Distribution Models
token allocation strategy sovereign asset framework ownership architecture
Distribution Models define how tokens are initially and continuously allocated across various stakeholders in a blockchain ecosystem. This includes allocations to the founding team, early investors, community rewards, public sales, liquidity incentives, and treasury reserves. A balanced distribution model promotes decentralization, aligns incentives, and avoids centralization risks or sudden supply shocks.
Use Case: A protocol launches with a distribution model allocating 10% of tokens to the team (with a 2-year vesting lock), 15% to strategic investors, 50% to community rewards and liquidity mining, and 25% to the treasury and DAO governance. This ensures that active participants gain the majority share over time while maintaining reserves for development and sustainability.
Key Concepts:
- Team Allocation — Reserved tokens for founders and core contributors, often time-locked.
- Community Rewards — Mining, staking, airdrops, or gamified incentives for active users.
- Investor Tranches — Pre-sale or seed round allocations with vesting terms.
- Treasury & DAO — Funds controlled by governance for future development or ecosystem growth.
Summary: Distribution Models are crucial for long-term trust and stability. They determine who benefits from token growth, how control is shared, and whether a network truly empowers its users or concentrates power in early hands. Clear, transparent models foster credibility, decentralization, and healthy token velocity.