TGE in crypto: how token issuance and distribution work in blockchain

Key Point: What is Behind the Abbreviation TGE

Token Generation Event (TGE) is the process of creating and distributing digital assets on the blockchain for the target user audience. Despite the similarity of terms TGE and ICO in the crypto community, there is a fundamental difference in their goals and implementation mechanisms. In short, TGE focuses on issuing functional tokens that support the operation of the project’s ecosystem, whereas ICO is more often used to attract investments through the sale of crypto assets.

During a TGE, tokens are created on the project’s blockchain and then transferred to users, granting them access to the functions and features of the decentralized platform. The tokens created are mostly utility tokens—they are used for governance, payments within the platform, staking mechanisms, and other purposes programmed via smart contracts. Events of this scale always attract the attention of the crypto community, especially when it involves well-known decentralized applications (DApp).

How TGE Calculations Differ from a Classic ICO

Although both models aim to issue digital assets, there are significant differences:

Purpose and Function. ICOs are traditionally conducted to raise capital for project development, acting as a primary public offering in the digital space. TGE, on the other hand, is aimed at distributing functional tokens that serve as tools for interacting with the ecosystem. However, some projects also use TGE to raise funds but label it as the issuance of utility tokens rather than securities—this distinction has legal significance.

Asset Status. ICOs often issue coins that regulators may classify as securities. This attracts increased regulatory scrutiny. Conversely, TGEs are associated with the issuance of utility tokens, which theoretically can avoid securities classification.

Main Goals a Project Pursues When Launching a TGE

Expanding the User Base and Increasing Engagement

Creating and distributing tokens acts as a powerful incentive to attract new participants. If the project already has a core group of early users, issuing tokens can significantly boost interest in the platform. Asset distribution provides people with a material incentive—the tokens themselves, necessary for functioning within the ecosystem.

Token holders gain a range of rights and benefits defined by smart contracts. For example, they may be granted voting rights in project decision-making, with voting weight depending on the number of tokens held. Alternatively, participants can stake their assets to earn rewards, thereby increasing their capital.

Attracting Investment and Strengthening the Community

TGE attracts capital and human resources. Enthusiasts and developers’ interest in the TGE event leads to an influx of new like-minded individuals who can contribute innovative ideas and support the long-term growth of the token’s value. A strong and active community is not just a marketing component but a real driver of the project’s development.

Increasing Trading Liquidity of the Asset

When tokens start circulating on cryptocurrency platforms after the TGE, trading volume and asset liquidity sharply increase. High liquidity stabilizes the price, promotes fairer price discovery between buyers and sellers, and makes the asset more attractive to investors.

How to Properly Assess the Prospects of an Upcoming Token Generation

If you plan to participate in a TGE, it’s essential to conduct your own thorough analysis before investing time and money:

Start with the whitepaper. This is the main document containing comprehensive information about the mission, technological solutions, development roadmap, team composition, and token economics. It also provides clues about the project’s role within the Web3 ecosystem.

Evaluate the team and founders. Study the previous experience of the project’s creators. Do they have successful cases in this field? What specialists are involved in key positions? The experience and competence of the team are among the key success factors.

Check public opinion. On social media (X) and thematic chats ###, you can find objective assessments of the project from developers and ordinary users. Community activity and discussion quality will give you a comprehensive understanding of the project’s strengths and weaknesses.

Study risk factors. Pay attention to potential competitors in this segment, the regulatory environment around the project and the entire crypto industry. Understanding current and future compliance requirements is critically important.

Real Examples of Successful TGE in the Market

Uniswap and the Launch of the UNI Governance Token

Decentralized exchange Uniswap, launched in 2018, conducted its token generation in September 2020 with the release of the governance token UNI. One billion units were created at launch, with a distribution plan over four years until September 2024. UNI holders gained voting rights in the project’s ecosystem decisions. Simultaneously, a liquidity provider incentive program was launched, where participants received UNI rewards for using their funds in four key trading pairs. As of 2026, the price of UNI is $5.45.

Blast: Layer 2 Solution for Ethereum with Its Own TGE

Layer 2 solution Blast for Ethereum held its own event on June 26, 2024. The preliminary creation of the BLAST token occurred four days prior, with tokens distributed via airdrop among users who transferred Ether or USDB to the Blast network, as well as those interacting with decentralized applications on the platform. TGE participants received 17% of the total BLAST issuance.

Ethena and the Revolution of Synthetic Assets

The Ethena project, which transformed the decentralized finance landscape with its synthetic dollar USDe, launched its governance token ENA on April 2, 2024. The airdrop targeted shard holders earned through activity in the ecosystem. As of now, the price of ENA is $0.23.

Main Risks to Know Before Participating

The most serious risk of a TGE is rug pull schemes, where project creators artificially inflate the price and then sharply withdraw liquidity, leaving other holders at a loss. To minimize this danger, thorough research of the project, reputation checks of the team, and analysis of their activity history are required.

No income is guaranteed from participating in a TGE. The crypto space by nature is volatile and risky. The main motivation for TGE is ecosystem development and user base growth, not guaranteed profit for participants.

Summary: Why Track TGE Events

Token generation is a key stage in a project’s development and a potential catalyst for its expansion, increased liquidity, and sometimes capital raising. TGE often serves as a way to reward early supporters who helped develop the ecosystem in its initial stages. This event, which attracts the entire crypto community’s attention, marks the project’s transition to a new level.

If you believe in the long-term potential of a specific project, it makes sense to follow its TGE announcements. It’s an opportunity not just to acquire tokens but to become an active participant in the growth of the project you support.