2025 Token Generation Event (TGE) Ultimate Guide for Business Stakeholders

In crypto, there are a lot of terms new users will find themselves searching for, since there are no universal definitions. While you probably have heard the term ‘initial coin offering’ used, the term ‘token generation event’ is not as common. The two terms are not entirely different. What is a Token Generation Event or TGE in crypto, why is it important for stakeholders (especially for Founders, CEOs, Managers, business entrepreneurs, and so on) and how does it work?

What Are Tokens?

A token is a digital portrait of a utility or an asset in a blockchain network for use in a decentralized app (DApp). The “Token Generation Event” is when a DApp developer officially releases tokens into the marketplace. Tokens are programmable and generally represent an asset or utility. Tokens are marketable and run on a smart contract system that allows for a variety of cash or goods (i.e., for tokenization) like reward points, virtual characters from video games, etc.

A token created using a smart contract has a variety of roles and uses ranging from voting rights, exchanging value, access to premium services, currency transactions, and distribution earnings from the outset. Additionally, tokens enable the governance of certain decentralized finance projects, which allows for the development of user communities and promotes the continued evolution of the project over time.

Types of Tokens in Business Stakeholders

In a business context, tokens refer to digital assets or units of value minted on blockchain networks. There are different kinds of tokens that serve different roles to stakeholders of business in the business world, like governance, trading, or to access a platform. In the future, we will explain the types of tokens and introduce real-world examples/cases to frame each type of token.

1. Platform Tokens

Platform tokens are tokens made to be spent inside a platform or ecosystem for accessing a feature or service. Platform tokens are critical for the existence of a platform.

Example:

Binance Coin (BNB): This is a digital asset that is utilized to facilitate trading fees and to access staking and launchpad functionalities on the Binance exchange platform. The Binance exchange is an example of a business stakeholder, specifically founders and/or CEO's of crypto projects, increasing the value of the platform to facilitate interactions among users on its platform through the business use of a platform token.

Real-World Case:

Ethereum (ETH): A blockchain platform where ETH serves as the native token used to pay a gas fee for transactions, on decentralized applications (dApps), and for executing smart contracts. Entrepreneurs can rely on the ETH token to create decentralized services on the Ethereum network.

2. Security Tokens

Security tokens are a new way of representing ownership and investment interests in real-life assets or investment contracts that have a tradable representation on a blockchain. Security tokens are generally considered regulated assets that can represent a share in a corporation or other financial instruments.

However, because security tokens are not utility tokens in the traditional sense, they rarely do a normal ico/ieo/ido or free trade contract. This limits their trading potential on a centralized crypto exchange.

Example:

Polymath (POLY): Polymath is a platform for the creation of security tokens. Polymath enables companies to convert their traditional assets to tokens on a blockchain. Business stakeholders like a CEO can use them to raise capital or provide liquidity to stakeholders.

Real-world use case:

tZERO: An example of a platform that hosts a security token offering (STO) for businesses. For example, Overstock.com can issue tokenized securities on STOs. This allows stakeholders who are interested in fractional ownership of the company or its assets to buy tokens on the blockchain.

3. Transaction Tokens

Transaction tokens are generally used as digital money to facilitate transactions. Transaction tokens are designed for exchanging value and generally serve as a medium of exchange or store of value.

Example:

Bitcoin (BTC): Bitcoin has become the world's most popular transaction token. Business entrepreneurs or leaders like founders or CEOs use Bitcoin to facilitate cross-border payments, investments, or as a hedge against inflation.

Real-World Case:

Litecoin (LTC): Litecoin is often used for transactions with an acknowledgement that it may be faster than Bitcoin. Generating faster payments revenues is a general reason accepted by businesses for online transactions with lower fees than Bitcoin making it popular with microtransactions.

4. Utility Tokens

Utility Tokens Utility tokens facilitate access to key services or features within a blockchain platform. Utility tokens are valuable for gaining access to particular applications or features within a platform.

Example:

Chainlink (LINK) It provides decentralized oracles for smart contracts to use off-chain data. Developers and business owners use LINK tokens to pay for the purposes of integrating real-world data into smart contracts.

Real-World Case:

Filecoin (FIL): Filecoin (FIL) Users can purchase storage using FIL tokens on this decentralized storage model. Entrepreneurs who need data stored on a decentralized platform can pay using FIL tokens.

5. Non-fungible (NFT) Tokens

These are unique digital assets representing ownership or access to items like artwork, music, real-estate, collectibles, or in-game items.

Example:

CryptoPunks: CryptoPunks is one of the first NFT projects and is described as a group of digital collectibles created on the Ethereum blockchain. Each of these collectibles is a distinct avatar and each avatar has distinct features and operates as a valuable collectable item and would likely be seen as rare by other collectors.

Real-World Case:

Bored Ape Yacht Club (BAYC) is a well-known NFT project that is a collection of hand-drawn, digital apes, each unique. Founders and entrepreneurs have used NFTs such as BAYC as membership tokens, which grant holders exclusive access to events and network opportunities that encompass an art / gaming / business value increase.

6. Governance Tokens

Governance tokens are tokens that give holders a right to vote on projection or protocol decisions. Governance tokens are a key and essential part of decentralized governance structures, and make it possible for stakeholders to directly influence the development in the project.

Example:

Uniswap (UNI): Uniswap provides community governance through UNI tokens on their DEX. UNI token holders can vote on updates to the protocol, such as fee structure or liquidity pools or entrepreneurs or managers in the decentralized financial space can use UNI tokens to have a voice in the developmental direction of their platform.

