Token Distribution Models

Definition ∞ Token distribution models are the various strategies and methods employed by projects to allocate and circulate their native digital tokens to initial participants and the broader market. These models include initial coin offerings ICOs, airdrops, staking rewards, mining incentives, and vesting schedules. The chosen distribution model significantly impacts decentralization, price discovery, and community engagement for a digital asset. These structures determine ownership and control within a protocol.
Context ∞ The fairness and effectiveness of token distribution models are frequently debated topics in cryptocurrency news, influencing investor sentiment and regulatory scrutiny. Discussions often center on issues of centralization, market manipulation, and equitable access to new digital assets. Projects continuously refine their distribution strategies to foster sustainable ecosystems and comply with evolving regulatory guidelines.