Crypto users, influencers, and new traders were psyched about using Binance Alpha to unlock benefits, but the $ZKJ and $KOGE tokens experienced dramatic price swings that triggered mass liquidations.
Some traders saw their investment go to waste, while others watched Alpha whales cycle trades between two Alpha tokens with minimal price exposure to farm points.
These victims posted screenshots, angry threads, and questions on social media asking questions about whether the program was ever truly fair, and some critics even said Binance waited too long to act.
Binance raised deeper concerns about its governance, transparency, and commitment to user protection when it tried closing loopholes and reducing system gaming by ruling that trades between Alpha tokens would no longer count toward Alpha Points.
Why wasn’t it built into the system if the rule change was necessary to prevent abuse?
Mass sell-off triggers Binance Alpha meltdown
Large Alpha holders (whales) pulled their liquidity out of the market, creating a shortage of available funds that caused prices to drop quickly and tokens like $ZKJ and $KOGE to crash.
Meanwhile, many traders used borrowed or leveraged money to trade these tokens on the blockchain. So, when prices started falling, it triggered automatic sell orders (liquidations), further pushing prices down in a quick and uncontrollable chain reaction.
Users who invested or farmed points in these tokens began losing money and started selling their holdings or stopping their trading activities altogether, making it even harder for remaining traders to buy or sell tokens without facing large losses.
Reports show that more than 100,000 users have left the Binance Alpha ecosystem in just a short period as they feel burned by the sudden and severe losses.
Binance stops point farming between tokens
Binance introduced a new rule that stops users from earning Alpha Points when they trade one Alpha token for another on June 17.
Before this change, traders could swap tokens like $ZKJ for $KOGE and keep earning points even if they were simply moving money back and forth between these tokens without adding real value to the market.
Some users say the change will stop traders from using clever tricks to game the system because they mislead other traders and the market about the tokens’ popularity and value.
However, some say this new rule is too late and doesn’t deal with the design problems that reward high trading volume or the overwhelming influence of large holders or whales who still control much of the market and can manipulate prices.
The new rule might reduce some of the most obvious abuses like wash trading, but it won’t fully fix the core challenges that have led to the recent crashes and community backlash.
The crypto community criticizes Binance
Many users felt betrayed by the system because the rewards they invested their time, money, and effort into earning were now devalued and made more difficult to earn.
Some users said Binance should give back the points or rewards they lost because the new rules weren’t clearly explained before they made decisions to trade or hold tokens. In contrast, others wanted the company to explain how the new system worked to prevent similar sudden changes in the future.
The backlash showed that many users lost trust in the Alpha brand as they believed the changes were designed to protect big players or the company’s image rather than create a fair and open environment for all users.
Some people even said Binance only made those changes to avoid negative headlines and keep investors happy instead of dealing with the Alpha Points program’s issues with fairness and transparency.
Some crypto community members think other big exchanges will follow Binance’s example and change their to reduce the risks of manipulation and abuse. Others think the platforms will continue with the traditional systems.
Binance can set a new example for the crypto industry by building a fairer, more stable system that works well. However, if users react negatively or the new setup fails to bring in enough people and trading activity, other exchanges might not want to follow its lead.
Binance should approach its community members and consult them for ideas about changing the incentive system because users are likelier to believe that the platform cares about their experience and wants to build a fair system that benefits everyone when they feel heard.
Read the full article here
