Its better to arbitrage on trading platforms than on project parties now. Arezs arbitrage studio has shifted 80% of its focus to arbitrage on trading platforms this year.
Before the May Day holiday, the information Register on Coinbase and get a 200 U airdrop that went viral in the group also happened to confirm this shifting trend.
This round of cycle is a cycle in which the hair-pulling people are being fought back. Most of the hair-pulling studios that have not made any money have already closed down, and most of the hair-pulling KOLs have also transformed into other tracks. For example, old hair-pulling KOLs like IceFrog have transformed into project rights protection bloggers.
Against this backdrop, BlockBeats noticed that some studios with a keener sense of smell had already changed their tune: some switched to trading platforms and took precise advantage of liquidity spillovers; some returned to traditional IPOs and turned the Hong Kong stock market into a new ATM; and some quietly started businesses selling water and infrastructure to earn a more stable flow of money.
CEX: A new hunting ground under liquidity spillover
“Today’s project owners are eager to divide all the tokens among themselves,” Arez said with a wry smile.
In the last cycle, studios were used to focusing on project owners - testnets, airdrops, and community activities. However, as overall market liquidity tightened, in order to ensure control after going online and save limited budgets, project owners generally adopted a strategy of reducing community quotas: airdrop rewards were significantly reduced, and the proportion of tokens that retail investors could get was reduced again and again.
The black boxing of testnet and airdrop standards and the reduction of rewards have made it increasingly difficult for ordinary coin collectors to make profits. This change has directly led to the elimination of a large number of small studios, and the coin collector ecosystem has accelerated its internal circulation. Faced with the exhaustion of the project partys coin collector channels, the studios have to find a new battlefield.
“It used to be very profitable to do projects, but this cycle is different.” Arez lamented, “Now many project parties are actually working for trading platforms and market makers. Where is the meat to be shared with outsiders?”
Trading platforms still have the largest pool of funds and active users. Therefore, trading platforms have become a new target for those who want to play with money.
In order to promote the listing of new coins, promote new products, and cultivate user habits, trading platforms continue to spend money and release a lot of incentives. Whether it is IDO new listings, trading volume rewards, or volume arbitrage, the liquidity spillover of trading platforms has become a new opportunity depression. This also provides a new hunting ground for the wool studios.
Wallet IDO IPO
“We have no problem doing 200 accounts for each Binance wallet IDO,” Arez said. If we calculate the profit of each account at $30 to $50, the income of their team after one IDO is equivalent to the salary of a domestic white-collar worker for half a year.
Not only Arez, Lao Zhangs studio also found opportunities in the trading platform.
As early as the Worldcoin period, Lao Zhang had accumulated a batch of KYC resources, and now he has also taken advantage of the opportunity to participate in various activities of the trading platform.
Usually, the studio will cooperate with KYC suppliers, brushing platforms, etc. to form a profit-sharing mechanism: the supply chain provides identity resources, the studio is responsible for batch operations, and finally the profits from airdrops or new currency arbitrage are jointly distributed.
Take Binance wallet Launchpool as an example. The bonuses in the early stage were extremely generous, and each account could make nearly $100 in profit after one activity. However, as the number of players surged, the platform continued to raise the threshold: such as the transaction volume of the wallet within a month, the introduction of KYC facial recognition, the restriction of operation time, Alpha points, etc. 
Image source: Bitergua
“In the beginning, we mainly used KYC resources in Vietnam and the Philippines, which were relatively low-cost,” Zhang recalled. However, as Binance Wallet added more complex face verification and short-time operations to new listings, overseas KYC resources became increasingly difficult to apply on a large scale.
“So now, we basically negotiate KYC resources ourselves and no longer rely on channel dealers,” said Lao Zhang. 
Image source: Pump Superman
However, even with more flexible resource allocation, Arez also admitted that as the threshold continues to increase and the over-subscription multiples hit new highs, the amount of preparation and cost required for a Launchpool are also rising.
Now its getting crowded, there are too many people and too little money, after all, the profits are decreasing every time, he said. Therefore, studios are also constantly looking for new opportunities and no longer rely solely on IDOs.
We will do whatever the platform promotes
“The reward logic of the trading platform is essentially to buy data with money,” Arez concluded.
In addition to IDOs, trading platforms often launch various trading rewards or airdrops to promote new products. Usually, they are concentrated in the early stage of new product launches, requiring users to complete a certain amount of trading or deposits, and the rewards are generous and issued quickly.
“The logic is actually very simple. Wherever the platform lacks trading volume, there is the largest activity subsidy.” Arez told BlockBeats that they have dedicated people and interfaces to monitor changes in announcements of major trading platforms, so they can quickly capture any opportunities. 
