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Zeneca Op-Ed: On Token Generation Events (TGEs) and Launching Tokens

BY Zeneca •

April 21, 2025

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TGE (Token Generation Event) day is one of the most important days in a project’s lifecycle. So why then is it a flop for most projects? Why do most people find the majority of TGEs disappointing? What can teams do to make it better for all the various stakeholders: investors, team, users? That’s what we’re going to explore in today’s post.

The primary reason for a disappointing token drop fundamentally comes down to the expectations of all those who have a vested (or unvested) interest. A mismatch in expectations is the leading cause of disgruntlement. This is not an easy problem to solve for, because of all the different stakeholders and their varying expectations.

VCs and Investors are often looking to get some liquidity back from their investment, or at least to see the token trade at a higher valuation than what they invested at. Long time community members are hoping or even expecting to be rewarded for their loyalty. Airdrop farmers are hoping for a lucrative drop that would justify however much time and/or money they spent on and with the project. The team is generally looking to create some liquid value for themselves too, as well as for their advisers. And all the while as these interests conflict with one another, market makers and centralized exchanges are rubbing their hands together and salivating.

It’s virtually impossible to balance all these expectations. What’s best for the investors is often not what’s best for the community, and vice versa. There’s only really one thing that makes every single group happy: a high token price, and one that continues to climb higher. And that is something very, very, very, very difficult to do. So it’s no wonder most TGEs are seen as a failure.

Before we talk about what teams could do to increase their chances of success, let’s take a step back and look at a few reasons why a project might want to launch a token in the first place:

  1. What they’re doing can’t exist without a token. They’re doing something fundamentally onchain and with novel mechanics that simply wouldn’t work without a token. This is often the best reason.
  1. They genuinely want to decentralize the protocol and governance of it — this is probably the second best reason, but also the hardest one to actually pull off. Simply because people don’t care about governance, so the tokens are almost always going into the hands of those who don’t care. This is also the excuse many teams use when it comes to explaining why they’re launching a token. “What’s the utility?” people will often ask, and then groan when the response they receive is “it’s a governance token”.
  1. They want to create a liquid market so that all parties can make money. Investors, advisors, the team, and the community. It’s hard to deliver monetary value back to everyone involved without a token, thus they launch a token to satisfy this demand.
  1. To generate attention and mindshare, resulting in more awareness and ultimately more users of the protocol. “Come for the airdrop, stay for the product” is often the mentality team’s take. When it works, it’s brilliant — unfortunately it rarely works this way, and the tens or hundreds of thousands of “users” they claim to have are 99% bots and airdrop farmers that disappear as soon as the token drops.
  1. They’re feeling pressured by investors and/or community members to drop a token (hopefully I don’t need to say this, but this is by far the worst reason for launching a token).

The problem with all of this though is that whatever the intention behind a token is, not everyone will share the same perspective. This is again because, ultimately, everyone just wants to make money. So if you’re trying to optimize for decentralizing the protocol and getting the tokens in the hands of as many people as possible, you’re going to have 100 money hungry stakeholders to every 1 genuine patron of decentralization.

In order to increase the chances of a succcessful token, projects will often try their hardest to manipulate the price. This is done via tokenomics and/or by keeping the circulating supply as low as possible, something called the low-float high-FDV (fully-diluted value) approach. If there are only 5% of the tokens in circulation, it’s far easier to maintain a high price vs if 100% of the tokens are circulating. That’s the logic, at least.

They can also try and manipulate the price with the help of market makers — companies that specialize in providing liquidity and volume to a token upon launch to ensure a stable market. Sometimes part of the contract is to maintain a minimum token price.

A lot has been spoken about the low float / high FDV approach. This is basically a way of trapping unwitting market participants who don’t know or understand the tokenomics. It used to be a huge issue but fortunately the market is finally wisening up to such shenanigans, and beginning to reject projects that take this approach. I won’t rehash it all here, but I can’t recommend highly enough this excellent article by Cobie on the topic.

