Token allocation is the planned distribution of a project’s native tokens across insiders, investors, users, and protocol treasury, typically documented before launch or major fundraising.

How it works

Projects publish allocation pie charts: common ranges might include team and advisors (15–25%), private investors (10–20%), community/airdrops (5–15%), ecosystem grants, and treasury for future governance. Allocations tie to vesting cliffs and token unlock schedules — often four-year linear for team, shorter cliffs for investors.

Dual-structure deals pair equity in a devco with token rights via SAFT or token warrant. Investors diligence whether allocation matches roadmap needs and regulatory constraints. Excessive insider share or vague treasury control raises centralization and dump risk flags.

Allocations may change before TGE (token generation event); locked allocations appear on-chain after launch for transparency.

Why it matters

• Founders: Reserve enough tokens for hiring and grants without diluting community trust. Transparent allocation builds credibility with users and exchanges.
• Investors: Unlock calendars drive secondary pricing and fund marks. Concentrated investor allocation without lockups can crash post-TGE price.

Common mistake

Copying another project’s allocation chart without modeling your own unlock curve and float. Large simultaneous unlocks from team and investors create predictable sell pressure.

Related ideas

See also token unlock, token warrant, SAFT, and TVL.