Is delisting actually the new listing? 🥹 — A delisting announcement led to a 60-fold surge, with ALPACA contract trading volume reaching $3 billion in 24 hours, and open interest hitting $110 million until the delisting. This farce is finally coming to an end.
A simple timeline recap:
04.24: Binance announced the delisting of four tokens, including $ALPACA, which initially surged 150%, triggering short squeezes.
04.25: Binance shortened the funding rate settlement frequency from 4 hours to 2 hours, and then to 1 hour.
04.26: ALPACA surged again by 175%, triggering more short squeezes.
04.29: Binance upgraded the funding rate to 4% per hour.
04.30: ALPACA reached a new all-time high, topping the list for 4-hour liquidation amounts across the network.
The $ALPACA project team held no tokens, and market makers had only a small amount, which was quickly bought up after the announcement, leaving all tokens in the hands of shell company owners. Originally, this announcement would have rendered the money worthless, as no one would want to buy a delisting token. Even if the price was pumped, it wouldn't attract many uninformed retail investors. However, the market manipulators successfully attracted the short-selling crowd, who had been profiting handsomely recently, with the theory: "Short junk tokens, short delisting tokens, pumping delisting tokens is just giving away money." Guided by this theory, retail investors began to flood in during the third round of price pumping.
Yesterday, ALPACA rose from $0.066 to $1.47, and automatic liquidation became the best tool for market manipulators to reap profits. At this point, it had nothing to do with the underlying asset. As long as you had enough accounts and margin, you could keep raising the contract price and hold on until 5 o'clock, turning all floating profits into real gains without having to sell to close positions. What a perfect harvesting mechanism! Originally intended to remove bad assets from the platform, it ultimately became a retail investor harvesting machine.
The original intention of delisting inferior tokens was to shift liquidity to quality assets. Binance has delisted tokens multiple times before, with good intentions, and there hadn't been any major manipulation incidents. However, this time exposed issues with the delisting mechanism. I have a small, immature suggestion that the team might consider: @heyibinance @yaya_bnb @sisibinance @binancezh @CryptoNataNata
👉 When a delisting announcement is made, if the token has contracts, stop opening new positions at the same time or shortly after. This provides enough time for existing positions to close and prevents market manipulators from exploiting the opportunity for malicious speculation.
One last hot tip: Shorting is a highly risky activity. If you go long with a $5,000 position, the most you can lose is $5,000. But if you short a $5,000 position, a position with a margin of hundreds of thousands of dollars could be wiped out. Use contract tools cautiously. 💡