Junior high school chemistry mentions that to make blown bubbles more stable and longer-lasting, polyvinylpyrrolidone (PVP) is added to the solvent. PVP is a thickener and foam stabilizer that provides structure and durability to the foam, enabling it to maintain its shape and resist external pressure.
Article by: @agintender
Article source: Wu Blockchain
Junior high school chemistry mentions that to make blown bubbles more stable and longer-lasting, polyvinylpyrrolidone (PVP) is added to the solvent. PVP is a thickener and foam stabilizer that provides structure and durability to the foam, enabling it to maintain its shape and resist external pressure.
To maintain Perpdex's sustainable liquidity and defensible market share, we do not rely on passive farming, shill, or volume manipulation, but rather on proactively creating an extremely competitive psychological environment.
Through a carefully designed mechanism that pits traders against each other, the protocol's mechanism should be designed to stimulate humanity's most powerful intrinsic drive—greed and discontent—to create a self-sustaining flywheel of trading activity, thereby freeing itself from excessive reliance on inflationary token releases and ultimately achieving true market stability.
I. The Great Game: Deconstructing the Zero-Sum Reality of Transactions
The essence of trading is a zero-sum game; it's either you lose or I win. There's no need to hide it or gloss over the truth.
Meme: The most original PvP arena
Meme's trading ecosystem is the purest and most unadulterated embodiment of PvP principles. Unlike assets that claim potential utility or cash flow, Meme's value comes almost entirely from its cultural relevance, community hype, and viral spread on social media—attention itself. In such a market, trading is more like "cultural arbitrage": predicting or being ahead of the market in discovering the next hot topic. This makes the Meme market a naked zero-sum game: one trader's profit directly stems from another trader's loss. On low-fee, high-throughput public chains like Solana, this PvP environment is pushed to the extreme. Trading bots are rampant, median holding times are measured in seconds, and the market has evolved into a "super PvP" ecosystem where it's almost impossible for new retail traders to achieve substantial profits. This brutal environment precisely reveals the essence of the speculative market—it's not a collaborative community, but an arena where participants cannibalize each other.
Since it's a place where people devour each other, it seems a bit superfluous to claim that one is a bodhisattva descended to earth to illuminate the world.
The illusion of positive growth
The mainstream narrative in the cryptocurrency industry often emphasizes its "positive-sum" aspect: ever-growing total market capitalization, new applications driven by technological innovation, and a continuous influx of new users. This macro narrative is real and important, but it's fundamentally disconnected from the micro level—the daily experience of traders on Perpdex. For a user engaging in high-frequency trading on Perpdex, the goal isn't to "build a completely new financial system," but rather to extract capital from other market participants amidst price fluctuations. Their profit and loss (P&L) interface reveals a brutal zero-sum reality. Any successful PvP protocol must build upon this fundamental understanding, ceasing to package itself as a universally beneficial "public utility" and embracing its true identity as an "arena." The protocol's positioning should shift from "trading market" to "beating other traders," a repositioning that aligns its product characteristics with the user's genuine motivations.
Lever: The Great Amplifier
High leverage is a core feature of Perpdex, acting as both a catalyst and amplifier in PvP dynamics. Leverage not only amplifies financial gains and losses, but more importantly, it dramatically amplifies the emotional intensity of PvP conflicts. The euphoria of a single profit and the devastating impact of a single loss are disproportionately magnified. This amplification of emotions is crucial for "hooking" traders into the psychological cycle we will discuss in the next chapter.
Traditional incentive models assume that trading volume is a function of liquidity and incentives, and that trading volume is a function of conflict. By designing mechanisms that can create continuous and quantifiable conflict (such as leaderboards or tournaments), protocols can generate a stable underlying trading volume driven by intrinsic competition without relying on direct token rewards.
II. The Dogma of Participation: Weaponizing Greed and Resentment
The core of PVP is to draw out two of the human heart's desires—greed and discontent.
The Winner's Curse: Cultivating Greed and Overconfidence
For winning traders, the platform's goal is to systematically cultivate their greed and overconfidence, prompting them to trade bolder, more frequently, and more recklessly.
Psychological Mechanisms: Successful trading triggers a series of cognitive biases. First is the overconfidence bias, where traders tend to attribute success to their superior skills rather than luck, thus underestimating the risks of future trades. Second is the confirmation bias, where they actively seek information that confirms the effectiveness of their "winning strategy," ignoring contradictory evidence. This psychological state is known in trading psychology as the "winner's curse," meaning that the largest profit often foreshadows the largest loss. From a neuroscience perspective, profits stimulate the brain to release dopamine, forming a powerful reward circuit that reinforces trading behavior and encourages traders to take on greater risks for stronger stimulation.
