Section 1.1: Common Methods of Token Distribution

Token distribution can be executed through several conventional methods, including:

1. Initial Coin Offering (ICO): This approach allows projects to raise funds by selling tokens to early investors, typically at a predetermined price or through a tiered pricing structure.
2. Token Sale/Token Generation Event (TGE): Similar to an ICO, a TGE involves selling tokens to the public or a select group of investors, which can occur before or after the project's launch. Each phase of a token sale—private sale, pre-sale, and public sale—may have distinct terms.
3. Airdrops: In this method, tokens are distributed freely to a wide audience, often to promote the project or reward early users. Eligibility criteria usually apply for recipients.
4. Mining and Staking: Some blockchain networks distribute tokens through mining or staking, where validators or miners secure the network and earn new tokens as a reward for their contributions.
5. Private Placements: Projects might conduct token sales or private placements targeting a limited audience of investors or venture capitalists. These offerings typically come with strict investment criteria and are not open to the general public.
6. Token Burning: Occasionally, tokens are permanently removed from circulation, a process known as token burning. This can enhance the value of remaining tokens by decreasing the overall supply.

It is essential to note that the chosen token distribution strategy reflects the project’s objectives, applicable regulations, and the underlying blockchain architecture. Detailed procedures for token distribution are often outlined in the project's whitepaper, providing transparency and clarity to participants.

Section 1.2: The Importance of Transparency

In summary, understanding token distribution is crucial for anyone involved in blockchain projects, as it has significant implications for ownership and the value of digital assets.