Real-World Case:

MakerDAO is a decentralized autonomous organization to which MKR token holders provide governance rights to operational decisions, for example, the type of collateral they would like to use to collateralize their DAI stablecoin. Business stakeholders, such as founders or CEOs, can also cast governance votes with their MKR holdings.

What is a Token Generation Event (TGE)?

A Token Generation Event (TGE) is a defining moment for blockchain projects and involves the launching and distribution of native tokens on a blockchain. For founders, CEOs, managers, and entrepreneurs, a TGE is an excellent opportunity to raise funds, build their initial support community and initiate their project's ecosystem. A TGE offers flexibility by allowing the startup to directly seek investment from global stakeholders sans the regulatory burden that comes through securities; traditional fundraising models, such as venture capital, do not provide this same freedom. Typically, a TGE begins with writing a whitepaper to illustrate the project vision and token specifications; the founder would then create the tokens through smart contracts and distribute through private sale or public offering. In this way, a TGE raises funds, while simultaneously allowing community members, who are often early stakeholders, to participate in the project ecosystem and operate as brand ambassadors. Before launching your TGE, it’s important to choose the right fundraising method. Learn what are the differences between SAFE and SAFT to ensure your token distribution aligns with investor expectations and legal considerations.

From a business perspective, TGEs represent more than just fundraising efforts—they are branding and ecosystem building exercises. Entrepreneurs utilize TGEs to test potential market interest, iterate on their business model based on feedback, and incentivize actions within their own platform using utility tokens. Utility tokens carry potential multiplier benefits, such as access to services or contributions to governance decisions or contributions to the environment. Many successful TGEs require addressing and deliberate planning (and design) with a number of different disciplines such as tokenomics design, regulatory issues, community building, coordination and outreach, and more. Importantly, businesses focusing on the usage of utility tokens enabled as utility-based assets versus securities can navigate regulatory issues with tokenized assets and elements of risk-based investment logic, while bringing in knowledgeable stakeholders meant to be committed to the enterprise.

Why Does This Matter for Business Stakeholders?

TGEs are an appealing opportunity for founders, CEOs, and business stakeholders. Stakeholders involved in a TGE engage in a new approach to raising capital, developing a community and stimulating growth for the business. This is how TGEs provide advantages to business stakeholders:

1. Founders

Founders can benefit from TGEs in a number of ways:

Capital Raising: TGEs allow founders to raise funds in a new way and avoid the traditional venture capital route - therefore retaining more ownership of their projects.
Community Building: By distributing tokens, founders can build a community of loyal users who want their projects to succeed - leading to early adopters and advocates for the project.
Ecosystem Development: Fundamentally, tokens incentivize developers and other partners to build things on your platform, therefore enhancing the platform's development and capabilities.

2. CEOs

For CEOs, benefits of TGEs include:

Public Access: TGEs give CEOs access to a worldwide audience of potential clients, breaking geographic barriers of traditional fundraising.
Flexible Reserve: CEOs can structure/token sales to support specific fundraising needs, such as raising early-stage appropriated capital or funding development efforts.
Public Relations: Successful TGEs may receive significant media attention, thus enhancing the market presence and awareness of the project.

3. Managers

Managers can use TGEs to:

Promote Teamwork: Token-based compensation can align the interests of team members with the long-term success of the project.
Automate Processes: Smart contracts used in TGEs can automate many tasks, while minimizing the administrative burden.
Leverage Data: The blockchain-based model has a transparent structure that allows managers to collect data and engage community members in real-time.

4. Business Entrepreneurs

Entrepreneurs value TGEs for:

Rapid Prototyping: Money from a TGE can accelerate product development and testing.
Network Effects: By distributing tokens, entrepreneurs can create a user and supporter network much quicker to expand a platform business.
Regulatory Navigation: If structured correctly, TGEs can offer a regulatory context that is more flexible than traditional securities.

TGEs represent a fundamentally new method for stakeholders and businesses in the blockchain context to raise capital, build community, and establish a tokenized ecosystem able to drive innovation and growth. It is important for all stakeholders to balance the risks presented by a TGE including regulatory misalignment, in addition to ethics and sustainable tokenomics, to achieve long term success.

Key Characteristics of a TGE

Key Features of a TGEToken Generation Events (TGEs) have some distinguishing features that differentiate them from other means of fundraising in the cryptocurrency industry as well.

1. Public Offering

TGEs are generally the first time the general public has an opportunity to acquire a project’s token. From the perspective of a business leader, this means:

Global Reach: A TGE offers access to a global audience and investor/user base, regardless of the geography limitations of traditional fundraising.
Brand Exposure: The public nature of a TGE may also generate a significant amount of media exposure to promote visibility and credibility of the project in the marketplace.

2. Fundraising Mechanism

TGEs are a significant way for projects to raise capital. For business stakeholders, this means:

Capital: TGEs provide a new opportunity to raise capital without the burden of traditional venture capital, enabling founders and CEOs to retain greater ownership and control over their projects.
Flexibility: Business stakeholders can structure their token sales to address their specific needs, whether that is to raise early capital or to fund ongoing development and enhancements.

3. Community Building

Successful TGEs not only raise money but also create a community of early supporters. This aspect provides:

User Base Growth: TGEs can build new users and create participation within the project ecosystem.
Engaged Stakeholders: Early token holders often "invest" in the project's success and provide valuable customer feedback to the community.

