What is TGE in crypto? Understand Token Generation Events, their role, and their impact on blockchain success! Click to learn more useful articles.
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What is a Token Generation Event (TGE)?
How Does a Token Generation Event Work?
Why Are TGEs Important in the Crypto Ecosystem?
Common Misconceptions About TGEs
Risks & Challenges
How to Participate in a Token Generation Event?
What to Look for in a Project?
The Future
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Initial Coin Offerings (ICOs) were a rage a few years ago and, since their inception, have raised over $50 billion for crypto projects. However, in recent times, Token Generation Events (TGE) have taken the place of ICOs.
TGEs are expected to unlock $155 billion worth of tokens between 2024 and 2030. But what do TGEs mean in crypto, how are they conducted, and how are they different from an ICO and other kinds of token launches? Let’s find out.
A token generation event, or TGE, is the launch of a utility token tied to one or more of a crypto project’s products, services, or applications (dApps). Other types of token launches, such as governance tokens, may also be included in a TGE.
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𝘕𝘰𝘵𝘦: 𝘜𝘵𝘪𝘭𝘪𝘵𝘺 𝘵𝘰𝘬𝘦𝘯𝘴 𝘢𝘳𝘦 𝘥𝘪𝘨𝘪𝘵𝘢𝘭 𝘢𝘴𝘴𝘦𝘵𝘴 𝘵𝘪𝘦𝘥 𝘵𝘰 𝘱𝘭𝘢𝘵𝘧𝘰𝘳𝘮/𝘱𝘳𝘰𝘫𝘦𝘤𝘵 𝘶𝘵𝘪𝘭𝘪𝘵𝘪𝘦𝘴 𝘴𝘶𝘤𝘩 𝘢𝘴 𝘢 𝘭𝘰𝘺𝘢𝘭𝘵𝘺 𝘱𝘳𝘰𝘨𝘳𝘢𝘮, 𝘢𝘤𝘤𝘦𝘴𝘴 𝘵𝘰 𝘢 𝘴𝘶𝘣𝘴𝘤𝘳𝘪𝘱𝘵𝘪𝘰𝘯-𝘣𝘢𝘴𝘦𝘥 𝘴𝘦𝘳𝘷𝘪𝘤𝘦, 𝘥𝘦𝘤𝘦𝘯𝘵𝘳𝘢𝘭𝘪𝘴𝘦𝘥 𝘴𝘵𝘰𝘳𝘢𝘨𝘦, 𝘰𝘳 𝘷𝘰𝘵𝘪𝘯𝘨 𝘢𝘯𝘥 𝘨𝘰𝘷𝘦𝘳𝘯𝘢𝘯𝘤𝘦. 𝘛𝘰𝘬𝘦𝘯𝘴 𝘥𝘰𝘯’𝘵 𝘩𝘢𝘷𝘦 𝘢 𝘴𝘵𝘰𝘳𝘦 𝘰𝘧 𝘷𝘢𝘭𝘶𝘦.
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UniSwap, Ethena, Hyperliquid, Drift, Manta, EOS, and Ethereum have conducted some of the most successful TGEs in history!
A TGE involves the creation and issuance of tokens to eligible users. A TGE can serve several objectives, including:
TGE tokens are smart contract-based and can be built around dApps, decentralised ecosystems, and blockchains to drive attention from the community. For instance, Berachain has had a successful testnet launch, and in a short span, millions became a part of its community. Berachain will enter its mainnet soon, and there’s a possibility of a TGE in 2025, which is highly anticipated among the community members.
If you are interested in upcoming TGEs in the crypto market, BeInCrypto shares some of the best TGEs to watch in 2025.
