What is TGE? A complete guide to the cryptocurrency token generation event

Deep Understanding of the Essence of Token Generation

In the crypto ecosystem, the true meaning of TGE (Token Generation Event) is often misunderstood by newcomers. Simply put, a TGE is the moment when a blockchain project creates and distributes its native tokens to users. This is not only a technical process of token on-chain issuance but also the beginning of establishing economic relationships between the project and the community.

Unlike the common ICO (Initial Coin Offering), TGE emphasizes the distribution of functional tokens rather than purely raising funds. Although both involve token issuance, TGE typically releases governance tokens or ecosystem tokens, which grant holders participation rights and profit-sharing rights within the project. In contrast, ICOs focus more on fundraising.

What Can TGE Really Bring?

Many project teams choose to hold a TGE mainly for the following reasons:

Attract User Participation
Token distribution itself is a powerful incentive signal. Through TGE, projects can reward early supporters with tokens, encouraging them to engage more deeply within the ecosystem. Imagine if you received an airdrop for supporting a project early on—you would be more motivated to use the services provided by that project.

Enhance Token Liquidity
Once tokens are distributed via TGE and enter the market, market depth and trading activity will significantly increase. Stronger liquidity means easier buying and selling, and more stable prices. This is crucial for the long-term development of the project.

Enable Community Governance
Many tokens distributed through TGE have governance functions—holders can vote on major project decisions. This establishes a more democratic and transparent operational mechanism, strengthening community cohesion.

Support Ecosystem Operations
Besides governance, tokens can be used for paying for services within the ecosystem, staking for rewards, and more. This makes tokens the lifeblood of the ecosystem, driving the normal operation of the entire system.

Three Case Studies to Understand the Practical Applications of TGE

Uniswap’s UNI Token Incident

In September 2020, decentralized exchange Uniswap launched its historic TGE. The project created 1 billion UNI tokens, planned to release gradually over four years. The clever part was that it also activated a liquidity mining program—users providing liquidity to four specific trading pairs could earn UNI rewards. At that time, UNI was priced at $5.37, and this event propelled Uniswap into the DeFi boom.

Blast Breaks New Layer 2 Paradigm

On June 26 of this year, Ethereum Layer 2 solution Blast conducted a highly anticipated TGE. Interestingly, the project completed mainnet minting and initial distribution of BLAST tokens four days before the TGE. In this event, users who deposited ETH or USDB into Blast, or interacted with the platform’s DApps, received 17% of the total supply. BLAST is currently priced at $0.00 (very low), indicating the project is still in early stages.

Ethena’s ENA Incentive Innovation

On April 2, Ethena’s ENA TGE was another noteworthy case. Ethena rewards loyal users through its unique “Shard” system—participants in various ecosystem tasks accumulate Shards, which they can receive during the TGE to get 7.5 million ENA tokens. ENA is currently trading at $0.23, reflecting market recognition of its synthetic stablecoin model.

Essential Preparations Before Investing in TGE

Heard that a project is about to conduct a TGE and want to participate? Before investing your time and funds, you should do the following:

Step 1: Read the Whitepaper
The project team must publish an official whitepaper or documentation. This document should clearly explain the project’s goals, technical solutions, roadmap, team background, and tokenomics. If the project lacks comprehensive documentation, just pass.

Step 2: Investigate Founders and Team
The team’s background and experience often predict the project’s success or failure. Founders with real-world entrepreneurial experience and good industry reputation are generally more reliable than “airdrop” teams. Check their LinkedIn, GitHub, or previous project history.

Step 3: Engage with Community Forums
Join the project’s X (Twitter), Telegram groups, and observe community atmosphere and discussion quality. Authentic community voices are often more valuable than official propaganda. Ask sharp questions to see how the team responds, which also helps assess their professionalism.

Step 4: Assess the Risk Environment
Understand the regulatory landscape of the project’s domain and whether it faces legal risks. Also analyze the competitive landscape—whether the sector is oversaturated and what the project’s unique advantages are.

Pitfalls to Watch Out For

Although TGE is generally a positive event, risks also exist:

“Pull-the-Rug” Risk is the Deadliest
After releasing tokens, project teams may quickly sell off their holdings for profit, causing prices to plummet and ordinary participants to lose everything. Such scams are especially common in bear markets, so thorough verification of the team’s authenticity is crucial.

No Profit Guarantees
The crypto market is highly volatile; participating in TGE does not guarantee profits. Token prices are influenced by market sentiment, macroeconomic factors, and more. View TGE as an investment opportunity, but don’t expect to get rich overnight.

Not All Projects Need Tokens
Not every blockchain project must issue tokens. Some projects can achieve their functions through traditional methods. Forcing tokenization can add complexity and risk without necessity.

Summary

TGE is a common phenomenon in the crypto ecosystem and a key milestone for projects transitioning from concept validation to market application. From Uniswap’s DeFi empowerment, Blast’s Layer 2 promotion, to Ethena’s innovative incentive mechanisms, these cases demonstrate the importance of TGE in project development.

If you believe in a project’s long-term prospects, it’s wise to closely monitor its TGE schedule. But make sure to do your homework—study the whitepaper, investigate the community, and evaluate risks. On mainstream trading platforms like Gate.io, you can track the latest developments and token movements in real-time. Remember: in crypto investing, knowledge is your best shield.