In the last month, the daily decentralized exchange (DEX) volume on the BNB Chain has shot up, nearly 7x from about $2B in early May to over $14B today. At first glance, this spike looks like a return to better days for DeFi. But if you look under the hood, you find another engine powering this move — a single mid-cap token, ZKJ, which has added around 50% of the total DEX volume. ZKJ Outpaces Peers by 68x — But Why? Grasping the scale of DEX dominance by ZKJ takes some doing. Consider this: ZKJ itself ranks only about #106 by market cap. That’s an ordinary mid-cap position. And yet, its daily volume sits at a figure close to $6.8 billion. An absolutely astonishing amount when you compare it to other tokens with a similar market cap. For instance, Apecoin (APE), a much-hosted token that ranks close to a similar market cap as ZKJ, sees about $100 million in daily volume. Of that, roughly 90% comes from centralized exchanges. Those figures don’t come close to the amount of trading volume ZKJ pulls in from its decentralized exchange. By contrast, ZKJ’s DEX volume is 68 times that of APE, an incredible discrepancy that raises uncomfortable questions. We may find those answers in a new feature offered by Binance: Binance Alpha 2.0. Binance Alpha 2.0 offers users the chance to trade tokens listed on DEXs straight through the Binance CEX interface, even when those very same tokens exist nowhere on Binance itself in any official capacity. This accounting system effectively stitches together the usability of a centralized exchange with the liquidity of a decentralized one, all while users nicely nestle inside the Binance UI they’ve grown attached to. This new trading system is responsible for up to 80% of ZKJ’s trading in the last 24 hours. Much of the recent surge in trading this token has seen can be accounted for by this mechanism. And that is not entirely a good thing. 1/ The daily DEX Volume on BNB has increased 7 times compared to early May, from approximately $2B to $14B. However, close to 50% of the volume comes from ZKJ Pairs, the token by @PolyhedraZK . 2/ For context, ZKJ is a mid-cap token that ranked at 106. Their 24H volume is… pic.twitter.com/uEaEPV7tIt — Tom Wan (@tomwanhh) June 4, 2025 Suspicious Patterns Emerge: Wash Trading or Farming? Researchers have flagged a troublesome pattern associated with Binance Alpha 2.0. More than 150 wallets that exhibit nearly identical trading characteristics when it comes to ZKJ have been identified. What’s more, the analysis of blockchain data shows these wallets also exhibit the following traits: Almost identical total amount of trading Nearly the same amount of buying and selling Almost the same number of trades Almost the same average size of the trade These similarities are causing worries about wash trading, a practice in which traders (or bots) quickly buy and sell the same asset to boost volume and make it seem like there’s demand — a behavior that’s often linked to point farming or platform incentive schemes. Binance has accepted that bot activity exists within the Alpha 2.0 framework, which is linked to a points farming program. The platform has stated that it is monitoring this activity and doing what it can to minimize it. Nonetheless, the trading patterns that these wallets exhibit with uncanny regularity have led many people to believe that the trading volume associated with ZKJ is not generated in an organic way. The behavior of the execution addresses used for these trades is even more puzzling. Binance, acting as the proxy for DEX trades through Alpha 2.0, should be consolidating activity. But the execution addresses show that the ZKJ trade volume is evenly distributed, which is not at all what you’d expect with user-driven activity. This suggests that either an orchestrated strategy or an automated process is responsible for generating the volume. A Question of Transparency and Metrics Integrity The ZKJ episode brings into focus a much larger problem that DeFi and hybrid exchange platforms are forced to confront. They have to find a reliable way to tell real market interest from fake, artificially generated metrics. Even massive volume figures can no longer be automatically trusted. There are a few well-known mechanisms and possibly a handful of bots doing the work to drive up the numbers. And the industry learns once again that volume alone doesn’t tell the full story. This is a cautionary tale for investors. Although the emergence of Alpha 2.0 and cross-platform trading brings with it the promise of exciting new tools and efficiencies, it also gives us reasons to suspect that those tools and efficiencies are being gamed. So why be wary? Because these developments threaten to undermine the appearance of genuine liquidity in the capital markets. Binance is still under scrutiny, and so is ZKJ; meanwhile, the industry is waiting to find out more and, quite possibly, some stricter safeguards to ensure that the next surge in billion-dollar volumes really is based on user activity — as opposed to wallets that have been programmed to look, in almost every way that counts, like real users. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. 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