Taking some mainstream CEX/protocols as examples:
Platform amplification strategy: The protocol should be designed to amplify the thrill of victory and transform it into a public symbol of social status.
Prominent Profit/Loss Display: High floating profit/loss (PNL) is displayed in the most prominent position on the interface, using positive colors such as green.
Achievement System: Establish "Winning Streak" badges, "100x Profit" medals, etc., to transform trading achievements into a virtual identity that can be shown off.
Public leaderboards: Real-time updated leaderboards are a core tool for creating social pressure, turning individual profit into an open competition.
Social sharing feature: Share screenshots of profits to social media with one click, turning winners into "walking billboards" for the platform, while instilling FOMO, envy, and anxiety in other users.
The loser's game: creating "unwillingness to accept defeat"
For losing traders, the platform's goal is not to prevent them from rationally exiting due to losses, but to stimulate their "unwillingness to accept defeat," prompting them to immediately engage in the next trade to "recover their losses." This is the more powerful and crucial link in the entire psychological cycle.
Psychological Mechanism: At its core is the theory of loss aversion, where the psychological pain of a loss is twice that of the pleasure derived from an equivalent amount of gain. This intense negative emotion leads to a series of irrational behaviors, such as stubbornly holding onto a continuously declining position to avoid acknowledging a loss (the sunk cost fallacy), or, more importantly, revenge trading. Revenge trading is an impulsive, high-risk trade undertaken after suffering a significant loss, driven by anger, frustration, and a sense of "unwillingness to accept defeat," with the sole purpose of quickly recouping the loss. This feeling of "unwillingness to accept defeat" is the key engine that retains losing users and motivates them to continue contributing trading volume.
Taking some mainstream CEX/protocols as examples:
Platform amplification strategy: Every detail of the interface should be designed to maximize the user's "dissatisfaction" and prevent them from conducting a calm review and risk assessment.
Visualizing "Almost": When a user is forced to liquidate their position, the interface can show how "close" the price is to their stop-loss or profit target, suggesting that it was just bad luck rather than a strategy mistake.
Loss framing effect: Describing losses as temporary "paper losses" or "corrections" rather than permanent capital losses, and immediately pushing new "market opportunities".
Instant re-entry incentives: After a user closes their position or is liquidated, a prompt such as "One-click reverse opening" or "Claim transaction fee discount coupon to trade again" immediately pops up, shortening the decision time from loss to the next trade and using the emotional window to encourage impulsive trading.
From an operational perspective, the most valuable users are not the "smart money" that consistently profits and withdraws funds regularly. On the contrary, the ideal users are traders trapped in a cycle of profit and loss. Regardless of their net profit or loss, they continuously generate significant trading volume and fees. Protocol revenue maximization stems from the intense fluctuations of capital between winners and losers.
Therefore, every element of the platform design—from the color of the profit and loss figures to the animation after a trade, to the default leverage ratio and social functions—is no longer just an aesthetic choice, but a tool used to manipulate traders' psychology and guide them toward the two high-volume trading behavior patterns of greed and "unwillingness to give up."
III. Liquidity Spiral: From Psychological Cycle to Protocol Flywheel
Once a protocol has captured a sufficient number of traders through carefully designed psychological mechanisms, it can initiate a self-reinforcing positive cycle known as the "liquidity spiral." This process transforms individual irrational behavior into a sustainable, structural competitive advantage at the protocol level.
Phase One: The Core Engine Composed of "Hooked" Traders
The starting point of this spiral is precisely the core user group, as detailed earlier, driven by greed and a sense of dissatisfaction. These winners and losers are locked into a continuous trading cycle. Their trading behavior is, in a sense, "organic" because it is driven more by intrinsic psychological needs (the pursuit of pleasure, the recovery of losses, and the need to prove oneself) than by extrinsic token incentives. This core group creates a stable and predictable base of trading volume and fee revenue for the protocol. This is the first step in the protocol's move away from its dependence on speculative capital/"mercenary capital."
