Token Generation Event

Yanda
3 min readAug 18, 2022

A Token Generation Event (TGE) is a common practice in the cryptocurrency industry. This term is used when a new token is generated and released into the market.

Before going deeper and explaining this process, it is essential to understand the difference between coin and token, two concepts often mixed up.

Differences between coins and tokens

Coins are investments, and their value is based on a volatile market. They are mainly used as a storage of value.

coin vs token

Tokens are a kind of “digital asset” built on a blockchain and generated by a smart contract with different use cases; for example, they could be used as commodities or “voting power” in a specific DAO, and nowadays, they have become so popular thanks to DeFi (Decentralized Finance). Regarding regulation, the SEC (Security and Exchange Commission) and the Swiss Financial Market Supervisory Authority (FINMA) have broken up tokens into utility and security.

Utility tokens allow holders to use a network and other specific benefits explained by the team. Their value may fluctuate based on the supply and availability.

--

--