What is Token Allocation?

Token allocation is the breakdown of how a project's total supply is divided among founders, investors, community, treasury, and advisors. It is defined at launch and encoded in vesting smart contracts.

How does Token Allocation work?

The project defines total supply and assigns percentages to each category.
Founder and investor tokens are locked with vesting schedules typically 4 years with a 1-year cliff.
Community tokens are distributed via airdrops, staking rewards, or grants.
Treasury tokens are reserved for future grants, incentives, or protocol needs.

Why does Token Allocation matter?

Allocation signals fairness and founder incentives. High founder allocation with short vesting is a red flag founders can dump quickly.

High community allocation signals long-term ecosystem focus.

Key features of Token Allocation

Vesting schedules align founder incentives with long-term success
Cliff periods prevent immediate dumps after launch
Disclosed in whitepapers for community evaluation
Enforced automatically by smart contracts

Examples of Token Allocation

Uniswap allocated 60 percent to community and airdrop, with team and investor tokens on 4-year vesting. A typical red-flag allocation: 80 percent founders, 5 percent community, 6-month vesting.