AI tokens such as ai16z and Venice Token (VVV) have seen their token prices drop sharply since the launch of the Binance perpetual contract. The price of ai16z, which was $2.42 on January 2, has plummeted by more than 84% and is currently trading at just $0.38. VVV, which was over $18 at the end of January, has fallen by 67% and is currently trading at $5.82. Ilya Paveliev, founding partner at Arete Capital, said: "The listing of Binance perpetual contracts has become a'death trap 'for many recent hot tokens, from ai16z to Venice. Rather than promoting healthy price discovery, these contracts provide traders with a convenient way to short tokens aggressively and sell their spot positions." "Unlike the cash market, the perpetual market allows traders to influence prices with relatively low capital. Spot prices reflect organic buying demand, while the perpetual market can allow big players to have a big impact on the market," says Ilya Paveliev. "Market makers that are supposed to provide liquidity stability often choose to exit the market after the token goes live, causing prices to plummet."