Phase Two: Attracting Mature Liquidity Providers
With a stable and substantial base trading volume, the protocol becomes highly attractive to second-tier market participants—professional liquidity providers. Market makers are drawn in because they can consistently profit from the bid-ask spread generated by the frequent trades of core traders. Arbitrageurs are attracted by price volatility; their activity helps the protocol's price align with the broader market, thus improving market efficiency. This injection of professional liquidity significantly thickens the order book and reduces slippage, thereby improving the trading experience for all users. This makes the platform more attractive to new users, further solidifying its core engine.
Phase Three: The Return of "Mercenary Capital" and the Formation of a Liquidity Black Hole
As the protocol establishes a deep, active, and efficient market through the first two phases, an interesting reversal occurs. The "mercenary capital" that the protocol initially tried to shun now returns. But this time, they are not drawn by the protocol's airdropped tokens, but by the superior trading conditions (extremely low slippage, massive trading depth, and abundant arbitrage opportunities). Their arrival completes the final piece of the liquidity spiral. The influx of massive capital transforms the protocol into a "liquidity black hole"—a market with such immense gravitational pull that competitors find it difficult to challenge its dominance. At this point, the protocol's competitive moat has shifted from short-lived incentives to an insurmountable structural barrier comprised of network effects and deep liquidity.
The core of this process lies in the fact that PVP is a strategy that uses artificially designed mechanisms (gamified incentives, psychological cues) to create a state that appears and feels like an "organic product-market fit." Traditional liquidity mining, such as SushiSwap's vampire attacks and AsterDex's volume manipulation, solved the "cold start" problem of liquidity but failed to solve the "loyalty" problem of users. Users attracted by incentives have extremely low retention rates. PVP mechanisms and models aim to fundamentally solve the retention problem by replacing economic "incentives" with a behavioral "addiction" (as described in the psychological mechanisms of gambling addiction). An addicted user doesn't need you to pay them to play.
Therefore, most protocols prioritize acquiring liquidity, while the PVP model redefines it as an outcome. The primary goal is to maximize user engagement and trading volume through psychological mechanisms. Deep, stable liquidity is simply a natural byproduct of achieving this primary goal. In a context of fierce competition among exchanges for liquidity, the PVP model offers a more capital-efficient path: by investing resources in product features that create a competitive environment, liquidity will naturally follow trading activity.
IV. Catalyst: Designed for "single-point breakthrough"
To ignite a powerful PvP flywheel, a precise and potent catalyst is needed. This requires protocols to abandon the "universal" incentive model and shift to a "single-point breakthrough" strategy that can generate conflict, filter winners, and motivate losers.
Widespread liquidity mining or trading rebates are the "all-encompassing" platform strategies criticized by users. This strategy is inefficient because it indiscriminately rewards everyone, including "zombie users" who passively provide liquidity and trade infrequently, as well as those who farm for points. This not only dilutes the incentive effect on high-value, highly active traders but also creates enormous token inflationary pressure, ultimately leading to mercenary capital rapidly exiting the market after rewards decay.
An effective "single-point breakthrough" incentive model should be based on relative performance rather than absolute participation. The core principle is to reward those traders who win in PvP competition, not all those who participate in trading.
A successful PvP incentive program must, by its very design, create a large number of "losers" who gain nothing. This contradicts the "inclusivity" and "community sharing" spirit typically promoted in the Web3 space, but it is crucial to the model's success. It is precisely the intense "unwillingness" felt by these losers who "missed out" on the grand prize that constitutes the core motivation for them to continue participating in platform transactions in the future, even without direct incentives.
We can't expect a platform that operates on a zero-sum game and winner-takes-all mechanism to do "inclusive finance," can we? If you're bound by the moralistic notion of "inclusive finance" or demanded fair treatment by anti-fraud communities, then you might not be suited to enter this cutthroat world.
Conclusion: Sustainable Bubbles
Let's return to our initial chemical analogy. Speculative markets are inherently bubbly; it's a fundamental property. The goal of PVP (Player vs. Player) is not to eliminate bubbles, but to stabilize them. Just as polyvinylpyrrolidone (PVP) provides structure, resilience, and durability to bubbles, a well-designed "player versus player" system can also provide a sustainable structure to the market's frenzied activity. It creates stability in trading activity and fee revenue amidst dramatic price fluctuations.
The ultimate strategic advice is that in the future competition among Perpdex protocols, the victor will not be the one offering the highest APY, but rather the one that most deeply understands and masters user psychology. Success will no longer be solely the work of financial architects, but rather the masterpiece of behavioral psychology architects.
Turn PVP into a doctrine—like the Chaoshan people, bring the arena to your own backyard; without guidance, the water will naturally flow to every value-laden area.
