Discover Network, is the fourth largest payment network apart from Visa, Mastercard, and American Express.

In April, after the approval of the acquisition of Discover by the sixth-largest U.S. bank, Capital One, this well-established digital banking company of over 60 years smoothly handed over its S&P 500 "seat" to this emerging cryptocurrency "bank." This unexpected coincidence also portrayed the handover between the new and old eras in Coinbase's entry into the S&P 500, resembling a relay race scene. However, this relay baton also brought Coinbase's accumulated "external troubles and internal strife" to a tipping point.

Side Effects of ETFs

Over the past decade, cryptocurrency exchanges have been the most stable "profit machines." They play a role in providing liquidity to the entire industry and rely on trading fees to sustain their operations. However, with the comprehensive rollout of ETF products in the U.S. market, this profit model is facing unprecedented challenges. As the leader in the "American stack," with over 80% of its business coming from the U.S., Coinbase is most affected by this.

Starting from the approval of Bitcoin and Ethereum spot ETFs, traditional financial capital has significantly onboarded users and funds that originally belonged to exchanges in a more cost-effective, compliant, and transparent manner. The transaction fee revenue of cryptocurrency exchanges has started to decline, and this trend may further intensify in the coming months.

According to Coinbase's 2024 Q4 financial report, the platform's total trading revenue was $417 million, a 45% year-on-year decrease. The contribution of BTC and ETH's trading revenue dropped from 65% in the same period last year to less than 50%.

This decline is not a result of a decrease in market enthusiasm. In fact, since the approval of the Bitcoin ETF in January 2024, the inflow of BTC into the U.S. market has continued to reach new highs, with asset management giants like BlackRock and Fidelity rapidly expanding their management scale. Data shows that BlackRock's iShares Bitcoin ETF (IBIT) alone has surpassed $17 billion in assets under management. As of mid-May 2025, the cumulative net inflow of 11 major institutional Bitcoin spot ETFs on the market has exceeded $41.5 billion, with a total net asset value of $1214.69 billion, accounting for approximately 5.91% of the total Bitcoin market capitalization.

Chart showing the trend of net outflows for Grayscale among the 11 institutions

Institutional investors and some retail investors are shifting towards ETF products, partly due to compliance and tax considerations. On one hand, ETFs have much lower trading costs compared to cryptocurrency exchanges. While Coinbase's spot trading fee rate varies annually in a tiered manner but averages around 1.49%, for example, the management fee for IBIT ETF is only 0.25%, and the majority of ETF institution fees fluctuate around 0.15% to 0.25%.

In other words, the more rational users are, the more likely they are to move from exchanges to ETF products, especially for investors aiming for long-term holdings.

According to multiple sources, several institutions, including VanEck and Grayscale, have submitted applications to the SEC for a Solana (SOL) ETF, with some institutions also planning to submit an XRP ETF proposal. Once approved, this may trigger a new round of fund migration. According to a report submitted by Coinbase to the SEC, as of April, the platform's trading revenue from XRP and Solana accounted for 18% and 10%, nearly one-third of the platform's fee revenue.

However, the Bitcoin and Ethereum ETFs passed in 2024 also reduced the fees for these two tokens on Coinbase from 30% and 15% to 26% and 10%, respectively. If the SOL and XRP ETFs are approved, it will further undermine the core fee revenue of exchanges like Coinbase.

The expansion of ETF products is gradually weakening the financial intermediary status of cryptocurrency exchanges. From their original roles as matchmakers and clearers to now gradually becoming mere "on-ramps and off-ramps" for funds, exchanges are seeing their marginal value squeezed by ETFs.

Robinhood Takes a Stand, Traditional Brokerages Join the Fray

On May 12, 2025, SEC Chairman Paul S. Atkins gave a keynote speech at the Tokenization and Cryptocurrency Working Group roundtable. The theme of his speech revolved around "It is a new day at the SEC," where he indicated that the SEC would not approach enforcement and regulation the same way as before but would instead pave the way for cryptocurrency assets in the U.S. market.

