Crypto TGE Revolution: Public Offerings Rise, Airdrops Lose Favor?

Article by: Taiki Maeda

Translated by: Saoirse, Foresight News

Once upon a time, airdrops were the preferred method for Token Generation Events (TGEs). Projects distributed large amounts of free tokens to users in hopes of cultivating a loyal community of holders and promoters. For a period, this approach was indeed effective. The allure of “free tokens” created a viral hype cycle — lively chatter on Discord, continuous buzz on X (formerly Twitter), and users depositing total value locked (TVL) into untested smart contracts just to earn a little extra yield.

However, there is no such thing as a free lunch. Airdrop farming became increasingly sophisticated, with “witch attackers” (users forging identities to claim multiple tokens) gaining notoriety. Ultimately, airdrops turned into a “liquidity exit tool” during TGEs — arbitrageurs selling the free tokens to investors who bought on the first day. Project teams then realized they weren’t really building communities but “feeding locusts” (a metaphor implying arbitrageurs only loot profits without engaging in the community).

The New Trend in Public ICOs

Instead of airdropping tokens to the public, project teams have adopted a new approach. They discovered that offering a seemingly “generous” high valuation could attract more funds from retail investors and funds. What’s the new pitch? “We give you an early buy-in opportunity — almost like it’s free!” This “dopamine rush” from this model is similar to airdrops, but with an added “paywall,” and it’s packaged as a “fair launch.”

Theoretically, this approach makes sense. People tend to value what they pay for more, driven by psychological factors like the “endowment effect” (the tendency to value owned items higher). Therefore, users are less likely to sell their tokens on the first day of the TGE. Additionally, this “generous ICO” allows project teams to raise more funds rather than giving away tokens for free. In return, retail investors can participate in a liquidity-rich, profit-potential trade.

Case Studies

PUMP raised about $600 million at a $4 billion valuation. Although the token price later declined, it still maintained a trading volume of around $4.4 billion, and presale participants had the opportunity to sell tokens at a 75% profit during the TGE.

XPL launched a liquidity mining event, raising $50 million at a fully diluted valuation (FDV) of $500 million. Somehow, as the crypto community fervently chased the token, its FDV soared to $16 billion, and investors achieved extremely high returns. Even if the token price later fell, presale participants still enjoyed approximately 6x gains.

Future Outlook

Currently, two highly anticipated ICO projects are ahead of the TGE: MegaETH and Monad. MegaETH plans to raise about $50 million at a valuation between $900 million and $999 million FDV; Monad aims to raise nearly $200 million at a $2.5 billion FDV. Notably, neither project’s product has launched yet.

While there are no guarantees of profit, the market generally considers these public sales to be “good deals.” This sentiment is reflected in the market response — MegaETH’s subscription overshot by 27.8 times.

But here’s the question: where does the money come from? The answer is from everyone who buys these tokens during the TGE (the same logic applies to airdrops). As long as people blindly chase these tokens during the TGE, for most participants, it will be a profitable trade.

I expect this trend to continue, but I also want to caution everyone about a few points. More projects may adopt this method for their TGEs in the future, but not all will be good opportunities. Over time, the market will become more efficient, and these arbitrage opportunities won’t last forever. Public ICOs are not “money-printing machines.”

Since Coinbase acquired Echo/Sonar (project name), future BASE tokens are likely to be launched via ICO rather than airdrops.

Additionally, this new trend could pose challenges to the entire altcoin market. The “marginal buyers” (those who ultimately decide to buy and influence supply and demand) in these ICOs are mostly existing altcoin holders. As more funds flow into ICOs to support high FDV “fantasy projects” (projects with only concepts, no actual products or implementation capabilities), liquidity for these projects will diminish. Many such projects faced setbacks on October 10, and in the future, “player-versus-player” (PvP) competition among investors will only intensify.

(Note: Taiki Maeda believes that the cryptocurrency market will experience a K-shaped recovery, with Bitcoin and tokens with buyback mechanisms in the recovery segment, while overvalued infrastructure, unlock pressures, and junk projects will decline.)

In the future, the gap between high-quality and low-quality tokens may continue to widen. Tokens with a strong monetary premium (value support intrinsic to the token) and good cash flow will perform better, while tokens supported solely by narratives or hype will perform poorly. Everyone should exercise caution in managing their funds.