CZ tests Maximal Extractable Value (MEV) issues with a leveraged trade, causing market movement on BNB Chain - IcoHolder.

Binance founder Changpeng Zhao, also known as CZ, recently sparked significant market movement with a leveraged trade aimed at testing Maximal Extractable Value (MEV) issues. On March 23, Zhao opened a 24.7x leveraged long position on the token Mubarak (MUBARAK), using 0.04 BNB as collateral on APX Finance. The transaction, which was tracked and reported by on-chain analyst ai_9684xtpa, saw the token's price surge shortly after the position was opened.

Within just seven minutes of Zhao's trade, the APX token surged by 26%, rising from $0.64 to $0.81. MUBARAK also saw a price increase of 5.5%, climbing from $0.146 to $0.154. While Zhao downplayed the market reaction, stating on X, "Doing a little on-chain testing on Sunday, as usual. Nothing to be excited about," the transaction still triggered substantial buying pressure.

Zhao's trade follows a familiar pattern of market volatility when he engages in public trades or comments on social media. Earlier, Zhao's purchase of 20,150 MUBARAK for 1 BNB—worth around $600 at the time—led to a dramatic increase in MUBARAK's value, pushing it to the top of BNB Chain's memecoin rankings. The surge also resulted in trading volumes surpassing $180 million.

However, the leveraged trade on MUBARAK was not merely a market move. Zhao later explained that the trade was part of a test to evaluate the presence of MEV, a phenomenon where transaction orders are manipulated by validators to maximize profit. Despite the market impact, Zhao did not immediately share the findings from his test.

MEV, though commonly associated with the Ethereum network, has also been a concern on BNB Chain. In fact, BNB Chain users reportedly lost approximately $1.5 billion in 2024 due to MEV-related issues. Zhao had previously expressed his concerns about MEV in a February 7 poll on X, where he inquired whether BNB Chain should reduce or eliminate MEV issues.

As the market watches for further developments, Zhao's latest actions signal an ongoing exploration into improving the BNB Chain's blockchain mechanics.