Token Generation (TGE): How Crypto Projects Distribute Assets

When people in the crypto space talk about TGE, they refer to a critical moment in the life of any blockchain project. Token Generation Event (TGE) is the process of creating and distributing digital assets among ecosystem users. This event often becomes a turning point that determines the project’s future development trajectory and its engagement with the community.

Although the term TGE is often confused with ICO (Initial Coin Offering), there is a fundamental difference between them. While ICO is primarily used to raise funds through asset sales, TGE focuses on issuing utility tokens that provide functionality and governance within the project’s ecosystem.

What Does the Abbreviation TGE Stand For

Token Generation Event is not just a technical operation on the blockchain. It is a strategic move that allows projects to expand their user base, reward early supporters, and create a liquid market for their digital asset.

During a TGE, tokens are created on the project’s blockchain and then distributed among users. These assets, unlike coins (which regulators may classify as securities), serve as utility tools. They can be programmed via smart contracts to perform various functions: from project management to rewarding staking or participation in decentralized applications.

Utility Tokens Instead of Coins: What’s the Difference from ICO

The line between TGE and ICO is not always obvious at first glance, but its significance is enormous. ICO is aimed at raising capital and is often perceived by regulators as a fundraising tool similar to an IPO in traditional finance. As a result, tokens issued through ICO can be classified as securities, which entails regulatory requirements.

TGE, on the other hand, is focused on distributing utility tokens intended for governance, paying for services within the ecosystem, or participating in reward mechanisms. Many projects choose TGE over ICO for this reason — this approach helps avoid excessive regulatory scrutiny and positions assets as functional tools rather than investment products.

Three Key Examples of Successful Token Generation

The history of the crypto space contains several illustrative examples of how TGE can radically transform a project.

Uniswap launched its TGE in September 2020, introducing the governance token UNI. Initially, one billion UNI were created, planned to be distributed over four years. This event gave holders the opportunity to participate in protocol governance, and the simultaneous launch of a liquidity mining program allowed users to earn rewards for providing assets to trading pools. As of February 2026, the price of UNI is $3.26, reflecting the long-term value recognized by the community in this asset.

Blast, a second-layer Ethereum solution, initiated its TGE in mid-2024. The project developers pre-minted the BLAST token on the mainnet and then airdropped it to users who interacted with the ecosystem by transferring Ether or USDB into the Blast network. Participants in the TGE received 17% of the total token supply. The current BLAST price is unstable at $0.00, indicating an early stage of market valuation.

Ethena conducted its TGE in April 2024, distributing 750 million governance tokens ENA to holders of special shards earned through activity in the ecosystem. The project is notable for revolutionizing the DeFi space with its synthetic dollar USDe. Currently, ENA is trading at around $0.11, demonstrating market interest in the project.

Why Projects Initiate Token Generation Events

Behind every TGE lies a specific development strategy. Projects launch TGEs with several often complementary goals.

Stimulating community growth. Issuing and distributing utility tokens attracts new participants to the ecosystem. Holders gain not only assets but also incentives — from voting rights in decision-making to earning rewards through staking. A strong, engaged community is the foundation of long-term success for any project.

Increasing market liquidity. When tokens begin trading freely on cryptocurrency exchanges, it significantly facilitates buying and selling activities. High liquidity stabilizes prices and allows the market to more effectively determine value through supply and demand interactions.

Attracting external resources. Although TGE is not always used as an investment-raising tool, some projects employ this mechanism to attract capital. Thanks to the user-centric nature of blockchain, the process can be quick and secure.

How to Minimize Risks When Participating in a TGE

Before investing time and funds into any project, comprehensive research is essential. Unfortunately, the crypto space attracts both innovators and scammers.

Main risk — rug pull. This scheme involves project creators artificially inflating the token’s price and then abruptly liquidating their positions, taking the funds and leaving other holders with devalued assets. To protect yourself, carefully verify the team’s reputation, check for smart contract audits, and review the founders’ previous project histories.

Regulatory threats. Cryptocurrency regulation is constantly evolving. A project may face legal obstacles if local authorities reclassify its tokens as securities. Studying the legal framework under which the project operates is critically important.

Step-by-Step Evaluation of a Promising Project

If you are considering participating in an upcoming token generation, follow a systematic analysis approach.

Start with fundamental documents. The project’s whitepaper contains comprehensive information about its vision, technological foundation, roadmap, team composition, and token distribution mechanics. Pay attention to where the project fits within the Web3 ecosystem and what problem it aims to solve.

Research the founding team. The experience, qualifications, and track record of the creators often determine the project’s success. Find information about their previous achievements, professional background, and the talented individuals they have brought into the team.

Listen to the community. On platforms like X (Twitter) and in specialized Telegram groups, you can find real feedback from developers and users. An active, critically-minded community often better identifies project issues than formal analytical reports.

Assess the competitive landscape. Study which projects operate in the same niche and what advantages your candidate has. Understanding market dynamics helps evaluate the real prospects of the token.

Token generation remains one of the most powerful tools in crypto projects’ arsenal. A well-organized TGE can lead to explosive community growth, create a liquid market, and even attract significant investments. However, successful participation in a TGE requires deep project understanding, thorough risk analysis, and healthy skepticism. For those who believe in the project’s long-term potential and are willing to conduct the necessary research, a TGE can be an opportunity to become part of an innovative ecosystem at its early stages.