Jump to content
  • Sky
  • Blueberry
  • Slate
  • Blackcurrant
  • Watermelon
  • Strawberry
  • Orange
  • Banana
  • Apple
  • Emerald
  • Chocolate
  • Charcoal

Welcome to your community. We would like you to take a minute and read our newcomers guide.

Sign in to follow this  
cryptofreak

What percentage of Tokens are Investors entitled to?

Recommended Posts

Since last year July, a total of $19 billion has been raised through ICOs. Projects that see token offerings as a platform for fund raising must be able to evaluate trade-offs between keeping the tokens in order to fund the development team or allocating to investors a higher fraction of the tokens. 

 

It is very important to strike the right balance between the quantity of publicly distributed tokens and the founder allocation, because it will have a strong effect on the project’s long term prospects, especially due to the volatile nature of the prices of crypto-assets accumulated during the token sale. At the close of 2017, teams finalizing their ICOs saw a cut by over 60% in their projected runway. The volatile nature of the crypto funds realised through ICOs have added to the uncertainty that usually surrounds the growth of new startups.

 

For instance, the U network; as it realised a continual increase in the number of strategic partners, it exhausted its token supply (UUU tokens), despite allocating to the public just 40% of its tokens. This led to a planned buyback of tokens. While token buybacks may have a positive price effect, it could also be utilized in the future during bear markets as a stabilizing mechanism. 

Founders of ICO projects have to face the risks of the volatility of the crypto markets as well as launching within the market their newly created startups.

Choosing a model for token allocation entails a trade-off between making the best use of proceeds realised from the token sale, by issuing to the public more tokens as well as keeping enough tokens to support the present and future stakeholders in order to develop the network.

 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

×