"Binance Alpha's play with points has gone awry" @cz_binance @heyibinance Are your actuaries treating retail investors like Japanese people? 👊🏻 Binance Alpha attracted countless newcomers and studios in just two months by offering points for daily trading, with more points leading to more airdrops. But today, Binance delivered a heavy blow to the retail investors' dream of guaranteed returns. The introduction of point consumption has turned points from "positive incentives" into "negative pressure." "The more I trade → the more I earn" has become "If I don't trade → I get deducted → I have to keep trading → but trading doesn't earn" 1. Points Calculation 1. Daily Points ⬩ Balance Points: $1000 → 2 points ⬩ Trading Volume Points: Trading volume $4096 → 12 points ⬩ 15-day Accumulation: 14 points/day × 15 days = 210 points 2. Airdrops and Deductions ⬩ Current $RDAC Airdrop Threshold: 205 points, worth $36 ⬩ Deduct 15 points after receiving airdrop: 210 - 15 = 195 points. ⬩ Next Day Points: Add 14 points, the oldest 14 points expire, still 195 points. Without increasing trading volume, points will remain at 195 long-term 3. Next Airdrop Threshold ⬩ If the threshold remains 205 points, 195 points are insufficient, need to add 10 points (trade 0.67 points more daily, add 10 points in 15 days) ⬩ If the threshold rises to 220 points, need to add 25 points (trade 1.67 points more daily, add 25 points in 15 days) 2. Cost and Benefit Analysis 1. Cost of Trading Points ⬩ Trading $4096 volume cost: $4/day ⬩ 15-day total cost: $4 × 15 = $60 ⬩ Cost of Adding Points (example of adding 10 points): ⬩ $4096 earns 12 points, 1 point requires about $341.33 trading volume (4096 ÷ 12) ⬩ Trade 0.67 points more daily, need $228.69 trading (341.33 × 0.67), cost about $0.22 (proportionally 4 ÷ 4096 × 228.69) ⬩ 15-day additional cost for 10 points: $0.22 × 15 = $3.3 ⬩ Total cost: 60 + 3.3 = $63.3 2. Net Profit ⬩ $RDAC Airdrop Value: $36 ⬩ Net Profit: $36 - $63.3 = -$27.3 (loss) 3. Long-term Impact ⬩ Points remain at 195, if the threshold continues to rise (e.g., 220 points), need to trade 1.67 points more daily, trading volume increases to $568.82 (341.33 × 1.67), cost increases to $0.56/day, 15-day additional cost $8.4, total cost $68.4, net profit 36 - 68.4 = -$32.4, greater loss 3. Fatal Issues of Point Consumption Mechanism ⬩ Vicious Cycle of Double Consumption: ⬩ Add 14 points daily, the oldest 14 points expire, points can only be maintained (195 points). After deducting 15 points, cannot naturally recover, need extra trading ⬩ High Marginal Cost of Adding Points: Adding 1 point requires $341.33 trading volume, cost about $0.33. As the threshold rises, the cost increase becomes more apparent ⬩ Cost-effectiveness Collapse: ⬩ Airdrop value $36, far below the cost of trading points ($63.3 starting). Even with multiple airdrops, the deduction mechanism causes points to continuously decrease, requiring increased trading volume, costs rise indefinitely ⬩ Retail Investors' Expectations Shattered: 15-day loss of $27.3, far below expected returns, losing motivation to participate ⬩ End of Bonuses: ⬩ Point consumption mechanism essentially "prices" points: 15 points worth $36 (each point $2.4), but adding 15 points costs about $115 (341.33 × 15 ÷ 4096 × 4), each point costs about $7.67, value and cost inverted ⬩ Must maintain threshold (195 points) to receive airdrop, airdrop value diluted The Binance Alpha points system was originally an experiment combining user engagement and ecosystem incentives, aiming to identify "value users" genuinely willing to participate in new projects through trading volume, balance, and other behaviors. From the design perspective, it was not meaningless. However, from the current operational results, issues such as complex mechanisms, mismatched returns, and rapidly rising marginal costs are destroying users' willingness to participate. Especially after the introduction of the "deduction mechanism," points have turned from "accumulable assets" into "continuously consumed resources," trapping users in a negative cycle of constant input but diminishing returns. The success of an incentive mechanism does not depend on how many participants there are initially, but on whether they are willing to stay long-term. Alpha points may not be a failure, but at present, it has indeed reached a critical point that requires reflection and correction.