Introduction

TGE Architecture Diagram (Source: Gate Learn Creator)

TGE (Token Generation Event) is a crucial milestone for DeFi projects transitioning from private to public domains, marking the shift from early-stage financing to public circulation. However, traditional TGE models have notable limitations: both low circulating supply/high FDV issuance and fair launch models struggle to maintain a healthy market structure long-term. Low circulating supply models often see price appreciation during private sale stages, leading to a lack of buying pressure in the public market and future selling pressure from large locked positions. While fair launches are transparent, they may lack sustained liquidity and insufficient long-term team incentives.

Market experience tells us that if ordinary buyers cannot participate in price formation, they lose interest; adequate on-chain liquidity is more important than short-term speculation. Against this backdrop, re-examining TGE models and exploring more rational issuance and pricing mechanisms has become an industry consensus.

Core Elements Analysis

DeFi native TGEs (Token Generation Events) are gradually replacing traditional token issuance models, becoming a crucial means for project financing and market participation. To achieve the triple goals of capital raising, price discovery, and community alignment, successful TGE models need to balance design in the following five aspects:

1. Financing Mechanism: On-chain LP replaces centralized listing fees
Traditional Web2 models rely on multiple rounds of private sales and CEX listings for financing, but this approach often leads to:

• Inflated FDV (Fully Diluted Valuation);
• High barriers to entry for ordinary investors;
• Expensive listing fees diluting project funds.

In contrast, DeFi projects tend to adopt on-chain liquidity injection for financing:

• Utilizing AMM models like Uniswap V3 for single or dual-sided LP configuration;
• Requiring teams and investors to participate in LP, forming real trading depth;
• Investor-injected capital not only provides initial funding but also directly establishes the token’s on-chain market.

This model combines “financing” with “liquidity building,” balancing capital efficiency and market sustainability.

2. Price Discovery Strategy: On-chain transparent bidding replaces “black box pricing”
Truly fair and effective price discovery should be based on an open, transparent market. DeFi native TGEs advocate:

• On-chain trading launch: All users participate in bidding equally;
• Unlock threshold settings: Can be based on time/price for phased release, preventing sudden large fluctuations;
• Team provides initial liquidity: Enhances credibility and buffers price volatility.

Unlike the traditional “flash pump” script after CEX listing, the on-chain discovery model emphasizes: sustained deep liquidity is more valuable than short-term speculation, avoiding price manipulation by whales.

3. Community Incentive Design: Rewarding real participants rather than simple “wallet snapshots”
Modern TGEs focus more on rewarding community contributors, avoiding initial circulating supply controlled solely by VCs. Typical projects include:

• zkSync: 66.7% allocated to community and ecosystem (including airdrops);
• Blast: 50% for community incentives;
• Ethena: 30% for ecosystem development, with 5% for airdrops.

In terms of incentive mechanisms, multiple projects explore:

• Phased airdrops (e.g., Ethena unlocks 50% initially, with the remainder linearly released over 6 months);
• Holding or task-based point rewards;
• Binding specific NFT rights for airdrop claims.

This precise incentive approach not only improves user retention but also helps build a long-term community ecosystem.

4. Contract Security: Audits and formal verification are the “passing grade”
TGEs involve large amounts of fund interactions, and security is the bottom line. Common security measures include:

• Multiple rounds of smart contract audits;
• Formal verification of key logic;
• Bug bounty programs.

For example, Kamino Finance explicitly states that its contracts have been audited by Solana security institutions, giving users more confidence. Investors should confirm the following before participating:

• Public audit reports;
• Security team background and vulnerability response mechanisms.

5. Compliance Practices: Forward-looking design to adapt to global regulations
As global regulations tighten, some projects are beginning to experiment with compliant token circulation designs, such as:

• Compliance pools: Only users meeting specific regulatory requirements can participate in unlocking or trading;
• Restricted withdrawal paths: Tokens can only be released through compliant on-chain channels during lock-up periods, meeting AML/KYC requirements;
• Dynamic unlock permissions: Adjust release logic based on user identity verification or regional policies.

Although these compliance mechanisms are not yet fully standardized, they indicate that DeFi projects are moving from “anonymous + unregulated” towards a more responsible and legitimate future path.