4. Token Distribution

TGEs create the initial allocation of tokens among participants. For business leaders, this provides:

Ecosystem Incentives: Tokens establish incentives to align team members with the success of the project long-term, incentivize developers and partners, and drive development on the ecosystem platform.
Liquidity Creation: With an initial distribution of tokens businesses can create liquidity and stabilize prices discovered among buyers and sellers.

These characteristics make TGEs an effective mechanism for business stakeholders in the blockchain realm to raise capital, develop communities, and create the tokenized ecosystems to foster innovation and growth.

Common Token Generation Events

From a business leader's view, Token Generation Events (TGEs) have a variety of fundraising and community-building possibilities. Here is a summary of the types of TGEs:

1. Initial Coin Offerings (ICOs)

ICOs are when entrepreneurs raise funds and issue utility tokens:

Flexibility: Founders can develop the tokenomics and raise funds with little restriction of rules.
Far Reach: CEOs can raise funds from a worldwide pool of stakeholders without using traditional intermediaries.
Lower Costs: Managers can raise funds at a lower cost than traditional fundraising methods.
More Risk: Entrepreneurs are exposed to increased scrutiny from regulatory bodies and there is a greater potential for fraud.

2. Security Token Offerings (STOs)

STOs are when tokens are issued by an entrepreneur to represent ownership in assets, are usually regulated:

Regulatory Compliance: Founders can issue tokens that comply with securities laws, reducing legal risk.
Asset Backed: CEOs are able to tokenize an actual asset and possibly attract a more traditional investor.
Transparency: Managers benefit from the blockchain recording and reporting.
Investor Protection: Entrepreneurs can offer incentives that are consistent with securities, which could increase investor confidence.

3. Initial Exchange Offerings (IEOs)

IEOs occur when a crypto exchange conducts the offering:

Credibility: Founders can gain "trust" from the exchange sampling the process.
Instant Liquidity: CEOs benefit from instant liquidity as the sale occurs and tokens are immediately available to trade on the exchange.
Marketing Help: Managers can take advantage of the exchange’s user base and marketing contributions.
Higher Costs: Entrepreneurs may have to pay substantial listing fees and revenue sharing with the exchange.

4. Initial DEX Offerings (IDOs)

IDOs occur is when a decentralized exchange conducts the offering:

Decentralization: Founders can credibly be aligned with the blockchain principle of decentralization.
Cost Effective: CEOs will only have to pay the listing fees and not the sales royalties of an IEO.
Instant Trading: Managers can provide immediate trading capabilities to holders of tokens.
More Technical: Entrepreneurs may find the navigation with decentralized exchanges more difficult.

Each TGE type presents its own opportunities and challenges for business leaders, and require a serious consideration of regulatory, finance, and strategy when deciding which method is most suitable to fundraise.

What is an IDO: Unlocking the Future of Fundraising | TokenMinds Guide

ICOs, IPOs, and TGEs: The Differences

ICOs, IPOs, and TGEs are fundraising and token distribution strategies within the finance and crypto continuum. Below is a comparison of their differences:

Initial Coin Offerings (ICOs)

Fundraising Method: ICOs allow startups to raise money using cryptographic tokens.
Regulation: Generally less regulated and falls into a gray regulatory area.
Stage: Typically occur during the early stages of a project even before the product is built, or may not have even been conceptualized.
Offer: Offer utility tokens or cryptocurrencies and not shares in the company.

Initial Public Offerings (IPOs)

Fundraising Method: Traditional route of companies that want to become public by raising funds through the sale of their shares.
Regulation: Heavy regulation from the governing financial regulators.
Stage: Usually occurs when a company has a track record and is looking to grow and expand.
Offer: Offer shares of the company which gives the buyer ownership in the company.

Token Generation Events (TGEs)

Fundraising Method: Marks the new issuing and distribution of digital tokens on a blockchain network.
Regulation: Regulated according to the type of token and jurisdiction.
Stage: May occur at any stage in the project development timeline.
Offer: Usually utility tokens for specific use-cases within a project ecosystem.

TGEs include various methods of launching a Security Token Offering (STO), Initial Coin Offering (ICO), Initial Exchange Offering (IEO), or Initial DEX Offering (IDO). The mechanism chosen is dependent on or dictated by regulations, relevancy to target audiences, and the goals for project or project teams.

Steps to Launch a Token Generation Event

Let’s have a look the 4 steps how to launch a Token Generation Event:

1. Create a product

When you engage in a token generation process, the first step is to create a product, i.e., you need to have a product that leverages your token before you move on to the next step. You could develop a blockchain-enabled product by getting the advice of a qualified blockchain advisor. Also, consider getting a legal advisor as well, so that they could let you know if what you want to develop is in compliance with provisions in your regulatory structure.

2. Prepare to draft your whitepaper

One of the most important marketing items for your token-generating event is the whitepaper. This is the document that describes the market problem and the plan to leverage blockchain technology to address it. Key elements of the whitepaper include the goals of the project, the team, the roadmap, proposed percentage token distribution, and the legal considerations of your business.

3. Engage a community

By creating a community of supporters, you will be able to successfully conduct your token sale marketing. Therefore, build a community to support you in selling the project and importing enthusiasm. (Discord, Slack, Telegram, and Twitter are some audience engagement channels where the crypto community can help spread the news about your product.) And, as important, once you establish a community, it is crucial to adequately maintain it by regularly engaging with that community.