With signs of cryptocurrency compliance such as the SEC's "NEW DAY" declaration, an increasing number of traditional brokerages are attempting to enter the cryptocurrency industry. One of the most representative cases is the well-known U.S. brokerage Robinhood, which began expanding its crypto business in 2018. By the time of its IPO in 2021, Robinhood's crypto business revenue accounted for over 50% of the company, with a significant boost from the Dogecoin "moonshot" promoted by Musk.

In Q1 2025 earnings report, Robinhood showcased strong growth, especially in revenue from cryptocurrency and options trading. Fueled by Trump's Memecoin, cryptocurrency-related revenue reached $250 million, nearly doubling year-over-year. Consequently, Robinhood Gold subscription users reached 3.5 million, a 90% increase from the previous year, with the rapid growth of Robinhood Gold providing the company with a stable source of income.

Meanwhile, RobinHood is actively pursuing acquisitions in the cryptocurrency space. In 2024, it announced a $2 billion acquisition of the long-standing European cryptocurrency exchange Bitstamp. Additionally, Canada's largest cryptocurrency CEX, WonderFi, which recently went public on the Toronto Stock Exchange, also announced its integration with RobinHood Crypto. After obtaining virtual asset licenses in the UK, Canada, Singapore, and other markets, RobinHood has taken a proactive approach in the compliant cryptocurrency trading market.

Furthermore, an increasing number of brokerage firms are exploring the same path. Futu Securities, Tiger Brokers, and others are also dipping their toes into cryptocurrency trading, with some having applied for or obtained the VA license from the Hong Kong SFC. Although their user bases are currently small, traditional brokerages have a natural advantage in user trust, regulatory licenses, and low fee structures. This could pose a threat to native cryptocurrency platforms in the future.

User Data Breach: Is Coinbase Still Secure?

In April 2025, security researchers discovered that some Coinbase user data was leaked on the dark web. While the platform initially responded by attributing it to a "technical misinformation," it still raised concerns among users regarding its security and privacy protection. Just two days before Dow Jones Indexes announced Coinbase's addition to the S&P 500 Index, on May 11, 2025, Coinbase received an email from an unknown threat actor claiming to have obtained customer account information and internal documents, demanding a $20 million ransom to keep the data private. Subsequent investigations confirmed the data breach.

Cybercriminals obtained the data by bribing overseas customer service agents and support staff, mainly in "non-U.S. regions such as India." These agents abused their access to Coinbase's internal customer support system and stole customer data. As early as February this year, blockchain detective ZachXBT revealed on X platform that between December 2024 and January 2025, Coinbase users lost over $65 million to social engineering scams, with the actual amount potentially higher.

Among the victims was a well-known figure, 67-year-old Ed Suman, an established artist in the art world for nearly two decades, having been involved in the creation of artworks such as Jeff Koons' "Balloon Dog" sculpture. Earlier this year, he fell victim to an impersonation scam involving fake Coinbase customer support, resulting in a loss of over $2 million in cryptocurrency. ZachXBT critiqued Coinbase for its inadequate handling of such scams, noting that other major exchanges have not faced similar issues and recommending Coinbase to enhance its security measures.

Amidst a series of ongoing social engineering incidents, although there has not been any impact on user assets at the technical level so far, it has raised concerns among many retail and institutional investors. Especially institutions holding massive assets on Coinbase. Just considering the U.S. BTC ETF institutions, as of mid-May 2025, they collectively hold nearly 840,000 BTC, and 75% of these are custodied by Coinbase. If we price BTC at $100,000, this amount reaches a staggering $63 billion, which is equivalent to the nominal GDP of two Iceland in the year 2024.

Visualization: ChatGPT, Source: Farside

In addition, Coinbase Custody also serves over 300 institutional clients, including hedge funds, family offices, pension funds, and endowments. As of the Q1 2025 financial report, Coinbase's total assets under management (including institutional and retail clients) reached $404 billion. The specific amount of institutional custodied assets was not explicitly disclosed in the latest report, but it should still be over 50% based on the Q4 2024 report.

Visualization: ChatGPT

Once this security barrier is breached, not only could the rate of user attrition far exceed expectations, but more importantly, institutional trust in it would undermine the foundation of its business. Therefore, after a hacking event, Coinbase's stock price plummeted significantly.

