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The token distribution model or break a crypto project. With so many projects competing for attention in a crowded market, fair, transparent, and effective distribution is essential. When investors are considering backing a new token presale, there are several key factors they analyze to determine if the model is structured for success.
Total supply
The total supply refers to the maximum number of tokens that will ever exist for that blockchain. This is an important factor because it gives investors clarity on the potential dilution or scarcity of the token. Many investors prefer to back projects with a fixed total supply, as it provides confidence that their share of ownership will not be inflated away over time with new token issuances. A low total supply also signals that the token aims to be a store of value, while a higher total supply tends to imply the token is meant more for utility purposes. When assessing a distribution model, helps to understand the rationale behind the total supply and ensure it aligns with the goals of the project.
Distribution split between presale and launch
how to buy RETIK tokens? Token distributions are structured with a presale portion for early backers while reserving a portion for the official launch. The presale allows core supporters to gain allocation before the token is listed on exchanges. It also helps fund development before launch. The split between presale and launch varies significantly between projects. Some presales are as high as 80-90% of the total supply, while more investor-friendly models aim for 30-50% of the presale with the remainder for launch.
Lock-up periods
To help provide confidence and prevent presale participants from immediately dumping their tokens, most projects institute lock-up periods. This requires presale buyers to hold their allocation for a set time before being allowed to sell or transfer the tokens. Standard lock-up periods are usually between 3-6 months. Longer lock-ups demonstrate further commitment from early buyers. It’s also preferable if lock-ups are encoded at the protocol level via smart contracts rather than relying on individual participants to hold.
Price and purchase caps
Setting fair rules around price and purchase caps prevents “whales” from monopolizing a presale. Many projects tier the presale price, with earlier contributors paying lower prices than later ones. This rewards early believers. Caps on the amounts contributors purchase also help distribute tokens widely. For example, a project may set a $5,000 individual cap during the first round, and then raise it to $50,000 for the second. This ensures a wide range of community members participate. Evaluating the price and purchase terms helps determine if a presale favors concentration by a few large holders or allows fair access.
Vesting periods
While presale buyers take on a degree of risk by supporting the project early, the founders and team often receive token allocations without payment. To ensure the interests of creators and investors align, vesting periods are commonly implemented for team members. Vesting means tokens are granted on a staggered timeline, for example, 20% at launch, 20% after a year, 20% after two years, and so on. Vesting demonstrates that team members are committed to the long-term success of the project.