4. Reach out to exchanges for token listings

When you are ready for a token-generating event, one of the best approaches to act on marketing to get the most leads or interest in your token project is to reach out to various exchanges about listing your token for trading on the open market. In general, it is good to have your token listed on reputable exchanges.

Advantages of TGE for B2B

On top of access to funds, TGEs help B2B firms develop strong ecosystems and partnerships. By creating digital tokens, firms can incentivize all of their stakeholders, including suppliers, partners, and clients/customers, to be participants of the ecosystem. These tokens can reward different participants for their loyalty in one way, or can also provide a means of transaction or access to services/benefits that would create value to the participant in exchange for that token. The decentralized nature of TGEs means that incentives are aligned throughout the network ecosystem, and collaboration can develop. Finally, the transparency of blockchain and tracing for token activity create a level of trust between business partners that is important in the B2B context. TGEs therefore present compelling advantages for creating avenues of funding and development of innovation in the B2B environment.

Pros and Cons of TGE for Business Stakeholders

Token Generation Events (TGEs) have benefits and drawbacks for business stakeholders, including founders, managers, and CEOs:

Pros

Efficient Fundraising: TGEs are effective for raising capital because they allow businesses to access a worldwide pool of stakeholders without the traditional capital-raising structures.
Community Building: TGEs allow you to build an engaged user base as early as possible in order to develop a strong base of business clients.
Flexible Tokenomics: Founders and CEOs can create token mechanisms that will allow for proper balancing of supply and demand without incentive to venture capitalists or traditional stakeholders.
Global Reach: TGEs extend the reach of a project to a global audience of stakeholders.
Decentralized Funding: Not all TGEs require intermediaries and funding can be raised directly from stakeholders without centralized institutions.

Cons

Regulatory Uncertainty: Many countries are behind on their regulations concerning TGEs - leading to a probability of legal risks for both the project and the investor.
Security Risks: A TGE can be hacked or breached at a very high scale and/or can lead to the misappropriation of investor funds or loss of personal information.
Market Volatility - The volatility of the cryptocurrency market can lead to significant swings in tokenworth in a short period of time - including total loss.
Project Viability: Just because a TGE occurs - doesn't mean that the project is worthwhile. In other words, some simply do not deliver on potential, and some fail altogether, losing investor funds.
Expectations Management: Business leaders need to prudently manage community expectations and follow through on their product promise in order to maintain their credibility.

Business stakeholders have to weigh the pros and cons of TGEs very carefully - and they still need to have a plan to manage challenges round to the upside of the potential.

The Future of TGEs: Evolving Trends and Landscape for B2B

The future of Token Generation Events (TGEs) for B2B stakeholders is undergoing important changes. Greater regulatory clarity and compliance models will provide more legal certainty and probably attract institutional stakeholders. The integration of TGEs into Decentralized Finance (DeFi) and Web3 ecosystems will likely create increased functionality and interoperability ultimately creating more sophisticated tools for B2B participants to raise funds and build ecosystems.

We are also seeing an increased focus on the necessity for tokens to have utility and real-world application, which could lead to more sustainable and value-driven B2B token projects. Additionally, we envision the development of new funding models, such as Decentralized Autonomous Organizations (DAOs) and liquidity bootstrapping pools, to create additional channels for capital raising and community engagement for B2B stakeholders. As these trends develop, B2B organizations will need to keep their eyes on the road and remain flexible to capitalize on the early TGE space.

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FAQs

1. What is the goal of a TGE?

The main goal of a Token Generation Event (TGE) is to market the tokens for use and trading. An ICO is primarily focused on raising money to launch the project whereas TGE is focused on launching the tokens and allowing the user to use the services of the project, or govern the project. Why is this important? This is important because it puts a community in place for the project, tokens that will effectively begin to work, and are capable of use.

2. How does TGE differ from ICO?

The primary differences between a TGE and ICO are in the focus and timing. ICOs raise money early in the project’s life cycle—often before the project has even been developed--and focus on fundraising and investment. TGEs occur after the fundraising phases occur, and the official launch of tokens that will be used within the project environment occurs once the TGE has concluded. TGEs focus more on distributing the tokens and enabling utility for the token, so they are lower risk than ICOs by nature and don’t have the speculative characteristics associated with investing in early stage projects.

3. What type of tokens are often issued in a TGE?

At a Token Generation Event (TGE), there are four types of tokens that are most common - utility tokens, security tokens, governance tokens, and platform tokens. Utility tokens grant access to services, or functionality, within an ecosystem. Security tokens grants ownership, or rights associated with ownership, in an underlying asset. Security tokens are subject to regulation. Governance tokens allow for holders of the token to engage in the decision making process about the project. Platform tokens allow for transacting or interaction that occurs on a blockchain platform.

4. How do businesses benefit from TGEs?

Businesses can benefit from TGEs, by facilitating the ability to raise funds for future projects, the development of a strong community of engaged participants, and regulatory compliance. TGEs can facilitate the distribution of tokens within a project which aids in the distribution of tokens across a user base, creating a decentralization environment, and continuing a secure network. With the appreciation of value of the TGE token and establishment of a loyal user base–engaged long after the TGE project is prolonged, has a compelling impact on the direction of the project. The TGE not only supports the community aspect of usability, but as regeneration a functionality token makes it clear and actionable, enabling the usability of, in the project’s case, who is being launched.

