Junior high school chemistry mentioned that in order to make the bubbles you blow more stable and last longer, you need to add polyvinylpyrrolidone (PVP) to the solvent. It is a thickener and foam stabilizer that provides structure and durability to the foam, allowing it to maintain its shape and resist external pressure.

Maintaining sustainable liquidity and defensible market share on Perpdex is achieved not through passive farming, order calling, or volume manipulation, but by proactively building an extremely competitive psychological environment. The "PVP" here is not just an abbreviation for chemical stabilizers, but rather Player-vs-Player.

By carefully designing mechanisms to pit traders against each other, the protocol’s mechanisms should be designed to unleash the most powerful inherent driving forces of humanity—greed and unwillingness—to create a self-perpetuating flywheel of trading activity, thereby breaking away from over-reliance on inflationary token releases and ultimately achieving true market stability.

1. The Great Game: Deconstructing the Zero-Sum Reality of Trading

The essence of trading is a zero-sum game. Either you lose or I gain. There is no need to hide or gloss over the situation.

Meme: The Original PvP Arena

The meme trading ecosystem embodies the PvP principle in its purest and most unvarnished form. Unlike assets that claim to possess underlying utility or cash flow, the value of memes derives almost entirely from their cultural relevance, community hype, and virality on social media—in other words, attention itself. Trading in such a market becomes more like "cultural arbitrage": predicting or being the first to spot the next hot topic. This makes the meme market a stark zero-sum game: one trader's gains are directly tied to another's losses. On low-fee, high-throughput public chains like Solana, this PvP environment is pushed to the extreme. Trading bots are rampant, and median position holding times are measured in seconds. The market has evolved into a "super PvP" ecosystem, making it nearly impossible for new retail traders to achieve significant profits. This brutal environment reveals the true nature of the speculative market—not a collaborative community, but an arena where participants cannibalize each other.

Since it is a place where people eat each other, it seems a bit redundant to say that you are a Bodhisattva who has come down to earth to shine on the earth.

The illusion of positive-sum growth

The dominant narrative in the cryptocurrency industry often emphasizes its "positive-sum" aspects: the ever-growing total market capitalization, new use cases enabled by technological innovation, and a continuous influx of new users. This macro narrative is true and important, but it's fundamentally disconnected from the micro level—the daily experience of traders on Perpdex. For a user engaging in high-frequency trading on Perpdex, their goal isn't to "build a new financial system" but rather to extract capital from other market participants as prices rise and fall. Their profit and loss (P&L) dashboard reveals a harsh zero-sum reality. Any successful PvP protocol must build on this fundamental understanding, cease presenting itself as a universal "utility," and embrace its true identity as an "arena." The protocol's positioning should shift from "trading market" to "beating other traders." This repositioning aligns its product features with the true motivations of its users.

Lever: The Great Amplifier

High leverage is a core feature of Perpdex, acting as both a catalyst and amplifier in PvP dynamics. Leverage not only magnifies financial gains and losses, but more importantly, it dramatically amplifies the emotional intensity of PvP conflicts. The euphoria of a profit and the devastation of a loss are disproportionately magnified. This emotional amplification is crucial in hooking traders into the psychological loop we'll discuss in the next section.

Traditional incentive models assume that trading volume is a function of liquidity and incentives, and that trading volume is a function of conflict. By designing mechanisms that create ongoing, quantifiable conflict (such as leaderboards and tournaments), protocols can generate a stable base of trading volume driven by inherent competition without relying on direct token rewards.

II. The Doctrine of Participation: Weaponizing Greed and Reluctance

The core of PVP is to bring out the two hearts of people - greed and unwillingness

The Winner's Curse: Cultivating Greed and Overconfidence

For winning traders, the platform's goal is to systematically cultivate their greed and overconfidence, prompting them to trade bolder, more frequently, and more selflessly.

• Psychological Mechanisms: Successful trading triggers a series of cognitive biases. The first is overconfidence bias, where traders tend to attribute their success to superior skill rather than luck, leading them to underestimate the risks of future trades. The second is confirmation bias, where traders actively seek out information that confirms the effectiveness of their "winning strategy" while ignoring contradictory evidence. This psychological state is known in trading psychology as the "winner's curse," where the largest profit often foreshadows the largest subsequent loss. From a neuroscientific perspective, profits stimulate the release of dopamine in the brain, forming a powerful reward circuit that reinforces trading behavior and encourages traders to take greater risks in search of greater excitement.

