What Is TGE Token? Token Generation Event Explanation.

What Is A TGE(Token Generation Event)?

To explain the meaning of a Token Generation Event (TGE), we should understand the term "Token" first. A Token is "built" on a specific programmable blockchain, such as Ethereum. In general, it represents a digital unit of an asset or utility. It is an essential component of the crypto-economic system for projects. To create Tokens, the company behind projects will choose crowdfunding by ICO (initial coin offering), which means using cryptocurrencies to raise funds. However, not all projects will choose ICO, instead, they may opt for a TGE, short for Token Generation Event. It means the company of the specific project uses blockchain technology to generate tokens and sell immediately deliverable Tokens to persons other than persons who control the company.

What Are the Difference Between TGE and ICO?

Token Generation Event (TGE) and Initial Coin Offering (ICO) are served the same purpose, a form of crowdfunding and bootstrapping a project. The processes of ICO and TGE are actually very similar. First, after the project is priced, regardless of whether it will write a smart contract or not, the company will provide a form that requires participants to fill in the subscription amount, wallet address, and remittance to the designated address. If the address is the address of the smart contract, it will be automatically executed, and the contracts will automatically send the subscribed cryptocurrency to the provided wallet address when executed. Some ICOs may require KYC (Know Your Customer), and investors can only participate in the subscription after being added to the whitelist.

Although TGE and ICO have the same purpose, however, the features are not the same. When ICO is mentioned, it reminds us the "fundraising", so for some countries, regulatory authorities may rule ICOs as a security, and thus be liable to tax. In this case, people create the phrase "Token Generation Event (TGE)", it simply means "the creation of tokens and running on blockchain". Since the tokens are the component of a product, so Token Generation Events do not belong to securities. In this case, many projects now may use TGE instead of ICO, so as to not incur a tax penalty.

Stay tuned to CoinCarp Social Media and Discuss with Us:
Twitter |Telegram |Reddit |Discord