What is TGE in crypto: definition and advantages

There are many unfamiliar terms in the crypto industry that newcomers often have to look up. While the term ‘initial coin offering’ is widely known, ‘token production event’ is mentioned less frequently, although the concepts are somewhat similar. So what exactly is TGE in crypto, why is it important, and how does it work?

Token creation event explained: The meaning of TGE in crypto

TGE is the moment when a project’s digital tokens become available for purchase, allowing early investors to get involved in the project from the ground floor and support it from the very beginning. The money raised during the TGE helps fund the project’s future development.

TGEs are often held to launch utility tokens. These tokens are essentially your ticket to getting things done on a blockchain platform. For example, you can use them to pay transaction fees or unlock extra features and tools that the platform offers.

How does TGE affect market dynamics?

When a TGE occurs, the number of tokens available at the outset can really affect their price from the get-go. If the token supply is managed well, it can help keep prices stable and avoid inflation. However, if too many tokens flood the market at once, the price can plummet. It’s also important to lock up the tokens allocated to the team, advisors, and early investors and release them gradually. This approach keeps the market honest and keeps everyone committed to the project for the long term.

For example, consider a project with a total of 100 million tokens, and during the TGE they release 1 million tokens. If there is a lot of interest and the tokens sell out quickly, the price is likely to increase. However, if too many tokens enter the market at once or if large holders, such as team members, suddenly sell their tokens, the price may fall.

TGE and ICO: key differences

While tokenization events and initial coin offerings are often used interchangeably, there are actually some key differences that set them apart. Understanding these differences is crucial for both investors and project developers.

ICO: Primarily used to raise funds before the project is fully developed.

TGE: Signals that tokens have been officially released and are ready for trading and use.

ICO: Usually carried out early in the project life cycle.

TGE: Occurs after the fundraising phase, when tokens are ready to enter the market.

ICO: Focuses on investment and fundraising.

TGE: Focuses on token distribution and ensuring its use within the project’s ecosystem.

ICO: Higher risk, as it usually involves investing in a project that is not yet fully operational.

TGE: Lower risk in terms of project maturity indicates that the project is at a more advanced stage.

In summary, while both TGEs and ICOs involve issuing tokens, TGEs tend to be part of a broader strategy aimed at supporting a thriving project ecosystem, whereas ICOs are more aimed at providing immediate funding.

Advantages of TGE

TGEs offer several key benefits that make them a popular choice for blockchain projects. Beyond just raising funds, TGEs promote decentralization, help build strong communities, and ensure regulatory compliance.

At their core, blockchains thrive on decentralization, and TGEs play a big role in this by distributing tokens widely. This approach disperses control so that no single group can dominate. This balance helps maintain the security and stability of the network.

Decentralized projects rely on the collective efforts of many people, rather than just one organization. This teamwork fuels innovation and long-term success. One of the biggest advantages of TGEs is their ability to build and engage a community. Unlike traditional fundraising, TGEs focus on getting people involved from the very beginning. By offering tokens to early backers, projects can create a loyal user base that is invested in the success of the project. An engaged community can increase the value of a token and the impact of the project.

TGEs also help with regulatory compliance by reducing legal risks and streamlining the launch process. By focusing on how tokens are distributed and used, TGEs ensure better compliance with regulations, which builds trust with both regulators and investors.

Token production events 2024

According to ICO Analytics, the following TGEs are expected to occur in 2024:

Orderly Network (ORDER) on August 26. Bondex (BDXN) on September. TGEs 2024 | Source: ICO Analytics FAQ What is a TGE?

A TGE is when a project first releases its digital tokens to the public. This gives early investors a chance to participate and support the project from the very beginning. Typically, TGEs involve launching utility tokens that act as access passes for various features on a blockchain platform. You can use these tokens to pay for transaction fees or unlock special tools and services. Essentially, they are the key to getting the most out of what the platform has to offer.

What is the difference between TGE and ICO?

ICOs are primarily used to raise money before a project is fully developed. They are an early-stage investment opportunity. However, TGEs occur when the project is in a more advanced stage and ready to release tokens for public use. While TGEs focus on the distribution and functionality of tokens within the project, ICOs are about raising initial funds to help develop the project.

How do you decide whether to participate in a particular TGE?

To decide if a TGE is worth participating in, research the fundamentals of the project. Assess the team’s experience, the project’s roadmap, and the utility of the tokens offered. Check if the project has a clear vision and a solid development plan. Examine the token economics to understand the supply and distribution strategy. Also, evaluate community feedback and regulatory compliance. Make sure the project aligns with your investment objectives and risk tolerance before committing.