On April 24, Binance announced the delisting of four tokens, including Alpaca Finance ($ALPACA), on May 2, and will delist the perpetual contract trading for these trading pairs at 0:00 Beijing time on May 1, 2025. After nearly a week, on the last day of delisting perpetual contract trading, ALPACA topped the liquidation heat map, with $52.21 million evaporating in ALPACA's contract trading over the past 24 hours, which is more than the total contract liquidation volume of the token in the past nearly two years.
In the past, many traders would buy a Token on Binance immediately after its listing, following the "Buy the News" strategy. As Binance's listing effect gradually weakened, traders found another path: shorting tokens that Binance is about to delist, or "Sell the News". This strategy often had a high success rate, until traders encountered this alpaca, ALPACA.
ALPACA's Path of Long and Short Massacre
Every thrilling market game requires careful preparation. Before Binance's official announcement, $ALPACA ranked 7th in the second batch of "voting for delisting" on April 10, and its price had been falling, nearly halving. In the five days before Binance's official announcement, from April 19 to April 23, trading suddenly surged.
The story should be traced back to when Binance started the second batch of "voting for delisting", and ALPACA entered the delisting candidate list, ranking 7th among 17 projects. After Binance completed the voting and delisting statistics, $ALPACA was listed as a project to be delisted. The market did not react significantly, and the price had not fluctuated dramatically, but the trading volume expanded abnormally, with the community suspecting the entry of "controlling funds".
On April 24, Binance officially announced the delisting of $ALPACA spot trading pairs on May 2 and contract trading settlement on April 30. Upon the news, $ALPACA's spot price dropped from $0.0329 to $0.029, with a market value of only around $5 million. What followed was two "roller coaster" rides, rising from $0.029 to $0.0857 within an hour, an increase of about 195%, then quickly falling back to $0.04 and fluctuating within 3 hours. Shorts were caught off guard, and the open interest (OI) quickly rose, initiating the "long and short meat grinder" mode.
On April 25, Alpaca Finance officially stated that the trading volume in the past 24 hours exceeded 1 billion, and market makers suggested "increasing issuance to stabilize liquidity", which would be returned to the treasury after the trading volume decreases. However, as public opinion began to ferment and opposing voices filled the community, Alpaca Finance deleted the previous tweet and issued a new tweet that evening, announcing the cancellation of increased issuance due to community opposition.
On April 26, Binance modified the contract funding rate rules, shortening the capped rate settlement period to once per hour, with a maximum of ±2%. Some high-leverage accounts continuing to short under extremely high rates were liquidated, with millions of dollars disappearing within hours. $13 million in short positions vanished on this token with a market value of less than $30 million within 24 hours.
The layout had now fully entered the high point of the short squeeze, with the price surging nearly 12-fold from the lowest point of $0.029 to $0.3477 within 3 days. Contract positions rose significantly, especially with a notable increase in short positions, reminiscent of a miniature Wall Street battle with retail investors, only this time the opponents had chips that could continue to be issued.
From April 26 to April 29, things were relatively calm, with the coin price fluctuating around $0.2 to $0.34. On April 29, Binance again issued an announcement raising the rate cap to ±4%. Theoretically, shorts would be severely hit, and if the rate remained at -4%, shorts would bear 96% of the "sunk cost" in 24 hours. Surprisingly, the coin price instead plummeted from $0.27 to $0.067.
On April 30, with 24 hours left before contract settlement, the price continued to fluctuate dramatically. ALPACA's attention reached its peak, with the highest coin price momentarily reaching $1.2. From a week before the delisting announcement to the eve of contract delisting, ALPACA's coin price grew 40-fold, creating an independent market for Binance's delisted token. Simultaneously, the total network liquidation amount reached $50 million, with $42 million of "short fuel" underneath the price surge.
Community Discussion
Shell Buying Teacher Making a Comeback?
After ALPACA's first surge, Binance's co-founder Heyi replied to netizens, "Shell buying teacher making a comeback?" This sparked endless speculation among community members.
KOL Tunbtc believed that Heyi's response was the starting point of ALPACA's surge, "The token's major holders transferred spot chips, trading rights, and distribution rights, pledging allegiance to Binance's core deep interest circle, allowing them to harvest market liquidity and massacre the opposing side before delisting." They monetized user attention into profits through three paths: transaction fees, contract liquidations, and spot fluctuations.
He called for Binance to thoroughly investigate the matter, to clarify which market maker was manipulating the K-line. ALPACA was tacitly allowed to surge 18-fold in 24 hours, with users liquidated for millions of dollars, while previous GPS rises of 500% were urgently stopped, remarking that "all of this is intriguing".
Beta Capital's founder Wenze believed that bypassing the regular listing process and buying shells to rename and restart touched Binance's bottom line of maintaining listing credibility and brand compliance. Binance sometimes has high market volatility tolerance, with OM's increased issuance only lowering collateral rates, and many projects' market-making being limited to leverage. However, once such "shell projects" are discovered, they are easily labeled for observation and ultimately delisted rather than handled with mild measures.
Behind the Manipulators
Famous KOL Rui "YeruiZhang" compared the ALPACA event to a "crazy revenge on an ex" and shared a rumor, claiming that ALPACA's initial manipulators were a team that controlled BSC MEV for a period of time and were dissatisfied with Binance's current management for some reason. The comment section speculated it was 48CLUB, a major BSC player, and Ian from 48CLUB even personally showed up to "watch the drama".
"Delisting Concept"
With the recent VOXEL's surge and ALPACA's wealth effect and discussion, more "delisting concepts" have emerged, which may not be tokens already confirmed for delisting, but share some common characteristics of delisted tokens.
Famous KOL Chuan Mo recently shared on Twitter his logic for selecting such concept tokens, listing several tokens that rose to different degrees after his post.
His strategy for "delisting concepts" is to select small-cap tokens from Bybit and Binance, starting from the lowest market cap, where tokens with the largest position/circulating market cap almost certainly rise. He buys three tokens daily with a fixed amount according to this ranking, removes those not meeting conditions daily, and continuously buys new top three based on position/circulation ratio.
Many community members have tested this strategy and created auxiliary tools. Disney dreamer "discountifu" made a dashboard, while Vivek10 "vivekw_eth" created a monitoring push system that can directly push to WeChat by copying the link, though currently deployed locally and not very stable.
However, be cautious when using community-made tools for free, as even with many passionate contributors, many uncertain factors exist in this dark forest.
In an increasingly competitive market, retail investors must not only compete with manipulators and other retail investors but also bear many unstable factors. The ALPACA incident serves as a warning that whether it's primary or secondary market, listing on top exchanges or "delisting concepts", we must make reasonable asset allocations in FOMO emotions and protect principal to reach the other shore.
All tokens mentioned do not constitute financial investment advice "NFA".
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