Take some mainstream cex/protocols as examples:

• Platform amplification strategy: The protocol should be designed to amplify the thrill of victory and transform it into a public symbol of social status.
• Prominent P&L display: Display high floating P&L (PNL) in the most prominent position on the interface, and use positive colors such as green.
• Achievement system: establish "Winning Streak" badges, "Hundredfold Profit" medals, etc., and transform trading achievements into virtual identities that can be shown off.
• Public Leaderboards: Real-time updated leaderboards are a core tool for creating social pressure, turning individual profits into a public competition.
• Social sharing feature: Share profit screenshots to social media with one click, turning winners into “walking billboards” for the platform while inflicting FOMO, jealousy, and anxiety on other users.

The Loser's Game: Creating "Reluctance"

For losing traders, the platform's goal is not to prevent them from rationally exiting due to losses, but to stimulate their "reluctance to give up" and prompt them to immediately invest in the next trade to "recover their losses." This is the more powerful and critical link in the entire psychological cycle.

• Psychological Mechanism: At its core is the theory of loss aversion. Pioneering research by Daniel Kahneman and Amos Tversky demonstrated that the psychological pain of a loss is twice as great as the pleasure of an equal gain. This intense negative emotion can lead to a range of irrational behaviors, such as holding onto a declining position to avoid admitting a loss (the sunk cost fallacy) or, more importantly, revenge trading. Revenge trading is impulsive, high-risk trading driven by anger, frustration, and resentment after a significant loss, with the sole purpose of quickly recovering the loss. This resentment is the key driver of retaining losing users and driving their continued trading volume.

Take some mainstream cex/protocols as examples:

• Platform amplification strategy: Every detail of the interface should be designed to maximize users’ reluctance to give up, preventing them from conducting calm review and risk assessment.
• Visualize “almost”: When a user’s position is forced closed, the interface can show how “close” the price was to their stop-loss or profit target, suggesting that it was just bad luck rather than a strategic error.
• Loss framing effect: Framing losses as temporary “paper losses” or “pullbacks” rather than permanent capital losses, and immediately promoting new “market opportunities.”
• Instant re-entry incentives: After a user closes a position or is liquidated, prompts such as "one-click reverse opening" or "receive transaction fee discount coupons to fight again" will pop up immediately, shortening the user's decision-making time from loss to next transaction and utilizing the emotional window period to promote impulsive transactions.

From a protocol operations perspective, the most valuable users aren't the "smart money" who consistently profit and regularly withdraw their funds. Quite the opposite: the ideal user is the trader trapped in a cycle of profit and loss. Regardless of their net profit or loss, they consistently generate significant trading volume and fees. Maximizing the protocol's revenue comes from the vigorous churn of capital between winners and losers.

Therefore, every element of the platform design—from the color of the profit and loss numbers, to the animations after the transaction, to the default leverage ratio and social functions—is no longer a simple aesthetic choice, but a tool used to manipulate traders' psychology and guide them towards greed and "reluctance", two high-trading behavior patterns.

3. Liquidity Spiral: From Psychological Loop to Protocol Flywheel

Once a sufficient number of traders are captured through carefully designed psychological mechanisms, the protocol can initiate a self-reinforcing positive cycle, known as the "liquidity spiral." This process transforms individual irrational behaviors into sustainable, structural competitive advantages at the protocol level.

Phase 1: The core engine of “hooked” traders

This spiral begins with the core group of users, described above, driven by greed and unwillingness. These winners and losers are locked in a continuous trading cycle. Their trading behavior is, in a sense, "organic," driven more by intrinsic psychological needs (the pursuit of pleasure, recouping losses, proving oneself) than by external token incentives. This core group creates a stable and predictable stream of underlying trading volume and fee revenue for the protocol. This is the first step in freeing the protocol from reliance on hot money/"mercenary capital."

Phase 2: Attracting mature liquidity providers

With a stable and substantial underlying trading volume, the protocol becomes highly attractive to a second tier of market participants: professional liquidity providers. Market makers are drawn to the platform because they can consistently earn bid-ask spreads from the frequent trades generated by core traders. Arbitrageurs are attracted by price volatility; their activity helps align the protocol's prices with the broader market, thereby improving market efficiency. This infusion of professional liquidity significantly deepens the order book, reduces slippage, and improves the trading experience for all users. This makes the platform more attractive to new users and further strengthens the core engine.

