How crypto projects distribute tokens: a practical guide to asset generation events

Token generation and distribution are key moments in the development of crypto projects. The (TGE) event occurs when a project officially releases its digital assets to a broad user base, opening access to the ecosystem and encouraging active participation.

Why TGE plays such an important role in the crypto industry

Projects turn to TGE for several practical reasons. The first and most obvious is attracting new users. When tokens become available, interest in the project significantly increases, as people see real opportunities for involvement. The second reason is related to stimulating activity: by receiving tokens, users gain a specific resource to interact with the platform, including voting rights in governance issues or the ability to earn rewards through staking.

Liquidity and capital are equally important. Distributed tokens often end up on exchanges where they can be freely traded. This ensures sufficient liquidity, stabilizes prices, and attracts investors. For the projects themselves, TGEs can be an effective tool for raising funds for further development and innovation.

Differences between TGE and initial coin offering: why it matters

Although TGE and ICO are often used as synonyms, there are significant differences. ICO is a broader category aimed primarily at raising funds. During an ICO, the project issues coins that may be subject to regulatory oversight and considered securities.

TGE, on the other hand, focuses on distributing utility tokens — assets that grant specific rights and privileges within the ecosystem. Some projects deliberately choose the term TGE instead of ICO to avoid potential regulatory issues. A utility token is a clearer signal that the asset is not a means of wealth accumulation in the traditional sense but a tool for working within a specific network.

Practical examples of successful token generation events

Uniswap (UNI) — a model to follow

In September 2020, the decentralized exchange Uniswap released one billion governance tokens UNI. This was a pivotal moment for the project. Tokens were planned to be distributed over a four-year period, ending in September 2024. UNI holders gained voting rights in platform governance, with each user’s influence depending on the number of tokens held. Simultaneously, a liquidity mining program was launched, where participants could earn UNI as rewards for providing their crypto assets to designated pools. The current price of UNI is $5.45, demonstrating the potential of tokens with clear utility.

Blast (BLAST) — quick L2 launch

The second-layer solution for Ethereum — Blast — conducted its TGE on June 26, 2024. Prior to this, the BLAST token was minted directly on the Blast network four days earlier. Users who had previously interacted with the platform (by connecting Ether or USDB, using decentralized applications), were allocated 17% of the total token supply. This approach reaffirmed the principle of rewarding beta testers and early supporters of the project.

Ethena (ENA) — reward for task completion

The Ethena protocol, which introduced the innovative synthetic dollar USDe, launched its TGE on April 2, 2024. The project distributed 750 million governance tokens ENA among participants actively completing tasks within the ecosystem. This mechanism shows how TGE can be used to reward users involved in the platform’s development from the early days. The current price of ENA is $0.23, reflecting the project’s steady growth.

How to evaluate a TGE before participation: a practical checklist

If you’ve heard about an upcoming token generation event and want to participate, start with thorough research (DYOR). The first and most important step is to study the project’s official document. It should contain detailed information about goals, technology, development plans, team composition, and tokenomics. Pay particular attention to what exactly the project offers in the Web3 space.

Second, inquire about the founders and team. Experienced founders with a solid track record in the industry are a positive signal. If the team consists of individuals with real achievements in technology or finance, the chances of project success are higher.

Third, focus on social media. On X or Telegram groups, you will get a true picture of how the crypto community perceives the project. Active discussion, constructive criticism, and transparent responses from developers are good signs.

Finally, assess the risk landscape. Research regulatory situations, competition in the segment, and potential threats. This will help you identify possible issues before participating.

Main risks and real opportunities

Risks associated with TGE should not be ignored. One of the biggest is the phenomenon of “rug pull” (rug pull), where founders issue tokens, artificially inflate their price, and then suddenly exit with capital, leaving ordinary investors with worthless assets. This underscores the importance of thorough research before participation.

It’s also crucial to understand that participating in a TGE does not guarantee profit. The crypto industry is inherently volatile, and the token’s value can both rise and fall. However, well-chosen projects with clear utility and an active community often demonstrate long-term potential.

Which projects use TGE and which do not

Not all crypto projects conduct TGE. Some operate without their own token, such as pure blockchains or specialized tools. However, for most modern decentralized applications, a token is a core part of the architecture. Therefore, TGE and ICO remain common phenomena in this space.

If you are considering long-term investments in specific crypto projects, it’s advisable to monitor their TGEs as potential entry points. This allows you not only to acquire tokens but also to actively support the development of the ecosystem that interests you. Early TGE participants often gain the most benefits through incentive and governance programs, making it a good opportunity for early adopters.

Frequently asked questions about token generation events

What is the main difference between TGE and ICO?

TGE focuses on distributing utility tokens to users, whereas ICO often serves to raise funds through asset sales, similar to an initial public offering. Projects choose the term TGE to avoid regulatory associations.

Do I need to participate in a TGE to invest in a project?

No. You can invest in tokens after the TGE when they are listed on exchanges. However, early participants often receive additional incentives and more favorable conditions.

Do all crypto projects conduct TGE?

No, but most decentralized applications and platforms use this mechanism to launch and develop their ecosystems.