Creating tokens in an ICO was one thing, but figuring out how many to create, how much to sell, the early round bonuses, the inflation rate and everything else relating to the mechanics of the tokens was (and still is) a challenging task.
Although there is no right or wrong way to create tokens and market it, a lot of parallels can be drawn from the issuance of regular shares in a company served with a side of economic incentives, a sprinkling of game theory, and a dust of creative marketing. In this article, we will look at the all-important supply and distribution of an ICO.
This article is an excerpt from the book Tokenomics by Sean Au and Thomas Power. This book is a deep-dive into the economics and technology of tokens, and how this will lead to a new tokenized economy.
Token Supply & Distribution
Looking at the number of tokens created, there is generally no rhyme nor reason for the values chosen. The standard default in the early days seemed to be 100 million tokens which was a nice round number. Others preferred 1 billion as a round number. The supply ranged from 2.6 million to 2.7 quadrillion.