An overview of DeFi tokens initial distribution

Token economy is one of the hot topics for decentralized projects. In this article, we look at how some of the top projects decided to allocate the initial tokens. Whether you're looking to start your own project, or are looking to invest in a new one, this article will show you everything you need to know 😉.

Team and investors share

From our analysis we can see most projects reward between 10% and 50% of the total token supply to the team and investors. The numbers vary between projects and not all projects report how tokens are distributed between team, shareholders, and investors. All projects in this report allocate the majority of tokens to the network and community.

Vesting period

Projects can decide to assign a vesting period before founders and investors can dispose of their tokens, this is done to ensure that the team has an interest in the health of the project in the medium and long term. Unlike traditional vesting, many Ethereum projects adopt a continuous vesting model, where tokens are awarded at a constant rate at every block.

A common vesting duration is 4 years, which is used by 4 of the 11 projects in this article. Other projects use a shorter vesting schedule (1 to 2 years).

Fair launch model

Fair launches are a different way to distribute the token, where community participation is rewarded. Under this model, the token is not pre-mined and distributed to the teams and shareholders, instead tokens are awarded to user that are active member of the community or provide services like liquidity.

Supply and distribution by project

1inch

1inch announced the initial details about the 1INCH token and supply in August of 2020, the initial supply is 1.6B 1INCH tokens distributed as follows:

• 848M (53%) tokens to the community and the network:

  • 480M for the security of the network (4 year vesting).
  • 336M for the ecosystem growth (4 year vesting).
  • 32M to early liquidity providers (1 year vesting).

• 752M (47%) tokens to the team and investors:

  • 360M tokens to the core and future team (4 year vesting).
  • 312M tokens to investors and shareholders (2.5 year vesting).
  • 80M tokens to advisors (4 year vesting).

Balancer

The total supply of the BAL token is capped at 100M CAP, distributed as follows:

• 65M (65%) will be distributed to liquidity providers.
• 25M (25%) to founders, advisors, and investors (6.25M unlocked immediately, remaining vested over 3 years).
• 10M (10%) tokens are reserved for other uses:
  • 5M to the Balancer Ecosystem Fund.
  • 5M to the Fundraising Fund.

Compound Finance

The total supply of COMP is 10M COMP, distributed as follows:

• 5.00M (50%) to the community.

  • 4.22M to future users.
  • 0.77M for community governance.

• 4.99M (50%) to founders, investors, and the team:

  • 2.39M to shareholders.
  • 2.22M to founders and team (4 year vesting).
  • 0.37M to future team members.

Cover Protocol

After listening to their community feedback, Cover decided to have a total supply of 70200 COVER tokens, distributed as follows:

• 59400 (85%) to the community.
• 10800 (15%) to the team (1 year vesting).

C.R.E.A.M. Finance

Cream finance started with no token pre-mine, the supply of CREAM is 9M CREAM tokens, distributed as follows:

• 5.4M (60%) to governance.
• 1.8M (20%) to liquidity providers.
• 900k (10%) to the team (2 year vesting, 6 months cliff).
• 900k (10%) seed (2 year vesting, 6 months cliff).

Curve

Curve token officially launched in August 2020, the total supply is 3.03B CRV distributed as follows:

• 1.88B (62%) to liquidity providers:
  • 151M to early liquidity providers (1 year vesting).
• 151M (5%) to the community reserve.
• 999M (33%) to the team and investors:
  • 909M to team and investors (2-4 year vesting).
  • 90M to employees (2 year vesting).

Instadapp

Instadapp will release 100M INST, details to be defined.

UMA

UMA released their token on Uniswap with a total supply of 100M UMA, distributed as follows:

• 48.5M (48%) to founders, investors, and early contributors.
• 35M (35%) to developers and users of the network.
• 14.5M (14%) reserved for future token sales.
• 2M (2%) to provide liquidity on Uniswap.

Uniswap

Uniswap surprised everyone when they airdropped their token to everyone that interacted with the app. The initial supply is 1B UNI, distributed as follows:

• 600M (60%) to the community.
  • 150M to early users.
• 212M (21%) to the team (4 year vesting).
• 180M to investors (4 year vesting).
• 6.9M (0.6%) to advisors (4 year vesting).

Vesper

At launch, Vesper has a total supply of 10M VSP, distributed as follows:

• 6.5M (65%) to the community:
  • 2.9M to the Vesper Reserves.
  • 2.5M incentivized launch pools.
  • 1M to liquidity providers.
• 3.5M (35%) to team and investors:
  • 2.5M to founders and advisors.
  • 1M to strategy partners.

Yearn Finance

Yearn Finance decided to have a "fair launch" model for their token distribution, with all 30k YFI tokens going to the community.