Definition ∞ Token generation refers to the process of creating new digital tokens on a blockchain, often as part of a new cryptocurrency project or decentralized application. This process involves defining the token’s parameters, such as its total supply, symbol, decimal places, and specific functionalities, usually through a smart contract. Token generation events, like initial coin offerings (ICOs) or initial DEX offerings (IDOs), are used to distribute these newly created tokens to early investors or community members. It is a fundamental step in launching a new digital asset within a blockchain ecosystem.
Context ∞ News frequently covers token generation events, analyzing their economic models, distribution strategies, and regulatory implications. Debates often concern the fairness of token distribution, potential for price volatility post-launch, and compliance with securities laws in various jurisdictions. The transparency and security of the token generation process are critical factors influencing investor confidence and the long-term viability of the project. Developers strive to implement robust and auditable token generation mechanisms to avoid future issues.
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