In order to accurately hit the big hair, Arez spent a lot of time trying to figure out the strategic styles of major trading platforms. He compared the competitive situation of trading platforms to the situation of the separatist hegemony of various countries during the Spring and Autumn and Warring States Periods.
Each platform is like a vassal state, with different national conditions and different ways of fighting. Our task is to find our own opportunities in these small wars. Arez said with a smile, and he gave an example that the team often talked about: When Shang Yang carried out the reform, he had to set up rewards and punishments. He said that whoever could carry this piece of wood to the north gate would be rewarded with ten gold coins. Because no one went, the reward kept increasing. When it increased to fifty gold coins, someone went up to carry it and got the reward.
In his opinion: Coinbase recently launched a large-scale 200U registration airdrop, which is to support its contract trading sector and make up for its long-standing shortcomings; Bybit vigorously promotes the payment card function and launched a series of card swipe cashback activities; and Gate is promoting some new meme functions... The principles are the same, and the essence is the same as the Qin State rewarding ten gold coins for reforming the law today and the Zhao State rewarding five gold coins for reforming the law tomorrow.
“My goal is to be the first one to carry the wood,” Arez said. In the new round of trading platform competition, he would rather be the first one to test the waters and get the first bite of the pie: “You just pick up whatever the platform wants to promote and get the pie from the platform.”
When the projects airdrops became a black box game, the trading platform became the main force of money-spending in the new cycle: from the IDO of Binance Launchpool, to the real money of Coinbases contract track, to the battle for traffic of Bybit payment cards, the studios with a keen sense of smell have already turned their guns. In the liquidity overflow of these trading platforms, the studios with a keen sense of smell have once again found their own way to survive.
Killing two birds with one stone: low-risk arbitrage + short-drop
In addition to participating in activities and IDOs, some more niche studios have explored a dual-income model of arbitrage + airdrops on trading platforms. Backpack trading platform is a typical example.
I would also like to strongly recommend the interview article published by Cookie last week - Backpack + AI, even code novices can make money with scripts at low risk . The article interviewed CJ, a high-level player who made arbitrage scripts on the Backpack platform, and shared many practical skills and ideas that can be used directly:
For example, multiple strategies can be superimposed, such as buying SOL in spot and shorting SOL in the contract market at the same time, and then bringing the spot to the chain to participate in the liquidity pool (LP Farming) to earn handling fees, and by the way, superimposing the airdrop expectations of different platforms to achieve the goal of killing two birds with one stone; for example, by communicating with AI assistants (such as Cursor), constantly correcting and optimizing the logic, and finally building a set of automated trading and interactive script systems, which greatly improved the efficiency of arbitrage and airdrops.
On trading platforms with overflowing liquidity, arbitrage through trading and taking advantage of airdrops has become an important weapon for the new generation of studios. In particular, platforms like Backpack, which have both the expectation of issuing coins and the ability to support multi-strategy arbitrage, have become a must-have for studios.
Hong Kong stocks small spring, studios return to their old business
In addition to looking for opportunities for liquidity spillover on trading platforms, some faster-reacting hair-pulling studios have also turned their attention to new listings of Hong Kong stocks.
Since its hard to make money in the cryptocurrency circle, its better to go to the traditional market to find meat. Arez told BlockBeats that this year their studio has set up a special Hong Kong stock IPO team to be responsible for Hong Kong stock IPO subscription projects. Since the second half of 2024, the performance of Hong Kong stock IPOs has been exceptionally bright, ushering in a small spring market, which has become a new source of cash flow for many IPO studios.
Among these new stocks, Mixue Ice City and Mao Geping performed particularly well: Mixue Ice City soared more than 47% on the first day of listing, and the net profit of winning one lot was close to HK$10,000. As a well-known high-end beauty brand, Mao Gepings first-day increase was close to 58%. A single account only needed HK$2,880 in principal to subscribe for 10 lots, and the final average household income exceeded HK$16,000.
“When it comes to new listings on the Hong Kong stock market, I look at a few points: good fundamentals, high market enthusiasm, large-cap stocks, low issue valuations, and high subscription multiples. The winning rate can be above 70%.” Arez said that their current winning rate and certainty in new listings on the Hong Kong stock market are far greater than those of cryptocurrency projects.
