> ## Documentation Index
> Fetch the complete documentation index at: https://docs.theblockchainlibrary.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Token Allocation

> The planned division of a token supply among users, investors, teams, treasuries, ecosystems, or incentives.

# Token Allocation

The planned division of a token supply among users, investors, teams, treasuries, ecosystems, or incentives.

## Definition

The planned division of a token supply among users, investors, teams, treasuries, ecosystems, or incentives.

## Why it matters

Tokenomics describes how token supply, distribution, incentives, and utility influence a network economy.

## How it works

Founders draft an allocation table detailing the distribution percentages. These are often managed by multi-signature wallets or timelock contracts that release specific portions of the supply to the designated parties according to a schedule. Transparency in this process is high, as the distribution is usually recorded on-chain or audited by third parties.

## Real-world example

Many projects allocate 20% to the team, 20% to the treasury, and 60% for community incentives to ensure long-term ecosystem viability.

## Advantages

* Outlines project governance structure
* Ensures fair distribution planning
* Aligns incentives for key stakeholders

## Limitations

* Subject to founder bias
* High insider allocation causes distrust
* Plans can change if not locked

## Common misconceptions

* Allocation plans are always followed strictly.
* Large team allocations are always predatory.

## Related knowledge

* [Circulating Supply](/generated/v2/glossary/circulating-supply) — term
* [Token](/generated/v2/glossary/token) — term
* [Total Supply](/generated/v2/glossary/total-supply) — term

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**Canonical knowledge ID:** `glossary:token-allocation`