What is really happening with TGE: debunking myths and reality

If you follow crypto news, you’ve probably heard about TGE (Token Generation Event). But what is it actually? And why is everyone chasing after them?

The Main Points

A TGE is the moment when a project creates and distributes its tokens to users. Sounds simple? In reality, there’s an entire ecosystem strategy behind it.

Important note: TGE ≠ ICO. Although they’re often confused.

ICO is about raising money (like an IPO in traditional finance). The project sells tokens to investors, raises capital, and that’s it.

TGE is the launch of a utility token for governance and access to the ecosystem. The goal is different: attract users, reward early supporters, increase liquidity.

Projects often choose TGE instead of ICO because regulators view ICOs as securities. And a TGE is just a utility token distribution.

Why do projects do this at all?

1. Attract people

Your platform is beautiful, the code is good, but nobody’s there. TGEs help attract the first users. People see a token, get curious, and join the ecosystem.

2. Reward early supporters

Some people believed in the project before there was a token. An airdrop is a way to say thanks. Example: In April 2024, Ethena sent 750 million ENA tokens to those who participated in the ecosystem earlier.

3. Decentralize governance

Tokens with voting rights = the community speaks, not just the founders. In 2020, Uniswap gave control of the decentralized exchange to UNI holders.

4. Liquidity and staking

Once the token launches, it can be traded, staked, and earn rewards. High liquidity stabilizes the price.

How to evaluate a TGE before getting involved?

Read the whitepaper. It should have goals, technology, roadmap, and tokenomics info. If the document is vague or incomplete, that’s suspicious.

Check the founders. Do they have experience? Any successful past projects? Who did they bring on the team? Anonymous people in masks are usually a bad sign.

Hang out on socials. X, Telegram groups. What are experienced people saying? What questions are being asked? An active community is a good indicator.

Think about risks. The biggest danger is a rug pull. The founder pumps the price, takes the liquidity, and disappears. The project dies, your money is gone. To avoid this: do thorough team checks, review contract logic, and assess the reputation.

Examples That Worked

Uniswap (September 2020) A DEX without a token? Strange. But when UNI launched, it was a bombshell. A billion tokens, four-year distribution, users got rewards for providing liquidity. Result: the DeFi revolution.

Blast (June 2024) An Ethereum Layer 2 that pays for staking. The TGE was for those already in the network. 17% of all BLAST were distributed. Simple and fair.

Ethena (April 2024) The synthetic dollar USDe turned DeFi upside down. The airdrop went to shard holders who were active in the ecosystem.

Final Takeaway

A TGE is not a guarantee of wealth. It’s a tool that can work—or not work. It all depends on the project, the team, the idea, and the market.

If you believe in the long term, keep an eye on upcoming TGEs. But don’t go in blindly. Do your homework, ask questions, read contracts. Crypto is full of traps, and TGEs are a popular place for them.

And remember: in crypto, no one owes you anything. The risk is all yours.