In crypto, there are a lot of terms new users will find themselves searching for, since there are no universal definitions. While you probably have heard the term ‘initial coin offering’ used, the term ‘token generation event’ is not as common. The two terms are not entirely different. What is a Token Generation Event or TGE in crypto, why is it important for stakeholders (especially for Founders, CEOs, Managers, business entrepreneurs, and so on) and how does it work?

What Are Tokens?

A token is a digital portrait of a utility or an asset in a blockchain network for use in a decentralized app (DApp). The “Token Generation Event” is when a DApp developer officially releases tokens into the marketplace. Tokens are programmable and generally represent an asset or utility. Tokens are marketable and run on a smart contract system that allows for a variety of cash or goods (i.e., for tokenization) like reward points, virtual characters from video games, etc.

A token created using a smart contract has a variety of roles and uses ranging from voting rights, exchanging value, access to premium services, currency transactions, and distribution earnings from the outset. Additionally, tokens enable the governance of certain decentralized finance projects, which allows for the development of user communities and promotes the continued evolution of the project over time.

Types of Tokens in Business Stakeholders

In a business context, tokens refer to digital assets or units of value minted on blockchain networks. There are different kinds of tokens that serve different roles to stakeholders of business in the business world, like governance, trading, or to access a platform. In the future, we will explain the types of tokens and introduce real-world examples/cases to frame each type of token.

1. Platform Tokens

Platform tokens are tokens made to be spent inside a platform or ecosystem for accessing a feature or service. Platform tokens are critical for the existence of a platform.

Example:

Binance Coin (BNB): This is a digital asset that is utilized to facilitate trading fees and to access staking and launchpad functionalities on the Binance exchange platform. The Binance exchange is an example of a business stakeholder, specifically founders and/or CEO's of crypto projects, increasing the value of the platform to facilitate interactions among users on its platform through the business use of a platform token.

Real-World Case:

Ethereum (ETH): A blockchain platform where ETH serves as the native token used to pay a gas fee for transactions, on decentralized applications (dApps), and for executing smart contracts. Entrepreneurs can rely on the ETH token to create decentralized services on the Ethereum network.

2. Security Tokens

Security tokens are a new way of representing ownership and investment interests in real-life assets or investment contracts that have a tradable representation on a blockchain. Security tokens are generally considered regulated assets that can represent a share in a corporation or other financial instruments.

However, because security tokens are not utility tokens in the traditional sense, they rarely do a normal ico/ieo/ido or free trade contract. This limits their trading potential on a centralized crypto exchange.

Example:

Polymath (POLY): Polymath is a platform for the creation of security tokens. Polymath enables companies to convert their traditional assets to tokens on a blockchain. Business stakeholders like a CEO can use them to raise capital or provide liquidity to stakeholders.

Real-world use case:

tZERO: An example of a platform that hosts a security token offering (STO) for businesses. For example, Overstock.com can issue tokenized securities on STOs. This allows stakeholders who are interested in fractional ownership of the company or its assets to buy tokens on the blockchain.

3. Transaction Tokens

Transaction tokens are generally used as digital money to facilitate transactions. Transaction tokens are designed for exchanging value and generally serve as a medium of exchange or store of value.

Example:

Bitcoin (BTC): Bitcoin has become the world's most popular transaction token. Business entrepreneurs or leaders like founders or CEOs use Bitcoin to facilitate cross-border payments, investments, or as a hedge against inflation.

Real-World Case:

Litecoin (LTC): Litecoin is often used for transactions with an acknowledgement that it may be faster than Bitcoin. Generating faster payments revenues is a general reason accepted by businesses for online transactions with lower fees than Bitcoin making it popular with microtransactions.

4. Utility Tokens

Utility Tokens Utility tokens facilitate access to key services or features within a blockchain platform. Utility tokens are valuable for gaining access to particular applications or features within a platform.

Example:

Chainlink (LINK) It provides decentralized oracles for smart contracts to use off-chain data. Developers and business owners use LINK tokens to pay for the purposes of integrating real-world data into smart contracts.

Real-World Case:

Filecoin (FIL): Filecoin (FIL) Users can purchase storage using FIL tokens on this decentralized storage model. Entrepreneurs who need data stored on a decentralized platform can pay using FIL tokens.

5. Non-fungible (NFT) Tokens

These are unique digital assets representing ownership or access to items like artwork, music, real-estate, collectibles, or in-game items.

Example:

CryptoPunks: CryptoPunks is one of the first NFT projects and is described as a group of digital collectibles created on the Ethereum blockchain. Each of these collectibles is a distinct avatar and each avatar has distinct features and operates as a valuable collectable item and would likely be seen as rare by other collectors.

Real-World Case:

Bored Ape Yacht Club (BAYC) is a well-known NFT project that is a collection of hand-drawn, digital apes, each unique. Founders and entrepreneurs have used NFTs such as BAYC as membership tokens, which grant holders exclusive access to events and network opportunities that encompass an art / gaming / business value increase.

6. Governance Tokens

Governance tokens are tokens that give holders a right to vote on projection or protocol decisions. Governance tokens are a key and essential part of decentralized governance structures, and make it possible for stakeholders to directly influence the development in the project.

Example:

Uniswap (UNI): Uniswap provides community governance through UNI tokens on their DEX. UNI token holders can vote on updates to the protocol, such as fee structure or liquidity pools or entrepreneurs or managers in the decentralized financial space can use UNI tokens to have a voice in the developmental direction of their platform.

