Why do 90% of projects end up failing at their TGE?

Written by: Antonio Sco

Compiled by: Luffy, Foresight News

In the past two years, I have collaborated on over 30 Pre-TGE projects, from which I discovered three unexpected key reasons that have led to the failure of most tokens during their TGE.

Projects that have raised millions of dollars are repeating the same mistakes. I have summarized some patterns: failed projects do not disclose issues; they only busy themselves blaming others; successful projects also do not share secrets; they only want to monopolize all the credit.

This leaves new founders confused, completely unsure of how to get started. So, what are the core keys to TGE? Without them, TGE is doomed to fail, so founders must invest most of their time in them.

As the founder of a marketing company, I am reluctant to admit it, but the answer is not marketing. Marketing can amplify good fundamentals, but without a solid foundation, even the most splendid marketing is just a house of cards that will collapse at a push.

The following are three rarely mentioned core factors that can destroy TGE projects.

Market Maker

Choosing to be a market maker is essentially like playing Russian roulette:

Best case scenario: Both parties have aligned incentives and share profits together;

Worst case scenario: They are scheming behind your back, causing your years of hard work to go to waste.

The issue of information asymmetry is terrifying; they will only show you successful cases and will not mention those failed experiences at all.

So, how should you choose a market maker? In 99.9% of cases, you should choose a market maker that is strongly recommended by a project team you trust or by someone you have directly collaborated with.

Do not trust recommendations from strangers; they can receive hefty referral fees from market makers and will strongly recommend even unreliable parties.

An important reminder: If the project fails, the one who bears the consequences is you, not them.

Even if you have the best marketing, the most active community, and the top team, as long as the market makers cause your token price to plummet by 50%, you will be powerless to turn the tide.

Tokenomics

Token economics is similar; you and your team may not have researched 50 token models yet or seen their actual effects.

You absolutely cannot directly copy the tokenomics of a successful project and assume it will be applicable to yours as well. Investors' goals and appetites are constantly changing, and if you want to attract them to buy in, you must adjust accordingly.

Similarly, the consultants will only show you their successful cases, while you won't see the projects that have gone to zero.

One additional point: If the current token economics is destined to ruin your project, then make the changes decisively.

Don't care:

Airdrop hunters will be angry;

People on social media will complain;

Seed round investors will be dissatisfied.

If under the current token model, the token price plummets by 90% after a week, they will still be dissatisfied, the only difference is that you will go bankrupt within three months.

Clearly, the best solution is to avoid this situation from the very beginning, but as an old Roman saying goes: “In dire straits, one must resort to desperate measures.”

Listing on the exchange

This is the point I want to emphasize the most. The issues of market makers and token economics will only emerge after the TGE, but collaborating with exchanges is the most painful and dangerous thing before the TGE.

Why the pain?

Communication is extremely difficult;

It's hard to coordinate a consistent schedule.

They often change their minds at the last minute, causing you to have to postpone the TGE.

Why is it dangerous?

Predatory terms can ruin your project;

Many teams will be scammed by fake representatives.

Spent millions of dollars to list the coin, only to attract selling pressure with no buying interest.

The fastest way to solve this problem: get to know the internal staff of the exchange and understand the baseline cost for listing coins to avoid being taken advantage of.

Due to information asymmetry, many teams waste hundreds of thousands of dollars in initial negotiations.

Conclusion

Everyone is waiting for a better market environment to start the TGE, but if you haven't done the above three points well, no matter how good the market is, it won't help your token stand firm. As a founder, you should focus your main energy on these three things while supervising other team members to do well in their respective areas.