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What is Allocation?

Allocation is the distribution of tokens or ownership to a specific investor, team, group, organization, or other relevant entity that can be earned, acquired, or set aside.

Understanding Allocation

For a crypto team in the early phases of development, the executive team or community may work on determining how token allocations should be divided up among various initiatives and departments, such as development, marketing, operating costs, and so on. If a team has a foundation or other body that controls funds, it may elect to create an allocation for a token treasury to be used how the team or community specifies.

Investors can also earn allocations in investment rounds. In a private sale round, for example, a team may sell allocations of a certain “ticket size,” or maximum amount, to early investors. In this situation, each of these individual investors would possess a portion of the total amount offered in that round of sales. An individual entity may be able to keep allocations from many rounds of sale, implying that they may eventually participate in successive stages of an Initial Coin Offering (ICO) or token sale event, with a predefined allocation for each stage.

As a reward for their efforts, team members working on a certain currency, protocol, or project may receive a portion of a team allocation. These allocations, for example, could be paid out all at once on a specific day – such as the date of a token generation event (TGE) – or spread out over time according to a preset timetable.

In other cases, the allocations are spread out over time as part of a block reward, or over a vesting term or cliff.

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Damir Yalalov

Damir is the team leader, product manager, and editor at Metaverse Post, covering topics such as AI/ML, AGI, LLMs, Metaverse, and Web3-related fields. His articles attract a massive audience of over a million users every month. He appears to be an expert with 10 years of experience in SEO and digital marketing. Damir has been mentioned in Mashable, Wired, Cointelegraph, The New Yorker,, Entrepreneur, BeInCrypto, and other publications. He travels between the UAE, Turkey, Russia, and the CIS as a digital nomad. Damir earned a bachelor's degree in physics, which he believes has given him the critical thinking skills needed to be successful in the ever-changing landscape of the internet. 

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