Binance Alpha Bull Market: A One-sided Game led by Market Makers

In a market environment where liquidity in the interest rate cycle is not sufficient, Binance Alpha’s bull market is still happening: an unknown project can often silently increase several times in a short period of time.

This article will talk about the market making strategy of the first Alpha + Prep from the perspective of the market maker, as well as mm’s inner monologue, and achieve “dance with Zhuang”.

Binance Alpha is equivalent to a natural liquidity pool. It can concentrate huge attention and retail resources on the day of its initial public offering, and it will also attract a group of native Alpha users to participate in the transaction – they may choose to smash the market or buy, and every “Alpha worker” is betting from their own perspective.

But if we switch to the perspective of project parties and market makers, our inner thoughts are actually more direct: I have paid 1-2% of the chip cost, launched Alpha, and opened Prep at an additional cost. After paying so many “protection fees”, the probability of subsequent abandonment is relatively low.

So we see the subsequent “Alpha on-chain bull market”.In fact, it is difficult to complete large-scale distribution with the Alpha spot market alone.Bankers and market makers must use Prep to attract more retail investors by continuously improving OI, turning this transaction into a “casino”.

Today’s project logic is different from the “narrative-driven” of the past, but has completely transformed into capital-driven: whoever has thicker chips can pull out a stronger market; as long as there are enough gamblers entering the market, market makers can continue to create fluctuations and make profits from it.

Summary as follows

Alpha→ Provide a natural attention pool and first-time user base;

Prep →It is the core tool for dealers/market makers to increase OI and attract traffic.

For market makers, the key logic of the first-time launch day is:

Alpha→ Absorb funds + build positions;

Prep→ Pull the plate + Distribute.

Taking the first-time new currency as an example, let’s see how market makers make profits through Alpha+Prep

The Alpha launch time is 8:00 (UTC), and the Prep launch time is 10:30, and there are only two and a half hours left for market makers to receive goods.This period of time is actually the stage when market makers and retail investors compete for chips. Active mm will bite the bullet and receive the goods. If this part of the chips are snatched away by a large number of free-rider retail investors, the subsequent market makers’ pull-up costs will increase.

(From the market situation, the main market maker on Alpha is mainly active MM. According to the industry’s general speculation, its capital allocation scale is usually in the range of millions of dollars, while the liquidity supply on the spot side is relatively sufficient.)

After Prep is launched,The Market Maker Chamber of Commerce attracts more retail investors to enter the market by pushing up OI (open position), turning this game into a “momentier gambling table as you sit.”The core role of Prep is not just to provide hedging tools, but to amplify market attention and trading participation.

At the same time, market makers often cooperate with relevant KOLs to launch some good news or marketing PRs from the Institute to further create topics and popularity and attract more attention.Whether it is long or short, it is essentially contributing liquidity to the market, which also provides market makers with greater trading space and a more abundant source of profit.

As shown in the figure, the OI was quickly pushed up after Prep went online and remained stable at a high level.In the early stages, dealers usually do not choose to complete shipments by significantly pulling up or violently smashing the market. The reason is: if the market is smashed too early, the chips may not be able to be taken back at the same or even lower cost, which will increase their overall cost of pulling the market.The core goal of the dealer is to hand over the chips to retail investors as much as possible at a high level to ensure that the distribution is completed smoothly.

During the process of pulling up, the capital rate often provides a key reference.By observing the changes in capital rates, the dealer can judge whether the market sentiment is overheated and optimize the details based on this.For example, when the capital rate soars abnormally, market makers can use futures and spot hedging or short-term capital rate arbitrage to reduce holding costs and further increase overall returns.

All spots are in the hands of market makers. As long as market makers do not smash the market, through the capital rate market, during the 9/12-9/15th period, OI continues to increase, and capital rate soars many times.

Peak:0.3–0.4% / 4h(Convert annualized settlement270%–360%);

Mean:0.1–0.2% / 4h(Convert annualized settlement90%–180%).

This means that market makers can establish short orders in the contract market, and while receiving goods in the spot market, they can continue to earn capital rates and form stable arbitrage cash flow, as an important means to optimize costs.

On 9/16, when the OI remained high and the long positions were heavily backlogged, the dealer chose to smash the market significantly, and the spot distribution was at the same time, the short orders made profits:

Price from0.058 → 0.035, the decline is about40%;

Banker cost range0.015–0.02, the average shipment price is about0.045–0.05;

A single profit margin is about+150%–200%.

(Ideally, there isProfits from on-chain liquidity poolsNot included in the overall calculation.The specific strategies of different market makers are not very similar.)

Some key points of dancing with Zhuang

1. In the early stage, if you see that the project has a high control over the disk and community FUD, it is often worth paying more attention; while Grand Slam projects are more difficult to deduce clearly because of the complex bargaining structure, and you need to participate carefully.

2. If Alpha+Prep can be launched at the same time on the first day, it usually means sufficient liquidity and price fluctuations will be more severe.

3. Trying to calculate the profitability of the dealer in each wave of pull-up and pullback will help you understand its trading logic.

4. When opening the Alpha, you can pay attention to the pricing of Pancake V3. If the opening price is too high, it may be safer to wait for a more appropriate rhythm.

Conclusion

The starting model of Alpha+Prep is reshaping the current market structure.On the surface, this is a narrative-driven bull market for new coin, but in fact, it is more like a structured game directed by market makers.Alpha provides chip precipitation and initial flow, Prep amplifies liquidity and volatility, while OI and capital rates have become key tools for dealers to trade.Retail investors may be able to capture short-term opportunities, but more importantly, they need to understand the logic behind this: how far the market can go does not depend on how moving the story is, but on how thick the capital is and how accurate the pace is.