"Token Distribution" TAG

Nothing-at-Stake Problem
  • glossary
The “nothing-at-stake” problem refers to the fact that block creators on generic proof-of-stake protocols do not have anything at stake when the network forks. This is one of the primary criticisms of proof-of-stake consensus mechanisms. When a proof-of-work based network, like Bitcoin, forks, every active miner creating blocks on the network must *choose* which fork...
Security Token Offering (STO)
  • glossary
A Security Token Offering (STO) is the process through which Security Tokens are made available to qualified investors through a sale. They are defined by fundraising platforms and procedures that adhere to the applicable securities laws regarding appropriate distribution practices in the jurisdiction in which the offering is made. This contrasts with the various practices...
Over-the-Counter Trading (OTC)
  • glossary
Over-the-counter trading is a process for trading assets (both crypto and traditional securities) that does not involve exchanges but instead uses a brokerage to facilitate transactions. Unlike exchanges, where prices are set by market makers, OTC trading involves negotiation between buyers and sellers, with brokers acting as intermediaries. These brokers are also responsible for initially...
Iceberg Order
  • glossary
Iceberg orders are large transactions that are divided into a number of smaller limit orders, so as to conceal the transaction and avoid market repercussions from the execution of such a sizeable trade. These tactics are typically used by institutional investors attempting to take or unload significant positions without driving an asset’s price in an...
Token Sale
  • glossary
“Token Sale” refers to a family of fundraising events where a portion of newly issued cryptocurrency is sold to finance a project. ICOs, IEOs, SAFTs, Securities, and Private Sales all represent ways token sales are conducted, and are differentiated by who may participate, how the sale is conducted, and manner of due diligence, among other...
Circulating Supply
  • glossary
Circulating supply is the number of tokens currently available and tradable within a network. Projects have various methods of altering circulating supply, including creation at the genesis block, algorithmic issuance, and stakeholder voting. Due to various methodological differences in counting unvested or otherwise locked tokens, data providers may report varying circulating supply values for a...
Hard Cap
  • glossary
A hard cap is the maximum amount of tokens that will be sold in a project’s fundraising event (ICO, IEO, SAFT, etc.). In contrast, a ‘soft cap’ represents a project’s minimum viable funding. Projects may include additional developmental milestones should the project’s raise exceed the soft cap by a given threshold.
Airdrop
  • glossary
An airdrop is a distribution mechanic for cryptoassets, typically involving allocating free tokens to a wide user base. Allocations are often based on holdings of other cryptoassets or interaction with a project or service. Airdrops aim to leverage the network effects of existing projects to drive user engagement. Airdrops do not require users to contribute...
Know Your Customer (KYC)
  • glossary
KYC stands for ‘Know Your Customer’ and refers to the processes of verifying investor, customer, or client identity so to avoid facillitating money laundering, fraud, bribery, terrorism, or other corrupt or malicious acts. Goverments typically require financial institutions to be KYC compliant, and projects can benefit from performing KYC through avoided fines and better managed...
Initial Exchange Offering (IEO)
  • glossary
Initial exchange offerings (IEO) are processes by which cryptoassets are initially made available to investors through exchanges. The assets are typically tokens sold by companies (often startups) for the purpose of raising capital. IEOs function similarly to ICOs, with the key distinction being that IEOs employ exchanges as intermediaries to facilitate transactions rather than using...
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