What is TGE (Token Generation Event)? Explained for Beginners

A Token Generation Event is the most pivotal point in the entire cycle of a cryptocurrency system. This is the point where it creates and distributes its own native tokens to its users. Users can be selected by the project developers at their own discretion. There are also projects where the tokens are released to the general public.

 Even though Token Generation Events are often misunderstood as Initial Coin Offerings (ICOs), they are quite distinct from each other. The primary objective of an Initial Coin Offering is fundraising. Meanwhile, technical release and initial token utility become the major goals of a Token Generation Event. Hence, Token Generation is performed when the crypto project is all set to announce the usability of their tokens. 

Token Generation events cannot be conducted soon after the project launch. It might take a couple of months to finally announce the usability and then conduct a Token Generation Event (TGE). During this developmental phase, smart contract audits and ecosystem maturation will be given priority. 

Now comes the distribution part of the generated tokens. This is done through a variety of channels to a couple of different recipients. Early investors, team members, and strategic members are given priority during the first phase of distribution. Launchpool campaigns, airdrops, launchpools, and public sales are some of the popular channels through which the event takes place. 

The Importance of Token Generation Events

The importance of Token Generation Events is not just limited to the launch of the tokens in the public domain. It is more than just a launch since it becomes the token’s initiation of operations in the public blockchain economy. For both the investors and the creators, this event thus becomes a crucial one. In the following bullets, you will get to know about all the functionalities, utilities, and importance of the token in the most comprehensive manner. 

• Utility Activation 

The true potential of the token is activated soon after the Token Generation Event (TGE), and this is termed Utility Activation. The features such as staking, governance, and platform feature access can only be unlocked after this. Paying for varied services using the token also comes under the utility activation. 

• Liquidity and Trading 

The fundamental function of the tokens, such as trading, buying, and selling assets, also requires a Token Generation Event to kick-start their functions. You can perform all these transactions in Decentralized Exchanges (DEX) and Centralized Exchanges (CEX) only after a TGE. For risks tied to crypto trading, see the CFTC’s customer advisory on virtual currencies.

• Price Setting 

A Token Generation Event lets the entry of the token into the market scenario. This decides the value of the token as per how the market receives and perceives them. The demand, scarcity, and speculative value are some of the determining factors leading to the price setting of a particular token. 

• Boosts engagement

This is another important aspect of a Token Generation Event. Soon after the generation of the token, the people associated with the development get a space to engage in the internal ecosystem and the public blockchain economy more directly. 

TGEs: A Trump Card for Crypto Users 

Now that you have understood everything related to a Token Generation Event and its importance in the real-time blockchain ecosystem. Now, it is time to get you introduced to the inevitable relationship between Token Generation Events and Crypto users. If you are someone who is completely new to both these systems, or if you are someone with Crypto experience but not much into TGEs, this is going to benefit you immensely. Understanding the relationship between these two can be a real trump card for you to ace the journey of trading in the smartest way possible. 

• Predict Wisely 

If you can get involved with Token Generation Events, you will be able to have tokens at a relatively lower price. And if you are good at speculating the value of the tokens in the market scenario, you can invest better and make huge returns within a short span of time. Launchpools, community campaigns, and presales associated with TGEs are something the crypto people should never miss out on. 

Find guides on token presales and community campaigns.

• The Art of Evaluation 

It is also important to take note of the risks associated with the tokens. The Volatility of the tokens can drain your investment. Hence, make sure you do proper research work before getting into TGEs and buying tokens during their sales. Going through the whitepapers, tokenomics, and contracts thoroughly before investing can be a saviour in this regard. 

For investor protection, see the SEC’s statement on crypto asset offerings

Conclusion 

That is all you need to know about Token Generation Events (TGEs). More than just getting to know the basics about a TGE, now you have also got a clear frame about how to deal with it most productively. Now all you have to do is try your hand at a TGE for real and make the most out of it.