Case Studies

zkSync

Figure：https://www.zksync.io/

• Issuance and Airdrop Timing: zkSync’s token airdrop was completed in June 2024, involving early testnet users, bridge users, etc.
• Token Distribution: Total supply of 2.1 billion, with 66.7% for community and ecosystem rewards, 33.3% for team and investors.
• Unlock Mechanism: Initial airdrop and unlock completed in phases, subsequent tokens continue to unlock according to the predetermined linear release plan.
• Market Feedback: After the airdrop, secondary market liquidity was good, with price stabilizing after initial volatility. Community discussions on fairness of distribution continue, but overall adoption of fair on-chain auction/release mechanism aids public price discovery.
• Risks and Insights: High community allocation increases user participation, but ongoing attention needed on unlock rhythm’s impact on price; future unlock plans still require monitoring to judge supply-demand balance.

Blast

Figure：https://blast.io

• Issuance and Airdrop Timing: Blast token TGE launched in late June 2024, with airdrop claims completed at that time, and clear lock-up and linear release rules.
• Token Distribution: Total supply of 100 billion units, 50% for community incentives, 25.5% for core contributors, 16.5% for investors, 8% for foundation.
• Unlock Mechanism: Investor and team tokens locked for 4 years, with quarterly linear release after the first year; community incentives have begun phased release.
• Market Feedback: Active market liquidity after airdrop claims; FDV rapidly climbed on the first day and gained mainstream exchange support; users had mixed opinions on airdrop amounts and staking requirements, but overall liquidity and attention remained high.
• Risks and Insights: Large-scale community incentives bring high liquidity, but caution needed for selling pressure during concentrated future unlocks; long lock-up periods for team tokens require attention to long-term commitment fulfillment.

Kamino (Solana)

Figure：https://app.kamino.finance/earn/lend

• Issuance Status: As of June 2025, Kamino’s token issuance mechanism has been announced, but the main issuance date is yet to be finalized. The project continues community testing and security audits in the Solana ecosystem.
• Token Distribution: Total supply of 1 billion, with about 35% for community and grants, 20% for core contributors, 35% for advisors and key shareholders, 10% for asset pools and treasury.
• Expected Unlock: Community incentives and grants can be unlocked in phases, core contributors and advisors linearly release after the lock-up period.
• Market Feedback: Due to not yet having an official TGE, market expectations are high, but actual performance awaits verification after the airdrop and liquidity injection.
• Risks and Insights: Pay attention to project audit reports and community test results in advance, assess the impact of Solana network fluctuations on liquidity mining models; need to track TGE details (timing, scale) promptly once released.

Ethena

Figure：https://ethena.fi/

• Issuance and Airdrop Timing: Ethena’s first round of airdrops launched in June 2024, with the second major unlock completed in April 2025.
• Token Distribution: Total supply of 15 billion, 25% for investors (locked for 1 year then linear release), 30% for ecosystem development (including 5% first round airdrop), 30% for core contributors, 15% for foundation.
• Unlock Mechanism: First round airdrop unlocked 50% immediately with 50% linearly released over 6 months; subsequent unlocks follow the project’s published schedule, with about 13.75% tokens unlocked in one go in April 2025.
• Market Feedback: Significant price increase after first round listing, high community activity; second round unlock caused short-term fluctuations, but overall market matured, gradually absorbing the impact of unlocks.
• Risks and Insights: Pay attention to supply-demand changes brought by future unlock rhythms; evaluate how actual application scenarios (e.g., money market, bond mechanisms) support token demand.

EigenLayer

Figure: https://www.eigencloud.xyz/*

• Issuance and Airdrop Situation: EigenLayer’s token airdrop completed in Q1 2025, with community users able to claim tokens within specified periods, and subsequent release plans initiated.
• Token Distribution: Total supply of about 1.67 billion, 45% for community and ecosystem, about 29.5% for investors, 25.5% for contributors.
• Unlock Mechanism: Investor and contributor tokens locked for 3 years, fully locked in the first year, linear monthly release in the second and third years; community claims also have corresponding lock-up rules.
• Market Feedback: Due to the project’s high attention in security and re-staking areas, market reaction was positive after the airdrop; some users had concerns about the long lock-up period, but overall recognition of long-term value was high.
• Risks and Insights: Pay attention to actual ecosystem progress and how re-staking applications support token demand; be wary of how changes in the macro crypto market environment affect prices during unlock phases.

