Token Generation Event (TGE) Definition
A Token Generation Event (TGE) is a process where a cryptocurrency or digital token project sells part of its cryptocurrency tokens to early adopters and enthusiasts in exchange for money today. TGEs are typically used to fund the development of a new blockchain project or cryptocurrency.
Token Generation Event (TGE) Key Points
- A TGE is essentially a type of fundraising mechanism where new projects sell their cryptocurrency tokens in exchange for bitcoin or ether.
- It is similar to an Initial Coin Offering (ICO) but differs in its legal standpoint and is more compliant with applicable regulations.
- The funds raised through a TGE are typically used to accomplish project development and marketing.
What is a Token Generation Event (TGE)?
The TGE, also known as a token sale, is a process for blockchain projects to raise capital in the form of cryptocurrency by selling their own tokens. The event occurs before the project’s full launch and helps the team to cover everything from marketing and development costs to other operational expenses.
Why Do Projects Carry Out a TGE?
The primary reason that projects carry out a TGE is to raise capital. Unlike conventional fundraising methods such as seeking angel investors or launching an Initial Public Offering (IPO), conducting a TGE allows blockchain startups to access financing directly from future users of their platform. This enables these startups to bypass traditional financial and banking channels, in favor of a method more suited to their decentralized ethos.
When is a TGE Carried Out?
A TGE is typically carried out in the early stages of a blockchain project. It occurs after a successful pre-sale phase, which aims to generate initial investment and excitement among dedicated fans and investors. Following successful completion of the TGE, tokens are usually distributed to participants.
Who Conducts a TGE?
TGEs are generally conducted by blockchain startups and projects that are working on creating a new digital currency, platform, or service. A team comprising of experienced blockchain developers, entrepreneurs, and sometimes marketing experts, is usually behind conducting a TGE.
How is a TGE Carried Out?
A TGE begins by presenting a whitepaper that explains the technical aspects and goals of the project. Interested investors then buy some of the project’s tokens with existing digital currencies. This fund is then used to boost the blockchain project, and tokens could potentially gain value if the project becomes successful.
