Token Generation Event (TGE)
Beginner
What Is a Token Generation Event (TGE)?
A token generation event (TGE) is a crowdfunding method used by blockchain projects and companies to raise funds. It’s a way to get support from early supporters while launching their crypto tokens.
Although the term TGE may refer to different types of token launches and crowdfunding events, TGEs are often related to the launch of utility tokens, which are digital assets tied to specific products, services, or decentralized applications (DApps).
To better understand TGEs, it’s worth exploring the concept of initial coin offerings, which was a very popular crowdfunding method between 2014 and early 2018.
Initial Coin Offerings (ICOs)
Initially, the term ICO was strictly used to refer to the launch of native coins, i.e., cryptocurrencies that were being built and set to launch on their own blockchain networks. However, with the rising popularity of Ethereum, several projects launched their ERC-20 tokens through so-called ICO events, even though they were launching tokens instead of native coins.
ICO vs. TGE
When it comes to TGEs and ICOs, the terminology can be confusing. Many present them as different crowdfunding methods, but since many ICOs were done to launch tokens and not coins, some consider ICOs a type of TGE.
While both methods have similar goals, TGEs are usually focused on the creation and issuance of utility tokens. In general, these tokens are not considered a security offering because they are tied to a particular product or use case (e.g., access to subscription-based services, decentralized cloud storage, voting systems, etc.). ICOs, on the other hand, are often linked to security token offerings, which can lead to increased pressure from regulatory agencies.