Binance Releases Important Risk Warning and User Safety Education on Binance Alpha

Binance issued an important risk warning about Binance Alpha, stating that it has recently noticed some suspicious activities aimed at profiting from users who provide liquidity to DEX. 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 incentives. These mechanisms can simulate a positive market environment and active trading, but often mask significant structural risks and potential sudden price reversals.
For the reasons above, users are strongly advised to pay attention to the following: 1. For Liquidity Pool (LP) Providers: Before adding liquidity, carefully evaluate the project's market cap, fully diluted valuation (FDV), and price volatility. Choose your liquidity range appropriately, as providing liquidity carries risks including impermanent loss. Be especially wary of abnormally high LP yields in low liquidity environments. 2. For Traders: Before trading, understand the liquidity and holder distribution of tokens. Be highly wary of tokens that show high concentration of holdings or sudden and unexplained price increases. Pay attention to liquidity changes, token distribution, and trading patterns. Stay informed and make decisions based on research rather than hype. 3. Risk Warning Banner: For projects with higher risks, Binance will display a risk warning banner on the token trading page (for example: $BR, KOGE, QUQ). Please pay attention to such risk warnings before trading. [PANews]