CEXs are All in Self-Rescue Mode

Facing a decline in spot trading fee revenue, Coinbase is also accelerating its transformation, attempting to find growth opportunities in derivatives and emerging assets. Coinbase acquired a stake in the options platform Deribit at the end of 2024 and announced the official launch of perpetual contract products in 2025. This acquisition fills in Coinbase's gap in options trading and its relatively small global market share.

Deribit has a strong presence in non-U.S. markets, especially in Asia and Europe. The acquisition has enabled Coinbase to gain a dominant position in bitcoin and ethereum options trading on Deribit, accounting for approximately 80% of the global options trading volume, with daily trading volume remaining above $2 billion.

Meanwhile, 80-90% of Deribit's customer base consists of institutional investors, with their professionalism and liquidity in the Bitcoin and Ethereum options market highly favored by institutions. Coinbase's compliance advantage, coupled with its already robust institutional ecosystem, makes it even more suitable. By using institutions as an entry point, it can face the squeeze from giants like Binance and OKX in the derivatives market.

Facing a similar dilemma is Kraken, which is attempting to replicate Binance Futures' model in non-U.S. markets. Since the derivatives market relies more on professional users, fee rates are relatively higher and stickiness is stronger, making it a significant source of revenue for exchanges. In the first half of 2025, Kraken completed the acquisition of TradeStation Crypto and a futures exchange, aiming to build a complete derivatives trading ecosystem to hedge the risk of declining spot transaction fee income.

With the surge of Memecoin in 2024, Binance, OKX, and various CEX platforms began massively listing small-market-cap, highly volatile tokens to activate active trading users. Due to the wealth effect and trading activity of Memecoins, Coinbase was also forced to join the battle, successively listing popular tokens from the Solana ecosystem such as BOOK OF MEME and Dogwifhat. Although these coins are controversial, they are frequently traded, with fee rates several times higher than mainstream coins, serving as a "blood-boosting" method for spot trading.

However, due to its status as a publicly traded company, this practice is a riskier endeavor for Coinbase. Even in the current crypto-friendly environment, the SEC is still investigating whether tokens like SOL, ADA, and SAND constitute securities.

In addition to the forced transformation strategies carried out by the aforementioned CEXs, they are also starting to lay out RWAs and the most talked-about stablecoin payment fields, such as the PYUSD launched through a collaboration between Coinbase and Paypal, Coinbase's support for the Euro stablecoin EURC by Circle that complies with EU MiCA regulatory requirements, or the USD1 launched through a collaboration between Binance and WIFL. In the increasingly crowded trading field, many CEXs have shifted their focus from just the trading market to the application field.

The golden age of transaction fees has quietly ended, and the second half of the crypto exchange platform game has silently begun.

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Within 24 hours, GOONC's market cap soared to 70 million, could GOONC be the next billion-dollar dog on the Believe platform?

Bitcoin has broken $100,000, Ethereum has surpassed 2500, and is Solana's hot streak about to make a comeback?

The current market is in a state of macro euphoria, with GOONC riding the wave today, skyrocketing 10x in just a few hours, reaching a market cap of tens of millions of dollars, trading volume soaring past 50 million, and rumors swirling that the developer may be from OpenAI (unconfirmed but intriguing enough).

The "gooning" Culture in Forums

A ludicrous and absurd Solana meme that some actually buy into.

GOONC is a meme coin that has sprouted from the "gooning" subculture, offering no technological innovation or practical use, its sole function being speculation.

It takes inspiration from an NSFW term "gooning," which refers to a person being deeply immersed in certain content (you know what), eventually entering a nearly religious-like trance.

In Reddit (such as r/GOONED, r/GoonCaves) and some counterculture media outlets (such as MEL Magazine in 2020), "gooning" has gradually transitioned from an adult label to a meme-addicted, digital content and virtual self-indulgence synonym, arguably the epitome of Degen spirit.

GOONC is playing around with this concept, packaging the addictive nature, uselessness, and irony of gooning into a tradable financial product. The project team has made it clear: "We do not solve blockchain problems, we only trade absurdity." Blunt but oddly genuine.

GOONC launched on May 13, 2025, using the meme coin launch platform Believe App's LaunchCoin module on Solana. This tool is highly Degen: zero technical barriers, a few clicks to create a coin, perfect for projects like GOONC that can come up with ideas out of the blue.

