Definition ∞ A community token sale is a fundraising event where a blockchain project offers its native digital tokens directly to its supporting community members. These sales aim to distribute tokens widely and foster early adoption and engagement among project supporters. Participants typically acquire tokens at a predetermined price or through a structured auction mechanism. This method often prioritizes network decentralization and broad participation over large institutional investments. It builds a dedicated user base.
Context ∞ The discussion surrounding community token sales frequently addresses fairness in token distribution and preventing whale dominance. Projects aim to balance accessibility for small investors with sufficient capital generation for development. Regulatory scrutiny regarding token sales remains a constant consideration, influencing their structure and execution. The success of a community token sale often signals strong project support and future potential.
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