Now that you have understood what is TGE in crypto, let’s understand how it relates to initial coin offerings (ICOs) and other kinds of digital asset launches. TGEs arrive at the current epoch in Web3 with quite a bit of history:
ICOs gained popularity for the first time when Ethereum founders conducted an ICO event to raise funds for its early development. Read this article titled 𝘈 𝘝𝘦𝘳𝘺 𝘚𝘩𝘰𝘳𝘵 𝘏𝘪𝘴𝘵𝘰𝘳𝘺 𝘰𝘧 𝘌𝘵𝘩𝘦𝘳𝘦𝘶𝘮 by
ICOs are akin to IPOs in the share market. They became massive during the altcoin boom in 2017. Earlier, ICOs were strictly meant to launch native coins for blockchains, but later, projects built on top of Ethereum and other chains started launching their ERC-20 tokens via ICOs. The 2017 ICO bubble burst as regulatory roadblocks and fraud projects started capturing the crypto market.
TGEs are often considered synonymous with ICOs. However, there are subtle differences. Both ICOs and TGEs are crypto fundraising methods, but TGEs are more generalised versions of digital asset launches.
𝘕𝘰𝘵𝘦: 𝘐𝘊𝘖𝘴 𝘢𝘯𝘥 𝘚𝘛𝘖𝘴 (𝘚𝘦𝘤𝘶𝘳𝘪𝘵𝘺 𝘛𝘰𝘬𝘦𝘯 𝘖𝘧𝘧𝘦𝘳𝘪𝘯𝘨𝘴) 𝘢𝘳𝘦 𝘣𝘢𝘯𝘯𝘦𝘥 𝘪𝘯 𝘮𝘢𝘯𝘺 𝘤𝘰𝘶𝘯𝘵𝘳𝘪𝘦𝘴.
ICOs gave way to IEOs, or Initial Exchange Offerings. In this type of offering, centralised crypto exchanges facilitate token sales and distribution. IEO launches were safer than ICOs, as CEXs conducted due diligence before onboarding projects on their exchanges. IEOs also need to comply with security regulations.
The Ripple vs SEC case is a good example of how government agencies can file lawsuits in case of non-compliance. Both Ripple and the SEC claimed partial victories in the lawsuit.
If a decentralised exchange (DEX) facilitates the token launch and distribution instead of a CEX, it is called an IDO. Like IEOs, IDOs must comply with securities regulations.
Here’s an NFT.EU article breaking down IDOs for you.
Most token launches today are TGEs. Projects are careful not to announce them as ICOs, as ICOs carry regulatory scrutiny. Classifying your token launch as a TGE also clearly signals to the project team that it is a utility token, not a security or a coin with a store of value.
TGE’s core nature remains the same as that of ICOs, IEOs, and other token launches, but objectives, occurrence, and regulatory aspects differ.
A TGE process involves several steps right from the inception of the project to the presale or airdrop. Here’s how you can launch a successful TGE for your blockchain project:
Lay a strong foundation for your project. Whether you are launching a token with an MVP (Minimum Viable Product) or a testnet, make sure it is backed by solid market analysis, deep fundamentals, and a well-laid-out business plan. Determine how you will monetise activities within the ecosystem, who your target audience will be, and what your path to profitability will be. Once you have turned your innovation into a business that will generate revenue, the token comes into the purview.
Once the business plan is in place, begin by defining the utility your token will have. These utilities will ultimately define the role of your token in the ecosystem. For instance, Ethereum’s token Ether is used to pay gas fees, and Filecoin’s $FIL is used to pay miners. It can also serve as collateral for storage providers (SPs), and UniSwap’s $UNI is used to swap tokens on the DEX, which also carries voting rights.
Next comes tokenomics, where aspects such as token supply, distribution, price at the time of TGE, vesting schedule, and other details are determined. Tokenomics also includes how many tokens to allocate for public sales, private sales, team rewards, and ecosystem development. An economic model with a deflationary supply and self-sustaining revenues would ensure the long-term health of your token.
Your choice of tokenomics would also determine how much relevance the community, VCs, or core team has in the project. For instance, take a look at how Hyperliquid held up its community-first ethos via its tokenomics.
The whitepaper serves as both a technical document and a marketing pitch for early investors and VCs. A strong whitepaper should concisely cover: the problem being solved, proposed solution, technical fundamentals, tokenomics, team credentials, and project roadmap. Careful analysis of these elements helps gauge the project's potential.
