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The core tenant of any web3 project is a token.
@lstephanian and I explored key trends to find the optimal distribution.
Here’s what we found
@lstephanian and I explored key trends to find the optimal distribution.
Here’s what we found
Token distributions can be broken down into 6 main segments:
- Community Treasury
- Core Team
- Private Investors
- Public Sale
- Airdrop
- Ecosystem Incentives
We aggregated distributions across 60 projects to create a comprehensive analysis of notable trends.
- Community Treasury
- Core Team
- Private Investors
- Public Sale
- Airdrop
- Ecosystem Incentives
We aggregated distributions across 60 projects to create a comprehensive analysis of notable trends.
Community Treasury
Retained for future distribution through governance.
Seen as the “reserve pool” to be allocated through proposals.
Treasury allocations have increased - from ~20% in 2016 to ~40% in 2021.
Retained for future distribution through governance.
Seen as the “reserve pool” to be allocated through proposals.
Treasury allocations have increased - from ~20% in 2016 to ~40% in 2021.
Core Team
Reserved for founders, past and future employees.
Subject to the longest lock-ups, reflecting the team’s equity ownership for issuing the token.
Team allocations have been trending up - from ~5% in 2013 to ~20% in 2021.
Reserved for founders, past and future employees.
Subject to the longest lock-ups, reflecting the team’s equity ownership for issuing the token.
Team allocations have been trending up - from ~5% in 2013 to ~20% in 2021.
Private Investors
Allocated to capital providers who purchased equity that later converted to tokens, or tokens directly.
Also subject to lock-ups, generally in line with the Core Team.
Investor allocations have been trending down – from ~25% in 2013 to ~15% in 2021.
Allocated to capital providers who purchased equity that later converted to tokens, or tokens directly.
Also subject to lock-ups, generally in line with the Core Team.
Investor allocations have been trending down – from ~25% in 2013 to ~15% in 2021.
Public Sales
Sold to the general public.
Formerly referred to as the “ICO” portion of the supply,
Liquid at inception.
Public sales has fallen drastically - from ~25% in 2013 to close to 0% in 2021.
Sold to the general public.
Formerly referred to as the “ICO” portion of the supply,
Liquid at inception.
Public sales has fallen drastically - from ~25% in 2013 to close to 0% in 2021.
Airdrops
Rewarded to past users.
Liquid at inception, claimable based on a pre-set allocation for each address.
Airdrops grew in popularity during 2017 and peaked in 2018.
Airdrop allocations resurged in recent years - from ~0% in 2019 to ~15% in 2021.
Rewarded to past users.
Liquid at inception, claimable based on a pre-set allocation for each address.
Airdrops grew in popularity during 2017 and peaked in 2018.
Airdrop allocations resurged in recent years - from ~0% in 2019 to ~15% in 2021.
Ecosystem Incentives
Earmarked for growth programs.
Programmed at launch as ongoing token rewards.
An alternative to public sales, including liquidity mining and yield farming.
Ecosystem Incentives have increased massively - from ~0% in 2016 to ~20% in 2021.
Earmarked for growth programs.
Programmed at launch as ongoing token rewards.
An alternative to public sales, including liquidity mining and yield farming.
Ecosystem Incentives have increased massively - from ~0% in 2016 to ~20% in 2021.
Each project requires a unique token distribution.
Here’s how they stacked up across different web3 categories.
Here’s how they stacked up across different web3 categories.
L1s and L2s
Dedicated the largest portions to early stakeholders and a Public Sale.
Distributions were generally from earlier cohorts, meaning projects raised capital at a time when ICOs were more common.
Dedicated the largest portions to early stakeholders and a Public Sale.
Distributions were generally from earlier cohorts, meaning projects raised capital at a time when ICOs were more common.
DApps
Core Team hovered around 20%.
Investors sat around 15%.
Ecosystem Incentives reserved around 20%.
Core Team hovered around 20%.
Investors sat around 15%.
Ecosystem Incentives reserved around 20%.
DAOs
DAOs dedicated less to the Team (~10%).
A minimal amount went to Investors (~5%).
The most went to the Community Treasury (~45%) and Ecosystem Incentives (~15%).
DAOs dedicated less to the Team (~10%).
A minimal amount went to Investors (~5%).
The most went to the Community Treasury (~45%) and Ecosystem Incentives (~15%).
In 2021, we saw a clear shift of tokens favoring the community.
Whether it was an Airdrop, Ecosystem Incentives or the Community Treasury - DAOs were the driving force.
Whether it was an Airdrop, Ecosystem Incentives or the Community Treasury - DAOs were the driving force.
Optimal Token Distribution:
- 50% for the Community Treasury.
- 17.5% for both Team and Investors.
- 10% for Ecosystem Incentives to build a value-added community.
- 5% for an Airdrop to reward past users.
- 0% for Public Sales. Don't sell tokens.
Adapt and adjust!
- 50% for the Community Treasury.
- 17.5% for both Team and Investors.
- 10% for Ecosystem Incentives to build a value-added community.
- 5% for an Airdrop to reward past users.
- 0% for Public Sales. Don't sell tokens.
Adapt and adjust!
Token distributions are ever-evolving.
- Investor allocations are decreasing.
- Team allocations are increasing.
- Airdrops are a cornerstone.
- Public Sales have disappeared.
- DAOs have shifted ownership to the Community Treasury and Ecosystem Incentives.
Plan accordingly.
- Investor allocations are decreasing.
- Team allocations are increasing.
- Airdrops are a cornerstone.
- Public Sales have disappeared.
- DAOs have shifted ownership to the Community Treasury and Ecosystem Incentives.
Plan accordingly.
In a bull market, founders have the upper hand.
In the bear market, investors have the upper hand.
The one common denominator is community.
Give tokens to those who create meaningful value.
In the bear market, investors have the upper hand.
The one common denominator is community.
Give tokens to those who create meaningful value.
Expect more token distributions to favor active contributors.
With great tokenization comes great responsibility.
Allocate accordingly! https://mirror.xyz/lstephanian.eth/kB9Jz_5joqbY0ePO8rU1NNDKhiqvzU6OWyYsbSA-Kcc
With great tokenization comes great responsibility.
Allocate accordingly! https://mirror.xyz/lstephanian.eth/kB9Jz_5joqbY0ePO8rU1NNDKhiqvzU6OWyYsbSA-Kcc
