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28 April 2021

An overview of DeFi tokens initial distribution

Token economy is one of the hot topics for decentralized projects. In this article, we look at how some of the top projects decided to allocate the initial tokens. Whether you're looking to start your own project, or are looking to invest in a new one, this article will show you everything you need to know 😉.

Team and investors share

From our analysis we can see most projects reward between 10% and 50% of the total token supply to the team and investors. The numbers vary between projects and not all projects report how tokens are distributed between team, shareholders, and investors. All projects in this report allocate the majority of tokens to the network and community.

Vesting period

Projects can decide to assign a vesting period before founders and investors can dispose of their tokens, this is done to ensure that the team has an interest in the health of the project in the medium and long term. Unlike traditional vesting, many Ethereum projects adopt a continuous vesting model, where tokens are awarded at a constant rate at every block.

A common vesting duration is 4 years, which is used by 4 of the 11 projects in this article. Other projects use a shorter vesting schedule (1 to 2 years).

Fair launch model

Fair launches are a different way to distribute the token, where community participation is rewarded. Under this model, the token is not pre-mined and distributed to the teams and shareholders, instead tokens are awarded to user that are active member of the community or provide services like liquidity.

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Francesco Ceccon

Francesco Ceccon