The mastermind behind GOONC is also quite something and is the most talked-about, with KOL @basedalexandoor on X platform (alias "Pata van Goon") personally involved. His profile even caught the attention of Marc Andreessen, co-founder of a16z, making onlookers unable to resist speculating if GOONC has a hint of OpenAI lineage.

While this 'OpenAI Endorsement' is currently just community speculation, it is definitely a good card to play to fuel hype. Saying "we are pure speculation" on one hand, while tagging a few "AI + a16z" on the other.

From Wasteland to Moon in One Night

GOONC took off as soon as it launched. After its launch on May 13, 2025, its market capitalization skyrocketed to $22 million within 4 hours, with a trading volume exceeding $25.6 million in 24 hours. According to platform data, the first day of trading saw an astonishing +41,100% surge, soaring from $0.0000001 to $0.02, becoming a "missed-the-boat" situation.

GOONC quickly formed an active trading community post-launch, with a lot of discussion and trading signals appearing on X platform (such as the 292x return signal provided by DeBot). Liquidity pools on exchanges like Raydium and Meteora grew rapidly, supporting high trading volumes and price increases.

The real climax occurred between May 13 and May 14, with the market cap rising to $5.5 million in the morning and directly surpassing $55 million in the afternoon. By the 14th, it briefly approached a $70 million market cap, with the trading volume soaring to $59 million. Some community members even posted screenshots claiming an increase of +85,000%, creating a new myth out of the ruins.

As of 1:30 pm on May 14, the price stabilized around $0.039, with a total market cap and FDV both around $39.6 million, and a 24-hour trading volume of $5.43 million. Active platforms include XT.COM, LBank, Meteora, and others.

Although there was a slight pullback from the peak ($0.07), the coin's popularity remains strong. For a coin that relies purely on "irony + community + X post" to thrive, this performance is already at a stellar level.

Currently, the background of the token's development team is not transparent, increasing the potential risk of a rug pull. Rugcheck.xyz warns that the creator of the GOONC contract may have permission to modify the contract (e.g., change fees or mint additional tokens), posing certain security risks.

Community members speculate that the meteoric rise of GOONC may be the "last hurrah".

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After Surging 40%, Has Ethereum Price Peaked Upon Exiting the Craze?

Whether you are an insider or an outsider, these days you must be familiar with the news about Ethereum. The reason is simple, causing Ethereum enthusiasts to sigh with emotion and almost throwing off-guard those who defend Ethereum, Ethereum, with a "3-day surge of 40%," climbed to the top of the Douyin Hot List.

Where Does the Rally Come From?

As we all know, Ethereum launched the Pectra upgrade on May 7th. This most significant network upgrade since early 2024 integrates the Prague execution layer hard fork and the Electra consensus layer upgrade, significantly improving Ethereum's performance through 11 improvement proposals. The account abstraction feature (EIP-7702) allows users to flexibly manage wallets through social media accounts or multi-signature schemes, reducing the user threshold, attracting more users and developers. The staking mechanism optimization increases the validator ETH cap from 32ETH to 2048ETH and introduces a flexible withdrawal method, making it easier for institutions and individuals to participate in network security, enhancing the market's confidence in Ethereum's long-term value.

At the same time, Pectra optimized the interaction efficiency of Layer 2 networks such as Arbitrum and Optimism, making transactions faster and cheaper, leading to a surge in on-chain activity. As a crucial step for Ethereum's transition from "2G" to "5G," the Pectra upgrade not only enhances network vitality but also "recharges confidence" in the market, directly driving the price increase.

Related Reading: "Ethereum Skyrockets 22% in One Day, E Enthusiasts Rejoice"

It's not just Ethereum itself, as Wall Street also brought important bullish news.

The world's largest asset management company, BlackRock, proposed to the SEC allowing Ethereum ETFs for staking. This proposal is expected to elevate Ethereum ETFs from a mere investment tool to a bond-like "interest-bearing asset," bringing investors both capital appreciation and passive income, igniting market optimism about Ethereum's future potential.

