When a new crypto asset launches a coin through an Initial Coin Offering (ICO), they not only issue coins, but also issue tokens. Tokens serve as proof of ownership of crypto assets and have their own value.

In addition to ICO, tokens can also be released through Token Generation Events (TGE). Token Generation Events are similar to Initial Coin Offerings, but what is offered are tokens from the crypto asset.

Now, to get to know more about what TGE or Token Generation Event is in the crypto world, starting from its main function, the implementation process, to the differences with ICO, see the following review.

What Is TGE in Crypto?

Before going deeper into the discussion of TGE, it is important to first understand what a token is in the world of crypto assets. In simple terms, a token is a digital unit that runs on blockchain technology.

Usually, tokens are launched through a process known as an Initial Coin Offering (ICO). However, in some cases, companies choose another way to introduce their tokens, namely through a Token Generation Event (TGE).

The Token Generation Event (TGE) is an event held by a company with the aim of creating or launching tokens on leading exchanges. In general, the concept of TGE is similar to ICO, which is a campaign to raise funds.

However, the fundamental difference between TGE and ICO lies in their purpose. ICO focuses more on raising funds through token sales, while TGE emphasizes the launch or creation of the token itself.

In addition, ICOs often sell ready-made or released tokens, while TGE is the process of creating and introducing tokens to the market.

Main Functions of TGE in the Crypto World

Token Generation Event (TGE) is not only a token launch moment in the crypto asset world, but also has several important functions that support the success of blockchain projects. Here are some of its main functions in the crypto world.

1. Raising Funds

First, TGE plays an important role for companies to obtain funds from investors. Through this event, companies introduce their tokens as a form of security, enabling the exchange process between companies and investors.

With TGE, companies receive investment, while investors obtain ownership rights and, in some cases, voting rights related to the projects being developed.

2. Creating an Investor Community

In addition to funds, another goal of TGE is to build a community that is interested in the company’s projects.

The more investors participate through token purchases, the higher the enthusiasm for the project, and the scale of the community increases.

This community is very important because it can be an indicator of the success of the project, and the larger the community, the greater the chance of the project’s success when launched.

3. Increasing Project Awareness

TGE also helps companies increase public awareness of the projects and tokens they develop. For this reason, companies generally choose a strategic platform or exchange in listing their tokens.

It should be noted that the selection of this exchange has a major impact on the price, reputation, and attractiveness of tokens in the eyes of investors.

TGE is usually done by listing tokens on popular decentralized exchanges (DEX) or centralized exchanges (CEX), to support the marketability, liquidity, and investment appeal of the token.

TGE Implementation Process in Crypto

The implementation of the Token Generation Event (TGE) in crypto begins with the development and planning of the token, including the project’s objectives, technical specifications, and benefits for investors.

A whitepaper is then prepared to explain the vision, roadmap, and opportunities of the project. After that, the TGE strategy is determined, including the schedule, distribution method, and targeted fund limit, and ends with a smart contract audit to ensure security.

Also Read: From Member to Influencer: Here’s How to Become a Crypto Ambassador!

Meanwhile, the marketing strategy in TGE includes the use of social media to build an active community, collaborating with influencers to expand reach, and publishing articles in leading crypto media.

In the final stage, the token will be listed on popular exchanges, both centralized and decentralized, to increase liquidity and accessibility for investors.

Main Differences Between TGE and ICO

Although often considered similar and TGE is often referred to as an alternative fundraising method from ICO, the two have quite significant differences.

This difference has made a number of companies recently prefer TGE to launch their tokens rather than through ICO. Here are the differences.

1. Regulation and Taxation

One of the main reasons companies are switching from ICOs to TGEs is related to regulation and taxation. In general, ICOs are treated as taxable securities. In contrast, TGEs are not always considered as securities assets and are usually not taxable.

2. The Role of Marketing and Publication

TGEs also play a major role in project publication and marketing. TGE events can continuously increase the enthusiasm of the investor community and foster their interest in the launched project.

Pros and Cons of TGEs in Crypto Investment

While offering many opportunities and advantages for innovators and investors, TGEs also have some risks and challenges that need to be considered. Here are the pros and cons of TGEs to consider.

