Until the moment of token distribution and exact tokenomics, trading in the premarket is super risky; this is somewhat obvious, but users still trade, and some people skillfully take advantage of this.
📊 Let me remind you how the premarket works.
Let's say I have 100 tokens of some project, let's call it Lame-coin. And I want to sell 100 Lame-coins in the premarket for $2, since I can't transfer these tokens, I need to somehow convince the exchange that I actually have them, for this I provide collateral. That is, in order to sell 100 Lame-coins for $2, I must deposit $200 as collateral ($200 is frozen from the buyer). As soon as trading starts, I will transfer 100 Lame-coins to the buyer and get back my $200 collateral, as well as the buyer's $200. However, if the price of Lame-coin suddenly rises sharply, for example, to $6 and I change my mind about selling Lame-coin for $2, then I can break the contract, sell nothing, but I will lose my collateral.
📝 Let's get down to business
What exchanges do is they roll out the premarket even BEFORE the tokenomics and token distribution become known, provoking users to trade blindly. And then manipulators, namely insiders, the exchange team, and representatives of the project itself, take over. They have completely untethered hands and sell tokens for several times more.
🪒 Let's add a bit of specificity
The project team in collusion with the exchange gets the opportunity to conduct fake trades, keeping the trading level, for example, at $0.5 per token, maximally filling this offer, selling wrappers to users at exorbitant prices. The buyer will have no way to refuse this deal. Then the official token distribution occurs, and the price collapses, sometimes falling more than 10 times. And if you look, this happens absolutely every time. The price held best for Major, declining by about 2 times.
🧩 One of the reasons
Apparently, this is one of the reasons why Bybit and OKX, which used to love offering premarkets for TON projects, not only stopped doing this but also ceased listing TON projects altogether. I remember being the first to say that TON projects would never again be allowed on Binance, and I was bombarded with insults. Now the ceiling is Tier-3 exchanges like Bitget, etc. And to be honest, I'm a bit surprised that project teams that have raised quite large donations go and try to suck out another $20-30k through the premarket; it's somewhat greedy, to be honest.