Specifically, BlackRock has proposed to amend its S-1 filing to allow investors to create and redeem ETF shares directly with Ethereum instead of the U.S. dollar (i.e., in-kind redemption). This move, combined with its $2.9 billion BUIDL Fund launched in March 2024, aims to deepen the integration of traditional finance with blockchain. The BUIDL Fund is a tokenized fund operating on the Ethereum network, investing in traditional assets such as U.S. Treasury bonds. This setup is highly attractive to institutional investors, as they can not only benefit from Ethereum's price appreciation but also earn stable cash flow through staking.

Robert Mitchnick, BlackRock's Head of Digital Assets, stated in a CNBC interview in March 2025 that the addition of staking functionality will significantly enhance the appeal of the Ethereum ETF. He admitted that when the Ethereum spot ETF was launched in July 2024 without staking functionality, the market demand was lackluster, and staking could be the key to reversing this trend.

Meanwhile, the SEC's shifting stance on cryptocurrency regulation has also fueled this upward trend. During the tenure of the previous SEC chairman, the regulatory approach was tough, and staking was strictly viewed through the Howey test as a potential unregistered security. Therefore, when approving the Ethereum spot ETF in May 2024, staking functionality was explicitly prohibited.

However, with Trump back in the White House and Paul Atkins taking over the SEC, there has been a noticeable relaxation in crypto regulation. Apart from BlackRock, ETF issuers such as Invesco Galaxy, VanEck, WisdomTree, and 21Shares have also submitted applications for similar staking and in-kind redemption.

Related reading: "New Chairman Takes Office, SEC Transforms into 'Crypto Daddy' Within 48 Hours"

If staking ETFs are approved, the benefits are likely to go beyond price appreciation. The introduction of staking functionality could redefine the role of crypto assets, making them more similar to traditional financial products that provide returns and value appreciation, thereby driving Ethereum closer to mainstream finance.

Currently, the SEC still needs to address several decisions related to crypto ETFs, including whether to approve ETFs for Solana, XRP, Litecoin, and even Dogecoin. With the calls for an "altcoin season" growing louder, Ethereum's strong performance may just be the beginning of a larger crypto market frenzy.

In addition, the Trump family-related DeFi project WLFI is also bullish on this wave of rise, with frequent on-chain activities. According to on-chain data analyst @ai_9684xtpa's monitoring, a WLFI-related address is currently borrowing coins to go long on ETH, borrowing 4 million U from Aave to buy 1590 ETH at an average price of $2515 per ETH.

Has Ethereum's Price Peaked in This Wave?

For this epic surge of Ethereum after half a year of silence, the community has indeed gained more confidence and hope, which has also led to a revival of the entire altcoin market. However, amidst the joy, there are also voices of pessimism. Below is a summary conducted by BlockBeats based on community discussions.

The optimists point out that the current market structure is similar to the eve of the bull markets in 2016 and 2020, predicting a life-changing surge in the next 3-6 months, where some altcoins may even achieve astonishing single-day gains of up to 40%.

@liuwei16602825 stated that this surge signifies the return of the bull market as a sure thing. There is no need to worry about a pullback. The driving force behind the surge uses a high-cost isolated operation, fearing a drop more than any retail investor and will definitely do everything to support the price.

Related Reading: "Ethereum Leads the Surge Triggering the 'Altcoin Season' Speculation, How Do Traders View the Future Market?"

The bears mainly believe that this surge is different from the bull market of 2021, as the current market lacks the confidence of large-scale retail investors entering and holding positions for the long term, with funds rotating too quickly.

@market_beggar observed that a Bitfinex E/B whale has started to close positions and believes that if this whale maintains its high-speed position-closing operation for the next few days, it can be inferred that the whale no longer sees the upside potential of ETH, preparing to take profits and exit. The closing time will be a key focus going forward.

@FLS_OTC stated that there are still many uncertainties at the macro level, and the liquidity cannot support a major bull market. At this stage, it is a "last hurrah," not a complete reversal, and will continue to remain in a short position.