TGEs need to be strategically positioned and marketed in the right way to create the right impact, growth, and expansion for the project.
Unless you market your token launch well, no one’s going to know of its existence. Decide your target audience. A TGE usually involves investors, crypto enthusiasts, and users. Cater to their tastes, engage them, and, if needed, involve them in the marketing campaign itself. Use airdrops or other means to reward their marketing contributions.
Invest in good PR. In 2024-25, especially with thousands of memecoins getting launched, there’s a lot of chaos and banter. Leaving a mark in the minds of the investors can be a hard nut to crack.
Marketing can also be a way to reach out to the right people who will ultimately form your community. Token and community are intrinsically tied to the success of a project.
In crypto, the community is the lifeline for any project. Community-led growth is crypto's only sustainable growth model, given its disintermediated setup. Build communities on X, Discord, and Telegram, ensuring two-way communication and rewarding loyalty through airdrops and early access benefits. A strong community not only supports the project but becomes its evangelist—as demonstrated by Galeon, which raised $15 million from 40,000 community contributors. When evaluating a project, examine its community engagement across social platforms to gauge its strength and culture.
There are several ways to conduct a TGE. You could launch your project’s tokens by listing them on a CEX or DEX or issuing them via a launchpad. There can be a public sale, private sale, presale, or even an airdrop.
Listing tokens on CEXs is costly, and listing costs may be 5-20% of the token supply or higher. Besides that, audit fees, security deposits, and token integrations add considerably to the costs. DEXs and launchpads provide cheaper options but have a limited user base.
Anton presents a quick checklist to consider if you are thinking of your token listed on a CEX:
With the stage set, you can proceed with the smart contract code deployment and launch the token on the blockchain to be distributed via a token launch on an exchange or launchpad. Smart contract audits can ensure your code remains bug-free and safe.
Smart contract automation allows tokens to be launched in one go once the code is written. Most tokens today are based on smart contracts, which is the reason tokens can be used in multiple use cases and transparent transactions.
A TGE marks a significant milestone in a project’s roadmap due to its multi-faceted significance.
TGEs can be a great tool to incentivise more users to participate in the ecosystem, ultimately pushing for the adoption of the project. Reciprocally, users can get voting rights, access to exclusive services, and the opportunity to earn passive income via staking and yield farming within the ecosystem. Most blockchains today allow users to stake their tokens and earn returns. Other than that, DeFi opportunities such as staking, liquid staking, and liquidity mining are available to put your tokens to good use.
TGEs accentuate liquidity in two ways. First, by creating hands-on marketing and awareness around the project, And second, by getting the token listed on crypto exchanges for it to reach a wider audience. More hands mean more liquidity.
TGEs are a powerful tool against the traditional VCs. By selling your tokens, you are bringing in additional capital that can crowdfund blockchain innovations and existing initiatives of your project.
Hyperliquid’s airdrop in November 2024 set a precedent for airdrops by allocating $HYPE tokens to a select 94,000. Usually, projects allocate a percentage of a minute to millions of users. In the case of Hyperliquid, the allocation was much higher than other crypto projects–$45,000 on average per wallet!
Most crypto projects allocate a huge percentage of their tokens (around 20%) to VCs; only 5% of token allocation goes to the community. Hyperliquid changed that. You can check out the deep-dive on Hyperliquid and its airdrop by Coingecko here.
ICOs are TGEs but not all TGEs are ICOs.
There’s often confusion about how a TGE differs from its predecessors, such as ICOs, IEOs, and STOs. The goal of different types of token launch events is similar, but TGEs particularly involve the creation and issuance of utility tokens. A utility token is not a security token. ICOs are mostly obsolete, and Only STOs, which are regulated and compliant, can be used to launch security tokens today.
ICOs were only meant to fund early-stage startups and companies. However, TGEs are more versatile and can be used to launch tokens at any stage of the project life cycle. These TGEs can hold different objectives, from raising capital for expanding operations to rewarding contributors or establishing a loyalty program for the community.