1. Pros

• Global Accessibility: TGEs open up opportunities for startups to gain support from investors around the world.
• Decentralized Crowdfunding: TGEs provide a decentralized funding alternative, reducing dependence on traditional funding methods.
• Innovation Opportunities: TGEs provide opportunities for global innovators to develop ideas through blockchain-based applications and platforms.

 

2. Cons

• Regulatory Uncertainty: The lack of regulation makes TGE vulnerable to potential fraud, so thorough research is essential before investing.
• Market Volatility: Token values ??can change drastically, posing a risk in the volatile crypto market.
• Project Viability: Not all projects launched through TGE are able to meet their targets, so there is potential for losses for investors.

Steps to Invest in TGE Projects

Investing in Token Generation Events (TGE) can be an exciting opportunity, but it also carries risks that need to be considered.

To help potential investors optimize their decisions, there are some important steps that can be taken to minimize risks and increase potential profits. Here is a basic guide to investing in TGE projects.

1. Do Your Own Research (DYOR)

Before investing in a TGE project, it is essential to do in-depth research. Understanding the project’s background, vision, and technology will help assess its potential and risks (DYOR) so investors can make a more informed decision.

 

2. Check the Credibility of the Project Team

The credibility and trustworthiness of the project team play a major role in the success of TGE. Ensuring that the team has a good track record in the industry and transparency in its project plans can reduce the risk of fraud and increase confidence in the success of the project.

 

3. Monitor Market Fluctuations

The crypto market is very volatile, so monitoring the price movement of the token after launch is an important step. By understanding these volatility patterns, investors can mitigate risks and take the right steps to protect their investments, where it is a good idea to always monitor the latest crypto market prices on the INDODAX Market.

 

TGE Success Case Examples in the Crypto World

It is also important to note that many major blockchain projects have found success thanks to token launches through events such as Token Generation Events (TGEs).

One of the most famous examples is Ethereum, which started fundraising through an ICO in 2014—a concept similar to TGEs.

In that campaign, Ethereum managed to raise over $18,000,000, a large amount to fund the development of the platform.

Thanks to this success, Ethereum has now grown into one of the largest blockchain platforms in the world, with an ecosystem that supports thousands of decentralized applications (dApps) and other tokens.

Other successful examples include Polkadot and Filecoin, which used TGEs to raise large sums of money to develop their projects.

Polkadot, with its focus on blockchain interoperability, and Filecoin, as a decentralized data storage platform, have both managed to raise large sums of capital from global investors.

As a result, both projects are now major players in the blockchain industry thanks to the funding they received from TGEs and the strong traction they have in the crypto community.

 

Conclusion

So, that was an interesting discussion about What is a Token Generation Event (TGE) in Crypto?: How to Raise Funds with Tokens! which you can read in full at the Crypto Academy at INDODAX Academy.

In conclusion, the Token Generation Event (TGE) offers various benefits for crypto projects, such as global accessibility, more decentralized funding, and wider innovation opportunities.

TGE also helps projects achieve more efficient funding and provides investors with the opportunity to get involved in the early stages of project development.

However, TGE also presents challenges, including the risk of regulatory uncertainty, market volatility, and potential security that can impact investment continuity.

Therefore, due diligence and a mature investment strategy are very important before participating in a TGE project.

In this case, investors need to explore the credibility of the team, project analysis, and market dynamics as a whole to minimize risk and make the right decisions in the dynamic crypto world.

FAQ

1. What is a Token Generation Event (TGE)?

TGE is a token launch event by a company to raise funds from investors, similar to an ICO but with a different approach to regulation.

2. What is the Difference Between TGE and ICO?
TGE focuses on fundraising without being considered a security, while ICOs are often considered securities and are subject to taxation.

3. What is the Main Function of TGE in Crypto?
TGE is used to raise funds, create a community of investors, and raise public awareness of crypto projects.

4. What are the Risks of Investing in TGE?
TGE risks include regulatory uncertainty, token price volatility, and projects that do not live up to their initial promises.

5. How to Identify a Safe TGE Project?
Do thorough research, check the credibility of the team, and monitor community response before investing.

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