Real-World Case:

MakerDAO is a decentralized autonomous organization to which MKR token holders provide governance rights to operational decisions, for example, the type of collateral they would like to use to collateralize their DAI stablecoin. Business stakeholders, such as founders or CEOs, can also cast governance votes with their MKR holdings.

What is a Token Generation Event (TGE)?

A Token Generation Event (TGE) is a defining moment for blockchain projects and involves the launching and distribution of native tokens on a blockchain. For founders, CEOs, managers, and entrepreneurs, a TGE is an excellent opportunity to raise funds, build their initial support community and initiate their project's ecosystem. A TGE offers flexibility by allowing the startup to directly seek investment from global stakeholders sans the regulatory burden that comes through securities; traditional fundraising models, such as venture capital, do not provide this same freedom. Typically, a TGE begins with writing a whitepaper to illustrate the project vision and token specifications; the founder would then create the tokens through smart contracts and distribute through private sale or public offering. In this way, a TGE raises funds, while simultaneously allowing community members, who are often early stakeholders, to participate in the project ecosystem and operate as brand ambassadors. Before launching your TGE, it’s important to choose the right fundraising method. Learn what are the differences between SAFE and SAFT to ensure your token distribution aligns with investor expectations and legal considerations.

From a business perspective, TGEs represent more than just fundraising efforts—they are branding and ecosystem building exercises. Entrepreneurs utilize TGEs to test potential market interest, iterate on their business model based on feedback, and incentivize actions within their own platform using utility tokens. Utility tokens carry potential multiplier benefits, such as access to services or contributions to governance decisions or contributions to the environment. Many successful TGEs require addressing and deliberate planning (and design) with a number of different disciplines such as tokenomics design, regulatory issues, community building, coordination and outreach, and more. Importantly, businesses focusing on the usage of utility tokens enabled as utility-based assets versus securities can navigate regulatory issues with tokenized assets and elements of risk-based investment logic, while bringing in knowledgeable stakeholders meant to be committed to the enterprise.

Why Does This Matter for Business Stakeholders?

TGEs are an appealing opportunity for founders, CEOs, and business stakeholders. Stakeholders involved in a TGE engage in a new approach to raising capital, developing a community and stimulating growth for the business. This is how TGEs provide advantages to business stakeholders:

1. Founders

Founders can benefit from TGEs in a number of ways:

Capital Raising: TGEs allow founders to raise funds in a new way and avoid the traditional venture capital route - therefore retaining more ownership of their projects.
Community Building: By distributing tokens, founders can build a community of loyal users who want their projects to succeed - leading to early adopters and advocates for the project.
Ecosystem Development: Fundamentally, tokens incentivize developers and other partners to build things on your platform, therefore enhancing the platform's development and capabilities.

2. CEOs

For CEOs, benefits of TGEs include:

Public Access: TGEs give CEOs access to a worldwide audience of potential clients, breaking geographic barriers of traditional fundraising.
Flexible Reserve: CEOs can structure/token sales to support specific fundraising needs, such as raising early-stage appropriated capital or funding development efforts.
Public Relations: Successful TGEs may receive significant media attention, thus enhancing the market presence and awareness of the project.

3. Managers

Managers can use TGEs to:

Promote Teamwork: Token-based compensation can align the interests of team members with the long-term success of the project.
Automate Processes: Smart contracts used in TGEs can automate many tasks, while minimizing the administrative burden.
Leverage Data: The blockchain-based model has a transparent structure that allows managers to collect data and engage community members in real-time.

4. Business Entrepreneurs

Entrepreneurs value TGEs for:

Rapid Prototyping: Money from a TGE can accelerate product development and testing.
Network Effects: By distributing tokens, entrepreneurs can create a user and supporter network much quicker to expand a platform business.
Regulatory Navigation: If structured correctly, TGEs can offer a regulatory context that is more flexible than traditional securities.

TGEs represent a fundamentally new method for stakeholders and businesses in the blockchain context to raise capital, build community, and establish a tokenized ecosystem able to drive innovation and growth. It is important for all stakeholders to balance the risks presented by a TGE including regulatory misalignment, in addition to ethics and sustainable tokenomics, to achieve long term success.

Key Characteristics of a TGE

Key Features of a TGEToken Generation Events (TGEs) have some distinguishing features that differentiate them from other means of fundraising in the cryptocurrency industry as well.

1. Public Offering

TGEs are generally the first time the general public has an opportunity to acquire a project’s token. From the perspective of a business leader, this means:

Global Reach: A TGE offers access to a global audience and investor/user base, regardless of the geography limitations of traditional fundraising.
Brand Exposure: The public nature of a TGE may also generate a significant amount of media exposure to promote visibility and credibility of the project in the marketplace.

2. Fundraising Mechanism

TGEs are a significant way for projects to raise capital. For business stakeholders, this means:

Capital: TGEs provide a new opportunity to raise capital without the burden of traditional venture capital, enabling founders and CEOs to retain greater ownership and control over their projects.
Flexibility: Business stakeholders can structure their token sales to address their specific needs, whether that is to raise early capital or to fund ongoing development and enhancements.

3. Community Building

Successful TGEs not only raise money but also create a community of early supporters. This aspect provides:

User Base Growth: TGEs can build new users and create participation within the project ecosystem.
Engaged Stakeholders: Early token holders often "invest" in the project's success and provide valuable customer feedback to the community.