Though TGEs don’t come under the regulatory radar yet, they may attract taxes if the tokens are moved between entities such as an off-shore issuer and a US-based company. Tokens transferred as a part of a service or intellectual property agreement (IP) can also be subject to taxes.
Patrick Camuso, CPA, explains in his LinkedIn article how TGEs can be taxable in certain circumstances and things to be kept in mind while dealing with the same.
TGEs are expanding beyond pure Web3 applications. They're now being adopted in real estate projects for property tokenization and by traditional businesses to power loyalty programs and exclusive access systems.
Since TGEs aren’t governed by any law, regulatory challenges and jurisdictional differences in how the token launch is legally treated may complicate matters.
Market volatility, project viability, and security robustness are some of the features that indirectly determine the health of the project and, subsequently, the price performance of the token. The trustworthiness of the team is also crucial for a TGE to be successful and a token to remain sustainable.
These days, most projects have high FDV/low float, which makes the project overpriced against limited circulating supply. When more tokens enter the market, the token starts dumping and loses its value ultimately.
After their TGEs, tokens like $BLUR and $BLAST lost considerable value despite being backed by VCs. To avoid such instances, always DYOR and stay away from projects selling false narratives. Mmecoins all have an MC/FDV ratio lower but we know why they are the biggest narrative.
Gigi De Vries, CEO of Unknown Ventures, emphasizes the importance of sustainable tokenomics: "𝘗𝘳𝘰𝘫𝘦𝘤𝘵𝘴 𝘴𝘩𝘰𝘶𝘭𝘥 𝘥𝘦𝘴𝘪𝘨𝘯 𝘵𝘩𝘦𝘪𝘳 𝘵𝘰𝘬𝘦𝘯𝘰𝘮𝘪𝘤𝘴 𝘤𝘢𝘳𝘦𝘧𝘶𝘭𝘭𝘺, 𝘤𝘰𝘯𝘴𝘪𝘥𝘦𝘳𝘪𝘯𝘨 𝘵𝘩𝘦 𝘮𝘢𝘤𝘳𝘰 𝘦𝘯𝘷𝘪𝘳𝘰𝘯𝘮𝘦𝘯𝘵 𝘵𝘰 𝘱𝘳𝘦𝘷𝘦𝘯𝘵 𝘧𝘶𝘵𝘶𝘳𝘦 𝘴𝘶𝘱𝘱𝘭𝘺 𝘴𝘩𝘰𝘤𝘬𝘴. 𝘛𝘩𝘦 𝘮𝘰𝘳𝘦 𝘷𝘪𝘢𝘣𝘭𝘦 𝘵𝘩𝘦 𝘱𝘳𝘰𝘥𝘶𝘤𝘵, 𝘵𝘩𝘦 𝘧𝘢𝘴𝘵𝘦𝘳 𝘪𝘵 𝘤𝘢𝘯 𝘨𝘦𝘯𝘦𝘳𝘢𝘵𝘦 𝘳𝘦𝘷𝘦𝘯𝘶𝘦 𝘢𝘯𝘥 𝘢𝘵𝘵𝘳𝘢𝘤𝘵 𝘵𝘰𝘬𝘦𝘯 𝘥𝘦𝘮𝘢𝘯𝘥 𝘵𝘩𝘳𝘰𝘶𝘨𝘩 𝘢𝘤𝘵𝘶𝘢𝘭 𝘱𝘳𝘰𝘥𝘶𝘤𝘵 𝘮𝘢𝘵𝘶𝘳𝘪𝘵𝘺."
If you are looking to invest in a TGE, Do not commit your funds to any project without conducting due diligence and doing your own research. Here are a few things users can look into before investing in a TGE.