So what makes a good TGE? Again it comes down to the perspective we’re approaching this question from, but for a general list, I think these are the things that will most people will consider to decide if a particular TGE was a success or not:

  • No bugs, exploits, or other technical issues with launch
  • Bots and snipers are minimized or straight up prevented
  • There’s enough liquidity for trading on decentralized exchanges
  • Airdrop recipients are happy resulting in plentiful positive dialogue on social media
  • The token price goes up

“At the end of the day, all roads lead to wanting token price to go up.”

ZENECA

At the end of the day, all roads lead to wanting token price to go up. You can make up for bugs and bots if your token performs well. It will by default make airdrop participants happy, as well as every other stakeholder.

So how do you make token price go up? Ultimately, of course, it’s supply and demand: you need more buyers than sellers, buying in greater volume than the sellers are selling in. In the short term this is largely narrative and sentiment driven, but as time goes on, it becomes product driven. It all comes down to having a good product that people actually want to use. Secondary to this (by a long way) is by having tokenomics designed in a way to make it easier for token price to go up, either by the aforementioned and ill advise low-float high-fdv approach, or something more sensible: reasonably cliffs and vesting terms for the insiders.

Let’s talk about airdrops for a moment. The main reasons for a project to do an airdrop are to generate marketing and attention, and to reward early users of a protocol; either way, it’s to generate goodwill towards the project in the hopes that they’ll acquire and retain more users. Why else would they give out 20, 30, sometimes even 50% of their overall token supply? An amount that is worth millions, sometimes tens or even hundreds of millions? The payoff needs to be worth it. (If you want to read more about airdrops, I wrote a guide on them a few weeks ago).

Teams, obviously, want to get the tokens in the hands of real users and not bot farms spinning up thousands of wallets trying to game the system. It’s somewhat of an arms race between the airdrop farmers and the teams dropping tokens, with increasingly sophisticated tooling coming out to assist both sides in this war. This is yet another thing teams approaching TGE have to contend with, and another way things can go very south very quickly.

“It’s somewhat of an arms race between the airdrop farmers and the teams dropping tokens, with increasingly sophisticated tooling coming out to assist both sides in this war.”

ZENECA

If all this is sounding like it’s difficult to have a successful TGE, that’s because it is! It is insanely difficult. A word of advice to anyone thinking of launching a token is to ask yourself if you really need a token in the first place. Many of the most successful companies in crypto have no token: Polymarket, PumpFun, MetaMask, OpenSea, Art Blocks, Lido, Ledger, Etherscan. Instead, they rely on the more traditional business model of taking a small fee from each transaction. They’re all doing pretty well for themselves, wouldn’t you say?

Over 99.9% of tokens fail. So you’re essentially betting that you’re in the top 0.1% if you decide to launch a token: one of the truly exceptional projects. You might be, but you probably aren’t. There’s no shame in admitting and accepting this either because you’ll be in some damn great company if you do decide not to drop a token; see above.

I firmly believe there are far too many tokens in existence. Even if we exclude all the memecoin mania and pumpfun psychopathy, there are still far too many. Most teams look for reasons to launch a token and will find plenty of them. I suggest that instead, they look for reasons not to launch a token. They’ll find plenty of them too, and dare I say, they are more likely to be founded in logic and reason rather than hype and speculation and greed that powers most token launches.

I urge teams to consider the list of reasons I mentioned earlier in this post, and focus on #1. Build an excellent product that users genuinely want to use, and then only launch a token if what you’re doing or trying to do literally could not be done without a token. It’s like what Charles Bukowski said in his poem “so you want to be a writer”, if it doesn’t come bursting out of you, don’t do it.

Only launch a token if you can’t not launch a token; then and only then might you have a chance of success.

Editor’s Note: Zeneca is an ex-professional poker player turned crypto investor, sharing tips on making money and staying sane. Follow his newsletter at zeneca.xyz.

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