Token Launch Guide: From ERC-20 to TGE

A Token Generation Event (TGE) is a moment in a protocol's lifecycle that, if handled poorly, can permanently harm your project. This guide covers the technical, operational, and legal steps involved.

Phase 1: Token Contract Design

Your ERC-20 token contract should use OpenZeppelin's audited implementations as a base. Decide up front: Is the token mintable? By whom? Is there a max supply cap? Can tokens be burned? Can the contract be paused? Each feature adds attack surface — only include what you need.

Consider: ERC-20Votes (snapshot-based governance), ERC-20Permit (gasless approvals via signatures), and whether you need a transfer hook for tax/fee mechanics. If you include unusual mechanics, they need extra scrutiny in your audit.

Phase 2: Vesting and Distribution Contracts

Team, investor, and advisor tokens should be locked in vesting contracts — typically a 1-year cliff with 3–4 year linear vesting. This is a strong signal of long-term commitment to your community. OpenZeppelin's VestingWallet is a solid starting point. Custom vesting contracts require separate auditing.

Phase 3: Tokenomics Design

Define your total supply, allocation percentages (team, investors, treasury, community, ecosystem), and emission schedule. The supply schedule — how many tokens enter circulation and when — is often more important than the total supply. Projects that flood the market with tokens at TGE see immediate price pressure from early investors selling.

Phase 4: Legal Review

Before any public communication about the token, engage a blockchain-specialized law firm. Key questions: Does your token pass the Howey Test? Are you conducting a securities offering? Do you need to geofence certain jurisdictions (US is the most restrictive)? What regulatory exemptions apply? Legal costs here typically run $25,000–$100,000 for a serious launch.

Phase 5: Smart Contract Audit

Token contracts, vesting contracts, and any airdrop or distribution contracts all need auditing. Plan for 2–3 weeks of audit time plus 2 weeks for remediation. Public bug bounties on platforms like Immunefi are a good post-audit supplement.

Phase 6: The TGE Itself

Common TGE formats: Liquidity Bootstrapping Pool (LBC) on Balancer (price starts high, decreases over time, discourages front-running), fixed-price public sale, airdrop to existing users, or direct DEX listing. Each has different trust, fairness, and legal implications. Plan your day-1 liquidity: how much will you seed in the initial DEX pool? Low initial liquidity invites sandwich attacks and extreme volatility.

Post-TGE

Plan for: CEX listing outreach (start 3–6 months before TGE for Tier 1 exchanges), Coingecko/CMC listing, multisig treasury management, governance activation timeline, and an emissions dashboard for transparency. The work doesn't end at TGE — token holder expectations of communication and transparency go up significantly after launch.