ai16z and VVV see double-digit price drops since ‘death-trap’ perps listings

Key Notes:

• AI tokens AI16Z and VVV have suffered major losses, dropping over 84% and 67%, respectively, since their Binance perpetual futures launch.

• Analysts suggest Binance’s perpetual futures listings act as a “death trap”, allowing aggressive shorting while traders sell off spot holdings.

AI-focused tokens AI16Z and Venice Token (VVV) have seen steep declines in value following their introduction to Binance’s perpetual futures market. AI16Z, which launched at $2.42 on January 2, has fallen by 84%, now trading at $0.38. Meanwhile, VVV, which was valued at over $18 in late January, has dropped 67%, now sitting at $5.82.

In January, Binance introduced perpetual futures for AI16Z—now associated with the rebranded ElizaOS DAO—followed later by VVV, the token behind AskVenice AI infrastructure. However, these listings have sparked concerns over their impact on price stability.

“Binance’s perpetual futures listings have turned into a death trap for recent tokens,” said Ilya Paveliev, founding partner of Arete Capital, in a statement to The Block. “Rather than encouraging organic price discovery, these futures allow traders to short tokens aggressively while offloading their spot positions.”

How Perpetual Futures Impact Token Prices

Unlike spot markets, perpetual futures enable traders to manipulate prices with minimal capital, making them highly susceptible to market swings. Market makers, who typically help stabilize prices, often withdraw after a token’s initial hype, causing steep declines, Paveliev explained.

According to him, introducing perpetual futures for low-liquidity tokens amplifies volatility, benefiting short-term traders over long-term investors. “Binance Alpha’s model capitalizes on hype-driven AI and meme token trends, prioritizing speculation over fundamentals. This leaves retail investors exposed and erodes trust in the industry.”

Concerns Over Centralized Exchange Listings

Paveliev further pointed to larger issues in centralized exchange listing strategies, alleging that new tokens often become the target of aggressive market strategies with little regard for long-term sustainability.

Binance was contacted for a statement but did not provide a response at the time of publication.