In the cryptocurrency world, the current airdrop standards of the project parties themselves have been completely black-boxed. Most projects no longer disclose any standards, and even directly manipulate the list in the background: the proportion of self-retained addresses has increased significantly; the standards are vague, and the scoring system is privatized, and ordinary plunderers have almost completely lost predictability; the success rate of drinking soup behind the project party has dropped drastically. Even some resource-based studios rely on their private relationships with the project parties: the project party directly allocates airdrop standards to partners; the studio produces interactive addresses in batches according to the agreement to ensure that the interactive data meets the standards; and the accounts are divided according to the proportion after the airdrop is issued. But obviously, this opportunity only belongs to a few players with resources and relationship chains, and ordinary studios are basically excluded.
In comparison, IPOs of Hong Kong stocks seem to be much purer.
At the same time, just like the competition between cryptocurrency trading platforms, Hong Kong brokerages are also aggressively competing for customers to open accounts: Yaocai, Huasheng, Tiger and other brokerages have launched free commission offers, and some brokerages have given away stocks for transfers. Some brokerages have given away 100 shares of Tencent Holdings, and some brokerages have given away Buffetts heavily-held stock Occidental Petroleum...
Therefore, the leverage of new financing provided by securities firms is also higher. In the past, securities firms provided a leverage of 10 times, and a few securities firms could provide 20 times or 30 times. However, since the second half of last year, securities firms can provide a leverage of 50 times or even 100 times, said Arez.
(Note: 10x financing leverage means that the cost of new shares for a single account is reduced to 1/10 of the original)
Selling water, renting servers, and making money from people
As long as there are a large number of game-playing players, there will be a game-playing business to be done.
As the project owners are increasingly strict in reviewing IP sources and interactive environments, it is no longer realistic to use widespread IPs (commonly known as thousands of people riding IPs) to make money. Mainland IPs are frequently blocked by project owners, and overseas IPs have become a hard requirement for some project interactions; multi-account operations require a large number of independent IPs to prevent associated account blocking; node-based and idle projects (such as Nillion, Grass, etc.) have extremely high requirements for server stability and IP purity.
As a result, professional server and IP suppliers came into being.
The service process of a typical server IP supplier includes: providing overseas cloud servers (such as ByteDances Volcano Engine, AWS, Hetzner, Tencent Cloud International Edition, etc.); configuring stable independent IP; pre-installing the basic environment required for interaction (system, wallet, script, toolkit, etc.); some high-end services even provide customized solutions such as node optimization, traffic distribution, and script deployment.
Byteplus.Pro is doing such business. Since the Grass project, Miko, the founder of Byteplus.Pro, has noticed this small trend and started the Web3 business with traditional Web2 servers, IPs, and GPU resources.
We are the Web3 infrastructure provider, Miko said. We are connected to the resources of big companies such as ByteDance and Tencent Cloud. We are their overseas agent and even have the official node lines for Tiktok live broadcast.
For LuMao Studio, it is better to directly purchase a set of services instead of building a complicated environment by themselves, which not only saves time but also increases the success rate. We are like water, electricity and coal in the LuMao track. Any industry and track needs infrastructure service providers like us to operate. As the founder Miko said.
The business-savvy experts in this field have actually also been swept down, and the selling water (test coins) business is the most direct manifestation of this.
In the past, test coins were mainly distributed free of charge by the project party for users to test interactions. But today, this link has been highly commercialized and formalized, and the water selling industry has been basically squeezed out by mature products.
For example, service providers such as gasdotzip and memebridgeb are already able to provide one-stop services such as purchasing test coins and cross-chain bridge transfers, with mature operations and complete systems.
In addition to this mature selling water product, when searching for popular wool-pulling projects on Twitter, you can always see some personal selling water tweets, and such messages can also be seen in various WeChat groups. Test coins should be part of the on-chain testing, but nowadays, sometimes it is difficult for us to distinguish the difference between the main network and the test network.
The most typical example is Monad. Although the mainnet has not yet been launched, there are already a large number of NFT assets on the testnet. These assets are widely traded on Magic Eden and look no different from the real mainnet assets.
The test coin that gives people the first impression of being worthless is actually an arbitrage opportunity. Opportunities are really everywhere in the cryptocurrency world.
This is a new cycle, a new hunting ground and new rules of survival.
There is no shortage of smart people in the world of lure. The real difference does not lie in whether the environment is good or bad, but in who can complete self-transformation the fastest in the face of change.
In this round of market changes, project owners have tightened airdrops, liquidity has shifted to trading platforms, and traditional arbitrage paths have been continuously compressed. The era when you could earn airdrops by burning gas and interacting with others is gone forever. In the new cycle, those who can really survive are often not the ones who run the fastest, but those who can see the situation most clearly and actively adapt.
After all, in the cryptocurrency world, survival and evolution have always been the most important abilities.