@off_thetarget believes that after ETH transitioned from POW to POS, it lost the "gold standard" of mining machine power cost support. The staking economic model led to a breakdown in value anchoring. Additionally, the L2 ecosystem (such as Starknet, zkSync, etc.) suffered from liquidity fragmentation, failing to establish an effective capital inflow mechanism, causing the collapse of the split disc pattern. Furthermore, the ETH community's excessive pursuit of technical narratives divorced from real-world needs resulted in a weak ecosystem growth. Therefore, he believes that ETH's intrinsic value system has crumbled, and the price is bound to plummet to the 800-1200 range, with a decisive short position at 1800.

@Airdrop_Guard, based on the core logic of the "High Probability Trading Strategy," where three sets of underlying logic different trading systems (such as volume depletion, price supply-demand, long/short position funding rate, etc.) simultaneously issue a short signal at the same point (2580), creating a high-probability trading opportunity. He emphasizes that these systems must be based on different algorithms and logics (rather than mere technical indicator overlays). The current ETH trend aligns with the short conditions in multiple independent dimensions of his trading system, hence the decision to short.

Overall, Bitcoin still maintains over 54% market dominance, and institutional funds' continued preference for it may limit the altcoin's upward potential. The market's future direction will depend on multiple factors, such as Bitcoin's price trend, global macroeconomic conditions, and whether funds can effectively rotate from Bitcoin to the altcoin sector.

Although Ethereum's recent leadership in the market has brought about optimistic sentiment, investors still need to remain rational as different sectors of altcoins are likely to show divergence in trends. Whether this round of Ethereum's rise will usher in a true altcoin frenzy may require more time and conducive conditions.

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Binance Sparks "Delist Concept": Can CEX Still Produce the Next ALPACA?

On April 24, Binance announced that it would delist four tokens, including Alpaca Finance ($ALPACA), on May 2, and cease trading of these pairs' perpetual futures contracts at 00:00 on May 1, 2025, Beijing time. Fast forward to the last day of perpetual futures trading delisting, ALPACA surged on the liquidation heat map. Over the past 24 hours, a total of $52.21 million evaporated in ALPACA's contract trading, exceeding the sum of the token's liquidation volume over the past two years.

Historically, when a token is listed on Binance, many traders would buy the news instantly ("Buy the News"). As the Binance listing effect gradually waned, traders found another path, which is to short sell the tokens set to be delisted from Binance ("Sell the News"). This strategy often has a very high success rate. However, as traders followed this path, they encountered the Alpaca on their short-selling journey.

The Long and Short of ALPACA's Journey

Every thrilling market manipulation game requires careful preparation. Before Binance's official announcement, on April 10, $ALPACA was ranked 7th in the preliminary list of the second batch of "Vote for Delisting" on Binance, causing its price to plummet almost by half. However, in the five days leading up to Binance's official announcement, from April 19 to April 23, trading volume suddenly surged.

The story traces back to the start of Binance's second round of "Vote for Delisting," where ALPACA was included in the delisting candidates list, ranked 7th among 17 projects. After the completion of Binance's delisting vote count, $ALPACA was included in the projects to be delisted. The market did not react significantly, price fluctuations were not substantial, but trading volumes expanded abnormally, suggesting the entry of "manipulative funds" into the community.

On April 24, Binance officially announced the delisting of the $ALPACA spot trading pair on May 2 and the settlement of the futures contracts on April 30. Following the announcement, 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 price "rollercoaster" moments; within an hour, the price surged from $0.029 to $0.0857, an increase of about 195%, only to rapidly drop back to $0.04 within 3 hours. Shorts were caught off guard, and the open interest of contracts surged rapidly, initiating the "long and short grinder" mode.

On April 25, Alpaca Finance officially announced that the trading volume in the past 24 hours had exceeded 1 billion tokens. The liquidity provider had suggested a "minting for stability" to be returned to the treasury after a decrease in trading volume. However, as public opinion began to ferment, opposition filled the community. Alpaca Finance deleted the previous tweet and posted a new one at 9 p.m. on the same night, announcing the cancellation of the minting due to community opposition.

On April 26, Binance amended the contract funding rate rules, shortening the maximum rate cap settlement period to hourly and setting it at up to ±2%. Some high-leverage accounts continued to hold short positions against the high rate and were liquidated. Millions of dollars disappeared within a few hours, with $13 million in short positions vanishing on a token with a market cap of less than $30 million.

