Token Generation Event (TGE), Public Token Sales, and Distribution
Last updated
Last updated
A project’s token is often created around the time the product is launched, though the two don’t necessarily need to coincide exactly. The primary goal of a public token sale is to raise funds for ongoing protocol or product development while distributing tokens to a diverse set of holders. Valuations at this stage are often higher than those in private rounds, but not always.
Because early investors took on more risk, they typically receive more favorable terms; however, the community still expects fair participation opportunities and does not want to be “dumped on” by earlier, larger stakeholders. One approach is to offer the community a modest valuation but cap each allocation to prevent significant imbalance.
In a perfect world, the community would receive a “fair launch” at a low valuation, yet practical considerations—such as the need for product development funding—make that challenging. While it is possible to conduct a purely public token sale, many early-stage crypto teams avoid the complexity involved. In many cases, the Token Generation Event (TGE) aligns with a token sale, though these offerings today are different from the 2017/2018 ICO wave. Some teams skip public sales entirely and opt for airdrops to broaden token distribution. Ultimately, wide distribution is vital to a decentralized protocol or product.
One option is building your own web-based sale platform, which requires integrating to third-party Know Your Customer (KYC) solutions. This approach gives you end-to-end control but also adds administrative overhead. Potentially creating such sites is easier with the advent of good AI (of course, don't forget to get security testing done on the token sale website!). Alternatively, you can partner with a platform like Coinlist, which simplifies the process but can be cumbersome for users.
Communication around token sales must be handled carefully, given the regulatory environment. Certain phrases, such as “investment,” “returns,” or anything implying guaranteed profit, should be avoided for compliance reasons. Price chat in officially channels is also frowned upon.
Regardless of whether you host a public sale, you’ll need a plan for distributing tokens to your community. This could involve airdrops, lockdrops, bounties, or other engagement-based methods.
Airdrops: Traditionally, airdrops were distributed widely without much targeting. These days, projects often focus on users who show genuine product usage or interest.
Lockdrops: These require participants to lock or stake existing tokens (e.g., ETH) in exchange for newly generated tokens, thus showing a level of commitment.
Bounties/Engagement: Projects can reward users who complete specific tasks or show consistent, high-value participation. Also put serious thought into a referral program, but note there are some extra challenges there.
While community ownership is essential, active engagement is just as important. Many teams create a “whitelist” of qualifying addresses to ensure tokens reach genuine supporters.
Listing tokens on exchanges can be complex. Regulatory guidelines discourage direct negotiation with exchanges; in practice, however, many exchanges request substantial listing fees to cover their operational costs. There have been reports—such as —that certain exchanges may ask for tens of millions of dollars to list a token.
Exchanges might also request to “borrow” tokens for market-making purposes, introducing a separate layer of risk if they cannot or will not return them. Nevertheless, listing on a recognized exchange can significantly boost visibility, albeit at the cost of fielding more support requests from newcomers unfamiliar with blockchain.