The Truth Behind TGE Failure: Market Maker Traps and Fatal Flaws in Tokenomics

Author: Antonio Sco

Compiled by: Luffy, Foresight News

Original title: Why do 90% of projects' TGEs end in failure?

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

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

This leaves new founders confused, completely unaware 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 into it.

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 glamorous marketing is just a house of cards that will collapse with a push.

The following are three rarely mentioned factors that can destroy the core of a TGE project.

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 scheme behind your back, causing years of your hard work to go to waste.

The problem of information asymmetry is very frightening; they will only show you successful cases and never mention those failures.

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

Do not trust recommendations from strangers; they can receive substantial referral fees from market makers, and even if the other party is unreliable, they will still strongly recommend them.

An important reminder: If the project fails, you bear the consequences, not them.

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

Token Economics

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

You absolutely cannot copy the tokenomics of successful projects and assume that it applies to you as well. Investors' goals and appetites are constantly changing, and if you want to attract them to buy in, you must adjust accordingly.

Similarly, consultants will only show you the successful cases they have, while you will not see those projects that have gone to zero.

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

Don't care:

• Airdrop hunters will be angry;
• People on social media will complain;
• Seed round investors will be dissatisfied.

If according to 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 be out of business in three months.

Clearly, the best solution is to avoid this situation from the very beginning, but as an ancient Roman proverb says: “In desperate situations, one must resort to desperate measures.”

Exchange Listing

This is the point I want to emphasize the most. The issues related to 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 suffering?

• Communication is extremely difficult;
• It's difficult 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 clauses can cripple your project;
• Many teams will be scammed by fake representatives;
• Spent millions of dollars to list coins, ultimately only attracting 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 cost benchmark for listing coins to avoid being taken advantage of.

Due to information asymmetry, many teams waste hundreds of thousands of dollars in preliminary 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, your token won't be able to stand firm. As a founder, you should focus your main energy on these three things while overseeing other team members to do their work in their respective areas.