ChainCatcher reports that, according to the official announcement, Binance has noticed some suspicious activities aimed at profiting from users providing liquidity to decentralized exchange (DEX) platforms. Common risk signals include abnormally high yields, rapid price fluctuations, or excessive promotion of trading activities and incentives.
A common strategy is to attract users to provide liquidity through trading rebates or similar incentive mechanisms. These mechanisms can simulate a positive market environment and active trading, but often mask significant structural risks and potential sudden price reversals. Based on the above reasons, users are strongly advised to pay attention to the following:
- For Liquidity Pool (LP) providers: Before adding liquidity, carefully evaluate the project's market capitalization, fully diluted valuation (FDV), and price volatility. Reasonably choose the liquidity range, as providing liquidity involves risks including Impermanent Loss. Be particularly wary of abnormally high LP yields in low liquidity environments.
- For traders: Before trading, understand the token's liquidity and holder distribution. Remain highly vigilant of tokens showing highly concentrated positions or sudden price increases without clear reasons. Pay attention to liquidity changes, token distribution, and trading patterns. Stay informed and make decisions based on research rather than hype.
- Risk Warning Banner: For high-risk projects, Binance will display a risk warning banner on the token trading page (for example: BR, KOGE, QUQ). Be sure to pay attention to such risk warnings before trading.
