The Stages and Impact of a Token Generation Event (TGE)

What is a Token Generation Event?

A Token Generation Event (TGE) is the moment when a digital asset is ”born” on the blockchain.

Before that, tokens exist only in documents and become ready for use after the TGE. The first appearance on the blockchain is the deployment of a smart contract and the issuance of coins—these are the initial stages of a crypto project's lifecycle. These actions can be considered a legal fact under agreements like SAFT.

Previously, the term TGE was used in the context of fundraising and initial coin offerings (ICO). At that time, the proper conduct of token issuance was important not only from a technical point of view but also for investor confidence—the reputation of the project depended on a transparent and well-thought-out launch. Many early startups in the blockchain industry suffered precisely because of problems at the stage of asset generation and distribution.

In modern usage, TGE does not need to be qualitatively evaluated. A token generation event simply reflects the fact that an asset has been created, except in rare cases of technical failures during the procedure.

What phases does TGE consist of?

The TGE process typically involves several sequential phases:

• Token creation: Developing a smart contract on the Ethereum blockchain, Solana, BNB Chain, or other networks.

• Auditing: Conducting independent code reviews to identify and fix vulnerabilities.

• Tokenomics: Determining the percentage of project shares between the team, investors, reserve fund, and holders in staking.

• Generation and distribution: Issuance of tokens according to the previously specified tokenomics. Vesting (deferred distribution) mechanisms are often used at this stage.

• Exchange listing (optional): Often, a TGE is accompanied by a token placement on a CEX or DEX to ensure liquidity.

The first example of a major TGE was Ethereum—it took place in 2015, shortly after the ICO.

In 2023, there was an airdrop distribution for early participants in the L2-network Arbitrum. ARBs were branded on demand after the TGE. In 2024, the DePIN project Grass Network gave away GRASS tokens, which were listed on exchanges, to over a million users.

What are the different forms of TGE?

Web3 researcher Vladimir Menaskop proposes the following classification of TGEs:

• Smart contract on explorer: Often used for testnets when you need to quickly brand an asset.

• Creating a faucet with a visual interface: This was popular at the dawn of the cryptocurrency era; today, it is used mainly for test networks or community tokens.

• Airdrops: This method was used, for example, in a giveaway from Hyperliquid: tokens were credited directly to accounts—the platform's wallets. A more current approach is the retrodrop via branding on the official site, as used by the Optimism and Jupiter teams.

• Listing on exchanges: Listing on CEX and DEX.

• Lockers: Through wrappers (e.g., wNFT) or other means, tokens are placed in a vault and remain there until the vesting and cliff deadlines are reached.

• Mining: Carried out by equipment or software like Hamster Combat or Blum. The mechanics of monetizing actions and their subsequent tokenization are used.

TGE, as the physical act of an asset appearing on the blockchain, in further stages of tokenomics is expressed in different forms of public interaction: with the team, community, and investors.

The main types of asset placement after TGE:

• Initial Coin Offerings (ICO): ICO is one of the first and most popular crowdfunding methods in the cryptocurrency industry. It involves a project selling tokens to investors to raise capital. The funds raised are then used to finance the development and implementation of the project. This is how Ethereum tokens were presold in 2014.

• Initial DEX Offerings (IDO): Placement of tokens on DEX provides a more decentralized and community-oriented way to raise funds. These offerings tend to be more accessible and transparent, as they do not rely on centralized structures.

• Initial Exchange Offerings (IEO): Token offerings on CEX. Assets are offered to investors directly through CEX, which acts as an intermediary. On the one hand, this TGE format is considered more reliable, since the exchange usually conducts verification before listing a token. On the other hand, due to the actions of AMM, there is a high percentage of projects ”buried” after listing on trading platforms like Binance. In addition to exchanges, there are special platforms (launchpads) like Binance Alpha. They are designed to conduct IEOs and allow participation using Web3 wallets.

How is TGE used on Whales Market, Binance Alpha, and other platforms?

In the crypto market, there are examples of using the pre-TGE form of selling digital assets—pre-TGE. The format gained popularity in 2024; one of the first projects in this segment was Whales Market.

Pre-sale token transactions originated in traditional finance and can be described by the term Pre-Market Offerings (PMO). This refers to the procedure of offering securities to investors before the start of the trading session on the exchange. In essence, it is a pre-trade of tokens that will become available after the TGE.

The Whales Marketplace offers trading of tokens declared by projects without circulation on the open market. This process involves increased risk but offers the possibility of additional profits.

At the end of April 2025, crypto exchange Binance introduced a new system for participating in TGEs via Binance Wallet and receiving airdrops—Alpha Points. The latter are issued for holding assets on the exchange and/or wallet and for trading volume on the Binance Alpha platform.

Points are awarded every day for activity within the last 15 days. Points older than this period are automatically deducted. Additionally, the Alpha Point deduction mechanic has been introduced—15 points are charged for participating in a TGE or receiving an airdrop.

On May 15, 2025, it was reported that aggregator CoinMarketCap launched a platform for ”pre-TGE campaigns.” The CMC Launch is focused on projects that have yet to conduct a token issue. Users are encouraged to complete tasks and earn rewards.

How does TGE affect the further development of the project?

TGE is not only the moment of token creation but also the starting point for building the economy and community around the project. A successful TGE provides many benefits but also imposes certain obligations:

• Generated tokens become an incentive tool for participants—users can be rewarded, developers can be motivated, and governance votes can be organized. For example, in DAOs, they often give the right to vote.

• Tokens allow a project to go public, which attracts liquidity and new investment. Active turnover maintains interest and stimulates development.

• Community formation: Token owners become interested in the success of the startup, forming a core of loyal users and participants. This is especially important for developers who rely on decentralized management and cooperation.

However, it should be remembered that after the TGE, a new stage begins—support and development. Projects are obliged to fulfill promises and develop the product. Without this, even the most successfully executed generation event may not lead to long-term success.

Despite the importance of TGE, this stage comes with many risks that can affect the fate of the company:

• High volatility: In the first days after tokens are generated, their price can fluctuate dramatically due to low liquidity and speculation. For example, many projects experienced a rapid decline when large holders ”dumped” their tokens.

• Concentration of tokens in a small number of individuals: When assets are controlled by only a few investors or a team, there is a high probability of market manipulation, which causes distrust in the community.

• Technical errors: Technical errors in smart contracts at the TGE stage can lead to loss of funds.

• Regulatory risks: Different countries may characterize tokens as securities and TGE as illegal fundraising. This creates additional legal uncertainty.