Token Supply & Distribution Models | Asset Taxonomy

At a Glance

Total supply, emissions, and distribution shape incentives and market behavior. You'll learn common models and how to read allocation charts critically.

Supply ModelsAllocation ChartsVesting Schedules

Who Is This For?

•Investors evaluating token launches
•Founders planning allocations and unlocks

Learning Objectives

01Differentiate fixed vs inflationary supply approaches
02Read allocation pie charts and vesting schedules
03Spot red flags in distribution that create sell pressure

Section 1

Supply Models

How many tokens exist—and how that number changes over time—is fundamental to tokenomics.

Explore Supply Models

🔒

Fixed Supply

A hard cap on total tokens that will ever exist. No new tokens are created after the cap is reached.

HOW IT WORKS

Total supply is defined at launch. May be released over time (mining/vesting) but never exceeds the cap.

EXAMPLES

BTC

21 million cap, halving every 4 years

UNI

1 billion total, fully allocated

Various

Fixed supply at launch

Pros

+ Scarcity narrative
+ Predictable supply
+ Simple to understand
+ No dilution after full release

Cons

- No flexibility for incentives
- May not fund long-term development
- Can concentrate wealth early

Supply Model Quick Reference

Model	Supply Over Time	Scarcity	Best For
🔒 Fixed	Constant / Decreasing	High	Store of value
📈 Inflationary	Increasing	Low	Security rewards
🔥 Dynamic	Varies with usage	Variable	Utility tokens

Section 2

Distribution Plans

Who gets the tokens—and when—determines incentive alignment and potential sell pressure.

Sample Token Allocation

Click on each slice to see details.

Team & Founders

20%

Early Investors

15%

Treasury / DAO

25%

Ecosystem / Grants

15%

Liquidity Mining

10%

Public Sale / Airdrop

15%

Vesting Schedule Simulator

Slide to see how tokens unlock over time (48 months).

TGE (Month 0)Month 0Month 48

TEAM UNLOCKED

0%

of 20%

INVESTORS UNLOCKED

0%

of 15%

ECOSYSTEM RELEASED

0%

of 15%

TOTAL CIRCULATING

40%

of 100%

Unlocked: 40%Locked: 60.0%

Common Allocation Buckets

Team/Founders: Usually 15-25%, should have 3-4 year vesting

Investors: Usually 10-20%, 1-2 year vesting typical

Treasury/DAO: Usually 20-30%, governed by token holders

Ecosystem: Usually 10-20%, for grants and development

Section 3

Evaluating Fairness

Learn to spot red flags and understand the true valuation of a token.

Market Cap vs FDV Calculator

FDV (Fully Diluted Valuation) shows what the market cap would be if ALL tokens were circulating.

TOKEN PRICE ($)

CIRCULATING SUPPLY (M)

TOTAL SUPPLY (M)

MARKET CAP

$150M

Price x Circulating Supply

FULLY DILUTED VALUATION

$1,500M

Price x Total Supply

FDV / Market Cap Ratio:10.0x

10.0% of tokens are circulating. Moderate dilution ahead. Check unlock schedule.

Red Flag Checker

Check the boxes if these apply to a token you're evaluating.

Team allocation > 25% of total supply

High insider concentration

No vesting or very short vesting (< 1 year)

Insiders can dump immediately

Less than 20% circulating at launch

Massive future dilution

Major unlock cliff within 3 months

Imminent sell pressure

No public unlock schedule or vesting contracts

Can't verify claims

Risk Assessment:

0/5Looks Reasonable

Watch Out

Common Mistakes & Gotchas

Tokenomics can be confusing. Avoid these common traps:

💰

This token is cheap at $0.001, it's going to $1!

Price per token is meaningless. Check FDV (price x total supply) to understand true valuation. A $0.001 token with 1 trillion supply = $1B FDV.

📅

I'll buy now and sell after the unlock in 2 weeks

Everyone sees the unlock calendar. The dump often happens BEFORE the unlock as holders front-run. Or it's already priced in.

🔥

They're burning tokens so price must go up

Burns reduce supply but don't guarantee price increases. Demand must also exist. Many burns are tiny relative to total supply.

👥

20% team allocation is standard, no big deal

20% can be fine IF it has proper vesting (4+ years, 1-year cliff). Without vesting, the team can dump immediately after launch.

Golden Rule: Always check both the allocation AND the vesting schedule. A “fair” allocation with no vesting is worse than a larger allocation with proper long-term vesting.

Test Yourself

Knowledge Check

Let's see how well you understand tokenomics.