TGE Form Comparison Table (Source: Gate Learn Creator Max)

Trend Summary and Future Outlook

Reviewing the above cases, TGE models are evolving towards “on-chain native, community-oriented” directions, mainly reflected in the following aspects:

1. Cross-chain Issuance Becomes a New Trend
With the development of multi-chain ecosystems, more projects are choosing to issue tokens on multiple chains simultaneously or distribute through cross-chain airdrops. This not only helps expand the potential participant base but also assists tokens in establishing more decentralized initial liquidity, reducing the risk of dependence on a single ecosystem.

2. Contribution-Driven Incentive Mechanisms Gradually Popularize
Traditional airdrops often relied on wallet snapshots, while new-generation TGEs focus more on participation quality. For example, quantifying user contributions through task points, on-chain interaction behaviors, staking time, etc., to precisely allocate airdrops to real participants, effectively improving user loyalty and stickiness.

3. Anti-Manipulation Designs Continuously Optimize
To prevent TGE stages from being exploited by a few whales, project teams generally introduce KYC, anti-Sybil verification, multi-stage lock-ups, price threshold unlocks, and other measures. Some projects even design exponential release or asymmetric release strategies to avoid concentrated selling pressure and achieve a smoother market transition.

4. Compliance and Innovation Exploration Advance in Parallel
Against the backdrop of gradually clarifying global regulations, some projects are beginning to introduce compliant custody mechanisms (such as centralized custody, fiat reserves, etc.) to gain broader institutional trust. At the same time, there are still technical innovators like EigenLayer, which provides security infrastructure for other projects through a “double staking” mechanism. After completing its token airdrop, it continues to unlock and maintain high market attention.

Investor Advice and Risk Warnings

For investors participating in TGEs, attention should be paid to the following key elements and potential risks:

1. Lock-up and Release Rhythm
Lock-up arrangements directly determine the token supply rhythm and potential selling pressure. For example, Ethena’s second major unlock was completed in April 2025, releasing about 13.75% of tokens, which had a short-term impact on price. Although the market gradually absorbed this round of unlocks, subsequent unlocks will continue, and investors should continuously track relevant schedules and proportions to judge whether new supply shocks will form.

2. Supply-Demand Structure and FDV
The ratio of a project’s circulating supply to FDV is a core indicator for risk assessment. An excessively high FDV (Fully Diluted Valuation) can easily lead to inflated market capitalization, while if most tokens are concentrated among the team and funds, the release pressure is greater. Taking zkSync as an example, although its high community allocation ratio is beneficial for expanding the user base, the FDV pricing is relatively high, which may face price stagnation or downward risk if market demand cannot keep up.

3. Price Discovery Environment
Quality TGEs should ensure fair, transparent price formation mechanisms. If only a tiny circulating supply is provided, prices can easily be manipulated by early whales; conversely, if prices are too low, it will lead to large-scale arbitrage selling pressure in the short term. Reasonable mechanisms include: Fair Launch, phased unlocks, limit orders, and on-chain order books, all of which help form a stable and healthy price discovery process.

4. Team Commitment and Compliance
Long-term value needs to be built on continuous team commitment and institutional guarantees. Investors should prioritize attention to: whether the team and investors’ lock-up and unlock arrangements are reasonable, whether contract audit reports are publicly available, and whether KYC or AML compliance mechanisms are in place.

While compliance measures may limit early liquidity, they greatly reduce legal and black swan risks; for projects without compliance frameworks, investors need to pay special attention to the impact of potential policy changes.

5. Security and Contract Credibility
Smart contract vulnerabilities have repeatedly led to severe losses in TGE projects. It is essential to verify: whether the project has undergone top-tier audits (e.g., Trail of Bits, CertiK), whether bug bounties or formal verifications are set up, whether complex but unverified new mechanisms are used (e.g., multi-layer incentives, composite staking). Taking Kamino as an example, the project emphasizes contract security, gaining high community trust.

Summary: Five Recommendations for Investing in TGEs

• Remain cautious, don’t blindly chase hype due to airdrop excitement;
• Track unlock progress, avoid entering or exiting around large unlock events;
• Pay attention to mechanism design, especially FDV and circulation ratios;
• Focus on transparency, prioritize projects with audits, compliance, and comprehensive public documentation;
• Do Your Own Research (DYOR), especially avoid FOMO on high-valuation projects.

TGEs are opportunities but also risk-concentrated areas. Only in projects with rational structures and strong execution can long-term value be captured.