Token Distribution
The plan for how a project's total token supply is allocated among various stakeholders — including the team, investors, community, ecosystem grants, treasury, and public sale. Token distribution is a critical element of tokenomics because it determines initial ownership concentration, vesting schedules, and potential sell pressure over time.
“A typical token distribution might allocate 20% to the team (vested over 4 years), 15% to private investors, 40% to the community treasury, 10% to ecosystem grants, and 15% to a public token sale.”
Tokenomics
The economic model and design of a cryptocurrency token, encompassing its supply schedule, distribution plan, utility within the ecosystem, value accrual mechanisms, inflation/deflation dynamics, and incentive structures. Well-designed tokenomics align incentives between all stakeholders and sustain long-term value. Poorly designed tokenomics can lead to unsustainable inflation or wealth concentration.
Vesting
A schedule that gradually releases tokens to their recipients over a defined period, preventing large holders from immediately selling their entire allocation. Vesting typically applies to team members, advisors, and early investors. A common structure includes a 'cliff' (an initial lockup period where no tokens are released) followed by linear or periodic unlocking. Vesting reduces short-term sell pressure and aligns long-term incentives.
Airdrop
A distribution of free tokens sent to wallet addresses, typically used to reward early users, bootstrap a community, or distribute governance tokens. Airdrops may be based on criteria like holding a specific token, using a protocol before a certain date, or participating in governance. Retroactive airdrops reward past usage of a protocol.
Token Supply
The quantitative metrics describing a token's availability: Circulating Supply is the number of tokens currently available in the market; Total Supply is all tokens that have been created minus any that have been burned; Max Supply is the absolute maximum number of tokens that can ever exist (if capped). These metrics directly impact market capitalization calculations and price analysis.