Binance's price limit experiment failed? Arkham limited to tenfold increase, leading to a pre-market surge in ARKM

Binance's latest Launchpad project, Arkham (ARKM), was successfully distributed and traded on 7/18, with prices surging to 0.89 at one point, marking a 17.8-fold increase. Binance had implemented a "tenfold limit up" rule the day before the ARKM token distribution to protect investors, but is it really effective?

Binance Issues "Tenfold Limit Up" on 7/17, Starting with a Tenfold Jump Before Market Opens

Binance announced on 7/17 that in order to prevent excessive volatility at market open, causing potential harm to users, they will implement a trial price limit mechanism within the first five minutes of trading. However, this measure actually resulted in all pre-market trading prices being at least ten times the starting price.

In addition to Binance Launchpad distributing ARKM tokens, Arkham ARKM also conducted an airdrop for early users. Based on trading records on Uniswap, starting at 4 PM on 7/18, the trading price was already ten times higher than the Launchpad issuance price, with a minimum of 0.6 and even breaking through 0.9.

Binance's Arkham Frozen for Five Minutes, Unable to Place Orders

At 8 PM on 7/18, according to tests, Arkham accumulated at least $136 million in orders for ARKM/USDT within the first five minutes of trading on Binance, and market orders exceeding the price limit were not allowed during this time.

After the lifting of the limit up order, transactions were briefly made at 0.89, then maintained at a level between 0.6 and 0.7:

Is Binance's Limit Up Order Helpful?

In the case of Arkham, the early announcement of a tenfold limit up seemed to set a minimum price expectation for pre-market trading on Binance. Whether inside or outside of Binance's market, prices surged over tenfold.

The initial intention of the limit up order may have been to prevent investors from entering at market price before a clear market pricing is established, which could lead to extreme price execution and potential losses for investors. However, this measure has created market expectations, making the limit up price the trading floor.

As a result, the meaning of protecting investors in the first five minutes remains to be publically evaluated.