ZKJ and KOGE flash crash: carefully planned on-chain play people for suckers, whose fault is it?

ZKJ and KOGE were both manipulated into a big dump, causing a large number of retail investors on the Binance Alpha platform to wake up from their dreams of wash trading. Originally, they hoped to earn some Airdrop "Interest" by increasing their trading volume, but in the end, they lost even their principal. What is really going on behind this? Who should take responsibility for this disaster?

Written by: Haotian

$ZKJ and $KOGE were both manipulated and experienced a big dump, waking a large number of retail investors who were washing trading volume on the Binance Alpha platform from their dreams. Originally, they were just trying to wash a bit of trading volume to earn some Airdrop "Interest," but in the end, they lost even their principal. What is really going on behind this? Who should take responsibility for this disaster? I will try to analyze this in depth:

1. Let's first discuss what's going on? Binance launched the Alpha platform for wash trading to promote an Airdrop event. ZKJ and KOGE, as popular projects, were listed on Alpha, and a large number of retail investors started frantically increasing their volume in anticipation of the Airdrop.

However, just when the alpha activity was in full swing and retail funds were pouring in, a large investor withdrew about $3.6 million in tokens from OKX and smashed it directly in the market. ZKJ crashed first, and due to the high correlation of the Koge pool, KOGE passively followed the decline, and retail investors began to panic sell when they saw the crash, further accelerating the crash cycle. In the end, those users who were "diligent" in Binance Alpha and other airdrops not only did not wait for the gains, but even lost their principal.

2. Who should pay the price during this "malicious act"?

The project team might say: We didn't let the big players dump the market, this is market behavior, but it is simply unbelievable that a large project with a TGE valuation of 2B can be manipulated by individual large players.

The big players who crash the market can say: My money, I can handle it freely, losing money is deserved, but to take action at such a precise moment knowing it will cause a chain collapse, what is the intention behind it?

The Binance Alpha platform can also be said that we only provide a trading platform, and users bear the risks themselves. However, without the endorsement of the Binance platform, how can users dare to invest huge amounts of money? Now that something has happened, how can they possibly wash their hands of it?

You see, the stakeholders on this chain seem to have reasons to distance themselves, leaving only the retail investors confused: Why has this hot Alpha Summer ended before it even began? Where is my principal?

3. So where exactly is the problem? In my opinion, what seems on the surface to be an accidental market risk is actually a premeditated systematic harvesting:

The project party "designed" a correlation trap, the big players chose to strike at the "timing", Binance provided a "legal" harvesting platform, and the retail investors bore all the losses.

Specifically:

Binance Alpha made strategic missteps under competitive anxiety. As OKX expanded its territory in the Web3 DEX and wallet space, its on-chain trading share was being eroded, causing urgency. Alpha was originally designed quite well—providing a testing period for projects, an observation period for users, and a risk control period for itself.

However, Binance has clearly overestimated its risk control capabilities and underestimated the "malice" of market participants. In order to quickly regain market share, it forcefully transformed Alpha from an "observation deck" into a "main battleground." In other words, Alpha was not originally intended to create a better Binance, but to build a new on-chain "Binance"?

What’s worse is that Binance was overly idealistic about the market environment when designing the Alpha mechanism. The "win-win-win" model envisioned by Binance sounds beautiful: project parties test the market through Alpha, users engage in wash trading to gain profits, and the platform earns transaction fees? This logic sounds great, but it is built on a fatal assumption—everyone will "perform according to the script." What’s the reality? In this fragile liquidity of small coin markets, any artificially created hype is a false prosperity, which can be shattered with a poke.

Binance seems to have forgotten that the Alpha platform, while providing convenience, also creates a perfect "hunting ground" for malicious operators—after all, with Binance's endorsement increasing credibility, an incentive mechanism gathering retail investor funds, and sufficient liquidity available for harvesting, everything is in place.

With this set of combination moves, Alpha - originally an observation area used for "risk isolation" - has become a breeding ground for big players to "precisely harvest."

Ultimately, the entire event exposed the structural flaws of the current market ecology, where each participant is pursuing the maximization of short-term benefits: project parties want to quickly cash out liquidity, large holders want to precisely arbitrage, trading platforms want to increase volume and revenue, and retail investors always want to seize excess returns. Everyone is calculating their own small profits, which ultimately led to a "perfect" defeat in the bullish game.

But after all, this incident happened on the Binance platform, the largest exchange in the world, which should have been the "stabilizing force" for the entire industry, but instead became the main stage for this harvesting drama.

Binance's Alpha strategy this time essentially guarantees the harvesting behavior of others with its own brand credibility. Wanting market share, wanting volume, wanting fee income, the result is that it has shot itself in the foot.

Alas, it's a pity. If the "top players" behave like this without anyone taking responsibility for maintaining order, when will we truly welcome the maturity of the industry? The answer is probably further away than we imagine.