Binance has launched Alpha 2.0, which I believe will have a significant impact on Binance and the entire cryptocurrency space, changing the landscape of on-chain trading. Let me share my thoughts on this.
First, let’s briefly discuss the content of Alpha 2.0.
1) Users can directly purchase on-chain tokens on the Binance trading platform without needing to withdraw assets to an external wallet or create an on-chain wallet.
2) Users can use funds from their Binance spot, margin, and other accounts to purchase Alpha tokens.
It is clear that the core point is that users can conveniently and quickly purchase Alpha tokens on the Binance main site without needing to transfer to a wallet, incur any gas fees, or copy contract addresses.
- The number of on-chain trading users will increase by more than 10 times.
You might not believe it, but even though it is already 2025, the proportion of on-chain users is still not large. Have you heard of the concept of a sales funnel? Each step has a certain conversion rate. Similarly, on-chain trading still requires multiple steps. During the popularity of on-chain DeFi in 2020, users needed to download a wallet address, remember private and public keys, withdraw to a wallet, and trade on a DEX. In recent years, the improvement of abstract wallets and exchange Web3 wallets has greatly simplified the process. However, taking Binance Wallet as an example, users still need to create a wallet (which is simpler) and withdraw assets from the exchange.
How many people have been blocked by such operations? Binance has 250 million registered users, while according to Artemis data, the total number of active wallet addresses across all chains is only 16.1 million. If we exclude wallets belonging to the same person across different chains, this number is even lower. Thus, on-chain users account for only about 5% to 10% of exchange users.
Now, with the ability to directly purchase Alpha tokens on Binance, this means that the number of on-chain users will expand by more than 10 times, and purchasing power will also increase by at least 10 times.
- Binance is fully embracing on-chain assets.
It is clear that Binance is fully embracing on-chain assets and finding a way to achieve a dimensionality reduction attack.
Currently, the leading players in on-chain trading are GMGN and OKX wallets, which have accumulated rich experience in on-chain trading and have good user experiences and reputations. In comparison, Binance's Web3 wallet falls short. It may not be that the wallet team is not working hard, but rather that competitors have already taken the lead and are far ahead.
From a business perspective, to defeat WeChat, you don’t just create a "big trust" with a better experience than WeChat; you need to create a Douyin (TikTok). Similarly, if Binance wants to overtake in the on-chain trading space, it needs a completely new approach. I believe Alpha 2.0 has found the right posture, bridging on-chain and off-chain, allowing all users of the exchange to directly purchase on-chain tokens.
- Future changes in the landscape.
1) Alpha 2.0 will trigger changes in the entire on-chain trading landscape.
Of course, this is not bad news for GMGN and OKX wallets; their impact may not be significant. Alpha 2.0 brings incremental users to on-chain trading, just as both Douyin and WeChat can become giants. Moreover, users of GMGN and OKX can trade all on-chain tokens, especially newly launched ones. Alpha is selective, similar to Moonshot, with a limited number of tokens that are carefully chosen.
2) The token issuance strategies of project teams will also change accordingly.
As we all know, the path to listing directly on Binance has always been very crowded. Now, a new path has opened up, which is to list on Binance Alpha. Because Alpha now also reaches all users of Binance, possessing massive potential purchasing power. For project teams with good product quality but lacking strong backing, they can first issue on-chain tokens, build a solid community, and have a high probability of getting listed on Alpha.
In fact, the path from Alpha to the Binance main site is also smooth. Taking Shell and BMT as examples, they first conducted exclusive TGEs on Binance Wallet and held IDOs. Then they listed on Binance Alpha, followed by Binance Contracts and the Binance main site. These two projects should be clear signals from Binance to everyone.
This is a significant benefit for retail investors, as many project teams will first conduct TGEs on-chain, allowing them to buy quality tokens at low prices.
In summary, the impact of Alpha 2.0 is enormous, not only representing a major step for Binance but also holding great significance for on-chain trading and project teams. It is a substantial benefit for us retail investors.
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