Phase 3: The return of “mercenary capital” and the formation of a liquidity black hole

As the protocol builds a deep, active, and efficient market through the first two phases, an interesting reversal occurs. The "mercenary capital" that the protocol initially sought to escape now actively returns. This time, however, they are drawn not by the protocol's airdropped tokens but by the superior trading conditions—extremely low slippage, vast trading depth, and abundant arbitrage opportunities. Their arrival completes the final piece of the liquidity spiral. This massive influx of capital transforms the protocol into a "liquidity black hole"—a market with such immense gravitational pull that competitors struggle to dislodge it. At this point, the protocol's competitive moat has shifted from a fleeting incentive to an insurmountable structural barrier formed by network effects and deep liquidity.

At its core, PVP is a strategy that leverages artificially designed mechanisms (gamified incentives, psychological cues) to create what looks and feels like "organic product-market fit." Traditional liquidity mining, such as SushiSwap's vampire attacks and AsterDex's volume manipulation, addresses the "cold start" liquidity problem but fails to address user loyalty. Retention rates for users attracted by incentives are extremely low. PVP mechanisms and models aim to fundamentally address the retention problem by replacing economic "incentives" with a behavioral "addiction" (as described in the psychological mechanisms of gambling addiction). An addicted user doesn't need to be paid to play.

Therefore, while most protocols prioritize liquidity acquisition as their primary goal, the PVP model reframes it as a consequence. The primary goal is to maximize user engagement and trading volume through psychological mechanisms. Deep, stable liquidity is simply a natural consequence of achieving this primary goal. In the context of intense competition for liquidity among exchanges, the PVP model offers a more capital-efficient path: invest resources in product features that foster a competitive atmosphere, and liquidity will naturally follow trading activity.

4. Catalyst: Designed for a “Single Point Breakthrough”

To kickstart a powerful PvP flywheel, a precise and powerful catalyst is needed. This requires the agreement to abandon the "Generalized System of Preferences" incentive model and shift to a "single-point breakthrough" strategy that can create conflict, select winners, and inspire the losers to fight.

Broad-based liquidity mining or trading rebates are what users criticize as a "big-box" platform strategy. This strategy is inefficient because it rewards everyone indiscriminately, including "zombie users" who passively provide liquidity and trade infrequently, and those who scalp for points. This not only dilutes the incentives for high-value, active traders, but also creates significant token inflation pressure, ultimately leading to a rapid exit of mercenary capital as rewards diminish.

An effective "single point breakthrough" incentive model should be based on relative performance rather than absolute participation. The core principle is to reward traders who win the PvP competition, rather than everyone who participates in the trade.

A successful PvP incentive program inherently creates a large number of "losers" who gain nothing. This runs counter to the Web3 ethos of "inclusivity" and "community sharing," yet it's crucial to the model's success. It's the intense reluctance felt by these losers who "miss out" on the grand prize that motivates them to continue participating in platform transactions in the absence of direct incentives.

We can't expect a platform that prioritizes zero-sum games and winner-takes-all mechanisms to engage in "inclusive finance," can we? If you're held hostage by the ethics of "inclusive finance" or are being pressured by anti-scam communities to treat you fairly, then you might not be suited to this "cannibalism" trench.

Conclusion: A sustainable bubble

Let's return to our original chemistry analogy. Speculative markets are inherently bubbly. The goal of PVP isn't to eliminate bubbles, but to stabilize them. Just as polyvinylpyrrolidone provides structure, resilience, and durability to bubbles, a well-designed player-versus-player system can also provide a sustainable structure to the frenzy of market activity. It creates stability in trading activity and fee income amidst volatile price fluctuations.

The ultimate strategic recommendation is this: in the future competition among Perpdex protocols, the winner will not be those offering the highest APY, but those that most deeply understand and master user psychology. Success is no longer just the work of financial architects, but also the masterpiece of behavioral psychology architects.

Make PVP a doctrine - like the Chaoshan people, bring the gaming field to your own backyard; without guidance, water will naturally flow to every value depression.

Be like a Chaoshan person