4. Token Distribution

TGEs create the initial allocation of tokens among participants. For business leaders, this provides:

Ecosystem Incentives: Tokens establish incentives to align team members with the success of the project long-term, incentivize developers and partners, and drive development on the ecosystem platform.
Liquidity Creation: With an initial distribution of tokens businesses can create liquidity and stabilize prices discovered among buyers and sellers.

These characteristics make TGEs an effective mechanism for business stakeholders in the blockchain realm to raise capital, develop communities, and create the tokenized ecosystems to foster innovation and growth.

Common Token Generation Events

From a business leader's view, Token Generation Events (TGEs) have a variety of fundraising and community-building possibilities. Here is a summary of the types of TGEs:

1. Initial Coin Offerings (ICOs)

ICOs are when entrepreneurs raise funds and issue utility tokens:

Flexibility: Founders can develop the tokenomics and raise funds with little restriction of rules.
Far Reach: CEOs can raise funds from a worldwide pool of stakeholders without using traditional intermediaries.
Lower Costs: Managers can raise funds at a lower cost than traditional fundraising methods.
More Risk: Entrepreneurs are exposed to increased scrutiny from regulatory bodies and there is a greater potential for fraud.

2. Security Token Offerings (STOs)

STOs are when tokens are issued by an entrepreneur to represent ownership in assets, are usually regulated:

Regulatory Compliance: Founders can issue tokens that comply with securities laws, reducing legal risk.
Asset Backed: CEOs are able to tokenize an actual asset and possibly attract a more traditional investor.
Transparency: Managers benefit from the blockchain recording and reporting.
Investor Protection: Entrepreneurs can offer incentives that are consistent with securities, which could increase investor confidence.

3. Initial Exchange Offerings (IEOs)

IEOs occur when a crypto exchange conducts the offering:

Credibility: Founders can gain "trust" from the exchange sampling the process.
Instant Liquidity: CEOs benefit from instant liquidity as the sale occurs and tokens are immediately available to trade on the exchange.
Marketing Help: Managers can take advantage of the exchange’s user base and marketing contributions.
Higher Costs: Entrepreneurs may have to pay substantial listing fees and revenue sharing with the exchange.

4. Initial DEX Offerings (IDOs)

IDOs occur is when a decentralized exchange conducts the offering:

Decentralization: Founders can credibly be aligned with the blockchain principle of decentralization.
Cost Effective: CEOs will only have to pay the listing fees and not the sales royalties of an IEO.
Instant Trading: Managers can provide immediate trading capabilities to holders of tokens.
More Technical: Entrepreneurs may find the navigation with decentralized exchanges more difficult.

Each TGE type presents its own opportunities and challenges for business leaders, and require a serious consideration of regulatory, finance, and strategy when deciding which method is most suitable to fundraise.

What is an IDO: Unlocking the Future of Fundraising | TokenMinds Guide

ICOs, IPOs, and TGEs: The Differences

ICOs, IPOs, and TGEs are fundraising and token distribution strategies within the finance and crypto continuum. Below is a comparison of their differences:

Initial Coin Offerings (ICOs)

Fundraising Method: ICOs allow startups to raise money using cryptographic tokens.
Regulation: Generally less regulated and falls into a gray regulatory area.
Stage: Typically occur during the early stages of a project even before the product is built, or may not have even been conceptualized.
Offer: Offer utility tokens or cryptocurrencies and not shares in the company.

Initial Public Offerings (IPOs)

Fundraising Method: Traditional route of companies that want to become public by raising funds through the sale of their shares.
Regulation: Heavy regulation from the governing financial regulators.
Stage: Usually occurs when a company has a track record and is looking to grow and expand.
Offer: Offer shares of the company which gives the buyer ownership in the company.

Token Generation Events (TGEs)

Fundraising Method: Marks the new issuing and distribution of digital tokens on a blockchain network.
Regulation: Regulated according to the type of token and jurisdiction.
Stage: May occur at any stage in the project development timeline.
Offer: Usually utility tokens for specific use-cases within a project ecosystem.

TGEs include various methods of launching a Security Token Offering (STO), Initial Coin Offering (ICO), Initial Exchange Offering (IEO), or Initial DEX Offering (IDO). The mechanism chosen is dependent on or dictated by regulations, relevancy to target audiences, and the goals for project or project teams.

Steps to Launch a Token Generation Event

Let’s have a look the 4 steps how to launch a Token Generation Event:

1. Create a product

When you engage in a token generation process, the first step is to create a product, i.e., you need to have a product that leverages your token before you move on to the next step. You could develop a blockchain-enabled product by getting the advice of a qualified blockchain advisor. Also, consider getting a legal advisor as well, so that they could let you know if what you want to develop is in compliance with provisions in your regulatory structure.

2. Prepare to draft your whitepaper

One of the most important marketing items for your token-generating event is the whitepaper. This is the document that describes the market problem and the plan to leverage blockchain technology to address it. Key elements of the whitepaper include the goals of the project, the team, the roadmap, proposed percentage token distribution, and the legal considerations of your business.

3. Engage a community

By creating a community of supporters, you will be able to successfully conduct your token sale marketing. Therefore, build a community to support you in selling the project and importing enthusiasm. (Discord, Slack, Telegram, and Twitter are some audience engagement channels where the crypto community can help spread the news about your product.) And, as important, once you establish a community, it is crucial to adequately maintain it by regularly engaging with that community.

