What is token allocation disclosure?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 5 min
In short
Allocation disclosure means publishing who receives what share of the total supply and when each share unlocks. The larger the team and investor slices, the more later buyers are exposed to growing supply. Three things are worth checking yourself: the allocation percentages, the lock-up periods, and whether the operators retain the power to change either.
Key points
- A published breakdown of who holds what share of supply
- Heavy team and investor shares disadvantage later buyers
- Unlock dates are supply-increase dates
- Check whether operators can change the allocation
Definition
The disclosure of how a token's total supply is divided between the team, investors, a foundation, the community and other categories, together with each category's lock-up period and release schedule.
Allocation tables normally appear in the whitepaper or official documentation as a pie chart plus a table. What matters more than any single slice is the combined insider share — team, advisers and early investors. The larger that total, the larger the amount that can be sold once locks expire.
Lock-ups usually combine a cliff, during which nothing releases, with vesting that releases gradually afterwards. A schedule that spans several years on paper can still put a large block into circulation the day the first cliff ends, which changes supply and demand at that moment. The dates and the amounts have to be read together.
The other thing to check is operator discretion. If the contract or governance rules let someone add new recipients, spend an unallocated reserve or shorten a lock, then the published table is not a guarantee about the future. Knowing what procedure a change requires is the practical level of detail.
Watch out for
- · Reading the pie chart without the unlock schedule misses the supply picture
- · A 'community' slice is sometimes a pool the operators control
- · Large unallocated reserves leave room for later dilution