A few days ago, Binance announced that using the exchange's limit trading for alpha tokens would enjoy a four times trading volume bonus, officially launched yesterday at 8 o'clock. Based on my tests over the past two days, I will share my personal experience with limit brushing.
1⃣️ Limit orders can be executed for immediate buy and sell.
Everyone knows the downside of limit trading: it is easy to buy but difficult to sell. Placing a sell order may take several minutes to complete, reducing the efficiency of score brushing. Moreover, due to the prolonged waiting time, the probability of encountering a sharp drop increases, and one might inadvertently end up at the peak.
Additionally, limit orders require you to set appropriate buying and selling prices, making them quite a bit more troublesome than market orders (instant orders).
This is also the reason why I dislike using limit orders for score brushing and prefer market orders.
However, when I brushed $KOGE I found that limit orders can be executed for immediate buy and sell using the exchange's recommended price, effectively resolving the two major difficulties of limit orders: difficulty in selling and the issue of determining the order price.
2⃣️ Four times the trading volume, wear and tear significantly reduced compared to wallets.
The total wear and tear of the exchange can be divided into fee wear and price difference wear. Fee wear is counted once for buying and once for selling, totaling two times; price difference wear is counted once.
Fee wear is calculated proportionally; the slight wear is 0.1U for brushing 1000U; price difference wear is also calculated proportionally, similar to the above, brushing 1000U incurs 0.1U wear.
Taking brushing 15 points (excluding deposit points) as an example, brushing 15 points daily requires 32768. Now, under the four times trading volume bonus, only 8192 is needed. If each transaction is 1024U, it only requires 8 purchases, with total wear and tear of 2.4U/day (0.1+0.1+0.1)x8, resulting in a wear of 36U over a 15-day cycle, whereas brushing from a wallet typically requires about 60U for the same cycle.
3⃣️ Details of brushing limit trading.
1. The actual purchase amount does not match the set purchase amount.
When opening a position, I found that although I set the purchase amount to 1024U, the actual purchase amount usually falls short by a few U.
Therefore, if you want the actual purchase to exceed 1024U, the best method is to give some leeway. I generally set the purchase amount to 1040U to ensure the actual purchase is greater than 1024U.
2. The marked selling price is distorted compared to the actual price.
You may notice that the marked selling price on the exchange might be a few U lower than your principal, but there is no need to worry; the marked selling price does not represent the actual transaction selling price.
Through transaction records, it can be found that the actual selling price is still the principal minus the slight trading wear. Not the marked selling price given by the exchange.
4⃣️ Personal insights
🔹 Try to find coins with high trading volume to brush, such as koge, br, oik. These coins have many traders, high trading volume, and good liquidity, allowing for better implementation of immediate buy and sell for limit orders.
🔹 Since the actual purchase amount fluctuates, it’s best to set the purchase amount 10-20U higher. For brushing 1024U, set it to 1040U; for brushing 512U, set it to 520U to ensure the actual purchase amount meets the standard.
🔹 Pay attention to risk management. Since Binance launched this system, it is essentially competing with on-chain transactions, and given the current wear and tear, it is indeed considerably lower than wallets. As a result, the trading volume on-chain will be divided by CEX, leading to a significant reduction in the rental income for project parties assembling LP.
Since project parties can't make money from assembling LP, the probability of them withdrawing liquidity will significantly increase compared to before, perhaps at the next moment. Once the project party withdraws liquidity, it will be a sharp drop and chaos, so everyone must pay attention to risk management.
I believe the best way to manage risk is not to brush two or three large amounts for convenience but to do many small amounts. As for how small this small amount should be, it's up to one's tolerance. I do a single amount of 512U; if I get caught, a loss of 200+U is bearable for me.