With the establishment of this short-selling trend, the price skyrocketed nearly 12 times from a low of $0.029 to $0.3477 within 3 days. The contract's open interest surged significantly, especially with a notable increase in short positions, resembling a microcosm of the Wall Street battle of GME's retail investors. However, this time, the retail investors' opponents could continue to mint additional chips.

From April 26 to April 29, these days were relatively calm, with the price fluctuating around $0.2 to $0.34. On April 29, Binance announced another increase in the rate cap to ±4%. Theoretically, such a high rate would severely impact short positions. If the rate remains at -4%, the bears will face a 96% "cost of ruin" after holding a short position for 24 hours. However, miraculously, the price plummeted from $0.27 to $0.067.

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

Community Discussion

Can the "Buying Shell" Strategy Guarantee Breakeven?

After the first surge of ALPACA, Heyi, the co-founder of Binance, replied to a netizen asking, "Can the teacher who buys the shell guarantee breakeven?" This has also triggered endless speculation among community members.

KOL Tunbtc believes that Heyi's reply to this matter was the starting point of ALPACA's surge. "The large holders of Alpaca's native token, by transferring spot chips, operating rights, and distribution rights, have pledged allegiance to Binance's deep-water core interest circle, allowing it to fully harvest market liquidity before delisting, slaughtering opposing positions." Through a triple path of fees, contract liquidations, and spot volatility, they converted user attention into profits.

He also called on Binance to thoroughly investigate this matter, clarify which market maker is manipulating the candlestick patterns, as ALPACA saw an 18x surge within 24 hours with users liquidated of tens of millions of dollars, while previously GPS's 500% surge was promptly halted, and expressed his sentiment: "All of this is thought-provoking."

Wenze, the founder of Beta Capital, believes that bypassing the regular listing process, buying shells, renaming, and restarting has crossed Binance's bottom line of maintaining listing credibility and brand compliance. Binance sometimes has a high tolerance for market fluctuations, and the OM issuance only adjusts the collateralization ratio, with many projects only allowed for leveraged trading. However, once the project, such as these "shell projects," is identified, it is easily labeled for observation, triggering a vote for delisting, ultimately leading to delisting rather than using mild measures.

The Mastermind Behind the Scenes

Renowned KOL Rui, "YeruiZhang," likened the ALPACA incident to "crazy revenge on an ex" and shared a piece of insider information, claiming that the original whale behind ALPACA was a team that controlled BSC's MEV for a period of time and expressed dissatisfaction with Binance's current management for some reason. The comments section is rampant with speculation that it is BSC's whale 48CLUB, and 48CLUB's Ian even personally appeared to eat "his own melon."

The "Delisting Concept"

With the recent buzz around VOXEL's surge and the wealth effect and discussion surrounding ALPACA, more and more "delisting concepts" have emerged. This concept does not necessarily refer to tokens that have already been delisted but rather shares some common characteristics of delisted tokens.

Famous KOL Chuanmo recently shared on Twitter his logic for choosing concept tokens and listed several tokens, all of which experienced varying degrees of price increase after his recommendation.

His "Concept Delisting" strategy involves selecting low-cap tokens from Bybit and Binance, arranging them by market cap from lowest to highest, with almost 100% price increase for the tokens with the highest holdings/circulating market cap. He buys three tokens daily following this order with a fixed amount, and based on the holdings/circulating supply ratio, he removes tokens that no longer meet the criteria daily and continues to buy the new top three tokens.

Many community members have tested this strategy, with some creating helpful tools. The dreamer Disney "discountifu" has created a dashboard, and Vivek10 early bird "vivekw_eth" has developed a monitoring and alert system that can be directly pushed to WeChat with a copyable link, although it is currently deployed locally and not yet entirely stable.

However, when using tools created for free by community members, please be cautious. While there are many enthusiastic contributors in the community, there are also many uncertain factors in this dark forest.

In an increasingly insular market, retail investors not only have to contend with whales and other retail investors but also must bear many unstable elements. The recent ALPACA incident serves as a warning to us. Whether it's a primary or secondary listing on a top-tier exchange or the "Concept Delisting" approach, we need to make rational asset allocations amidst FOMO to protect our principal and reach the other shore.

The mention of all tokens above does not constitute financial investment advice "NFA".

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