Omar Moonis, Founder of Story of DeFi and Ex-Head of Business Development at TRM Labs, warns about token distribution: "𝘈 𝘮𝘢𝘫𝘰𝘳 𝘳𝘦𝘥 𝘧𝘭𝘢𝘨 𝘸𝘰𝘶𝘭𝘥 𝘣𝘦 𝘪𝘧 𝘵𝘰𝘰 𝘮𝘢𝘯𝘺 𝘵𝘰𝘬𝘦𝘯𝘴 𝘸𝘦𝘳𝘦 𝘨𝘪𝘷𝘦𝘯 𝘵𝘰 𝘵𝘩𝘦 𝘍𝘰𝘶𝘯𝘥𝘪𝘯𝘨 𝘛𝘦𝘢𝘮 𝘰𝘳 𝘵𝘰 𝘪𝘯𝘴𝘪𝘥𝘦𝘳𝘴 𝘤𝘰𝘯𝘯𝘦𝘤𝘵𝘦𝘥 𝘵𝘰 𝘵𝘩𝘦𝘮. 𝘛𝘩𝘪𝘴 𝘤𝘢𝘯 𝘮𝘢𝘬𝘦 𝘵𝘩𝘦 𝘵𝘰𝘬𝘦𝘯 𝘳𝘪𝘱𝘦 𝘧𝘰𝘳 𝘪𝘯𝘴𝘪𝘥𝘦𝘳 𝘮𝘢𝘯𝘪𝘱𝘶𝘭𝘢𝘵𝘪𝘰𝘯, 𝘪𝘮𝘱𝘢𝘤𝘵 𝘮𝘢𝘳𝘬𝘦𝘵 𝘭𝘪𝘲𝘶𝘪𝘥𝘪𝘵𝘺, 𝘢𝘯𝘥 𝘴𝘪𝘨𝘯𝘢𝘭 𝘵𝘩𝘢𝘵 𝘵𝘩𝘪𝘴 𝘱𝘳𝘰𝘫𝘦𝘤𝘵 𝘪𝘴𝘯'𝘵 𝘧𝘰𝘤𝘶𝘴𝘦𝘥 𝘰𝘯 𝘤𝘳𝘦𝘢𝘵𝘪𝘯𝘨 𝘱𝘶𝘣𝘭𝘪𝘤 𝘷𝘢𝘭𝘶𝘦."
Moonis breaks down the red flags to look for in a token before investing in his LinkedIn post.
If the team is anonymous, there’s no way you should trust the project. A dig into the founders’ past projects' career trajectories might give you an idea of whether the project would be worthwhile or not. Check how extensive the team is and whether the developer team is in-house. Experienced founders can help sail the project forward and win through tough times. Be fully informed about the good and bad aspects of the project.
Memecoins - you know they lack utility and might even be the next pump and dump. But If it is a blockchain or a dApp claiming to change the Web3 landscape and lacks even the necessary audits and technical documentation, you know there’s something fishy.
Check around compliance and what regulatory landscape that project falls into. No one wants to invest again in an FTX scandal or UST-like stablecoin. Also, take note of the competitors. For instance, another proof of stake or proof of work blockchain with ETH or BTC-like features would do no good unless they present a better tech and use case. For instance, Solana, Sui, Base, and many L2s offer better speed and economy.
Study this deep dive: The 𝘈𝘪𝘳𝘥𝘳𝘰𝘱 𝘗𝘭𝘢𝘺𝘣𝘰𝘰𝘬 𝘈𝘯𝘥 𝘏𝘰𝘸 𝘛𝘰 𝘎𝘦𝘵 𝘐𝘵 by Ayush Ghiya and Arjun Mukherjee to gain insights into what makes a successful TGE.
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Several trends and innovations are shaping the future of TGEs, including Token Warrants— agreements granting investors the right to buy tokens at a predetermined future time. This innovation helps attract early-stage investment while maintaining compliance. Major brands like Nike, Starbucks, and Microsoft are also embracing blockchain utility through token launches for different perks and campaigns.
Real estate and other sectors where tokenisation is bringing true innovations will also benefit from TGEs in the long run. And who can forget the biggest narrative of 2024 and 2025? All throughout 2024, we saw hundreds of thousands of token launches being conducted. TGEs, given their ease and simplicity of implementation, are opening new avenues for Web3/Web2 marriage.
Head over to NFT.EU to read more such insightful posts!
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