A simple understanding of Bonding Curve TGE rules and risks
What is TGE?
TGE (Token Generation Event) refers to the pre-sale phase of a new token before it goes public. Users can use BNB through the Binance wallet to pre-subscribe to new tokens, such as 'Mango Coin', to obtain tokens before they are listed, similar to participating in an 'internal testing subscription'.
What is Bonding Curve?
A Bonding Curve is an automatic pricing mechanism where the token price increases with the total supply. To use an analogy of a 'fruit stall':
The first mango is 1 yuan, the second is 2 yuan, the third is 3 yuan...
Price = Current quantity sold × Unit price
This means:
The earlier you buy, the cheaper it is.
Every time someone buys, the price goes up a little.
If someone sells, the price may drop a little.
This mechanism ensures automatic liquidity at the time of token issuance, with prices determined by supply and demand, avoiding manipulation.
The actual process of Bonding Curve TGE
Assuming the pricing rule for Mango Coin is:
Price = 0.01 × Total current token supply
Xiaoming immediately buys 10 BNB, the price is low, and he obtains 1,000 Mango Coins;
Xiaohong enters slightly later, the price rises to 0.02 each, and with the same amount, she can only buy 500;
If someone sells back Mango Coins midway, the price slightly drops, and queued buyers will continue to transact.
Activity phases
Subscription period: Submit buy orders with BNB, dynamically priced according to the Bonding Curve;
Waiting for transaction: If the quota is full, your order enters the queue, BNB is locked, and cannot be canceled;
Countdown ends: After the event ends, unexecuted orders are automatically canceled, and BNB can be refunded;
Token listing: After TGE ends, tokens can be freely traded and officially enter the market.
Risk warning
High price fluctuation: The later you buy, the more expensive the token is; (some other means may allow early acquisition!)
Orders cannot be canceled: BNB is locked until the event ends; (losses if BNB drops)
Uncertain token quantity: Calculated based on the price at the time of transaction; (data is opaque, you also do not know what price you bought at)
No profit guarantee: The price may rise or fall after the token is listed. (Risks after token distribution)#TGE空投
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