4. Reach out to exchanges for token listings

When you are ready for a token-generating event, one of the best approaches to act on marketing to get the most leads or interest in your token project is to reach out to various exchanges about listing your token for trading on the open market. In general, it is good to have your token listed on reputable exchanges.

Advantages of TGE for B2B

On top of access to funds, TGEs help B2B firms develop strong ecosystems and partnerships. By creating digital tokens, firms can incentivize all of their stakeholders, including suppliers, partners, and clients/customers, to be participants of the ecosystem. These tokens can reward different participants for their loyalty in one way, or can also provide a means of transaction or access to services/benefits that would create value to the participant in exchange for that token. The decentralized nature of TGEs means that incentives are aligned throughout the network ecosystem, and collaboration can develop. Finally, the transparency of blockchain and tracing for token activity create a level of trust between business partners that is important in the B2B context. TGEs therefore present compelling advantages for creating avenues of funding and development of innovation in the B2B environment.

Pros and Cons of TGE for Business Stakeholders

Token Generation Events (TGEs) have benefits and drawbacks for business stakeholders, including founders, managers, and CEOs:

Pros

Efficient Fundraising: TGEs are effective for raising capital because they allow businesses to access a worldwide pool of stakeholders without the traditional capital-raising structures.
Community Building: TGEs allow you to build an engaged user base as early as possible in order to develop a strong base of business clients.
Flexible Tokenomics: Founders and CEOs can create token mechanisms that will allow for proper balancing of supply and demand without incentive to venture capitalists or traditional stakeholders.
Global Reach: TGEs extend the reach of a project to a global audience of stakeholders.
Decentralized Funding: Not all TGEs require intermediaries and funding can be raised directly from stakeholders without centralized institutions.

Cons

Regulatory Uncertainty: Many countries are behind on their regulations concerning TGEs - leading to a probability of legal risks for both the project and the investor.
Security Risks: A TGE can be hacked or breached at a very high scale and/or can lead to the misappropriation of investor funds or loss of personal information.
Market Volatility - The volatility of the cryptocurrency market can lead to significant swings in tokenworth in a short period of time - including total loss.
Project Viability: Just because a TGE occurs - doesn't mean that the project is worthwhile. In other words, some simply do not deliver on potential, and some fail altogether, losing investor funds.
Expectations Management: Business leaders need to prudently manage community expectations and follow through on their product promise in order to maintain their credibility.

Business stakeholders have to weigh the pros and cons of TGEs very carefully - and they still need to have a plan to manage challenges round to the upside of the potential.

The Future of TGEs: Evolving Trends and Landscape for B2B

The future of Token Generation Events (TGEs) for B2B stakeholders is undergoing important changes. Greater regulatory clarity and compliance models will provide more legal certainty and probably attract institutional stakeholders. The integration of TGEs into Decentralized Finance (DeFi) and Web3 ecosystems will likely create increased functionality and interoperability ultimately creating more sophisticated tools for B2B participants to raise funds and build ecosystems.

We are also seeing an increased focus on the necessity for tokens to have utility and real-world application, which could lead to more sustainable and value-driven B2B token projects. Additionally, we envision the development of new funding models, such as Decentralized Autonomous Organizations (DAOs) and liquidity bootstrapping pools, to create additional channels for capital raising and community engagement for B2B stakeholders. As these trends develop, B2B organizations will need to keep their eyes on the road and remain flexible to capitalize on the early TGE space.

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FAQs

1. What is the goal of a TGE?

The main goal of a Token Generation Event (TGE) is to market the tokens for use and trading. An ICO is primarily focused on raising money to launch the project whereas TGE is focused on launching the tokens and allowing the user to use the services of the project, or govern the project. Why is this important? This is important because it puts a community in place for the project, tokens that will effectively begin to work, and are capable of use.

2. How does TGE differ from ICO?

The primary differences between a TGE and ICO are in the focus and timing. ICOs raise money early in the project’s life cycle—often before the project has even been developed--and focus on fundraising and investment. TGEs occur after the fundraising phases occur, and the official launch of tokens that will be used within the project environment occurs once the TGE has concluded. TGEs focus more on distributing the tokens and enabling utility for the token, so they are lower risk than ICOs by nature and don’t have the speculative characteristics associated with investing in early stage projects.

3. What type of tokens are often issued in a TGE?

At a Token Generation Event (TGE), there are four types of tokens that are most common - utility tokens, security tokens, governance tokens, and platform tokens. Utility tokens grant access to services, or functionality, within an ecosystem. Security tokens grants ownership, or rights associated with ownership, in an underlying asset. Security tokens are subject to regulation. Governance tokens allow for holders of the token to engage in the decision making process about the project. Platform tokens allow for transacting or interaction that occurs on a blockchain platform.

4. How do businesses benefit from TGEs?

Businesses can benefit from TGEs, by facilitating the ability to raise funds for future projects, the development of a strong community of engaged participants, and regulatory compliance. TGEs can facilitate the distribution of tokens within a project which aids in the distribution of tokens across a user base, creating a decentralization environment, and continuing a secure network. With the appreciation of value of the TGE token and establishment of a loyal user base–engaged long after the TGE project is prolonged, has a compelling impact on the direction of the project. The TGE not only supports the community aspect of usability, but as regeneration a functionality token makes it clear and actionable, enabling the usability of, in the project’s case, who is being launched.