February 22, 2026
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October 31, 2025
October 31, 2025
Whether you're a savvy crypto investor or a founder preparing to launch your project, you need to understand tokenomics, and more specifically, how token allocation is handled through IDO launchpads.
Token allocation is the foundation of tokenomics. The distribution of your tokens will determine how your project can sustain its value over time. If you don't have the right model of tokenomics for your project, your project may be subject to chaos, early dumping, and loss of trust.
An IDO launchpad is a platform that helps Web3 projects raise money from the public by offering early access to tokens before they’re officially listed. Unlike ICOs or IEOs, IDOs are open to everyone with a wallet. You don’t need to be a VC or pass a special KYC to participate.
Before we discuss how token allocation works on launchpads, we need to clarify two key concepts: what allocation actually means and what a token represents.
Allocation simply means setting aside something with a specific goal in mind. It could be money, time, people, or, in our case, tokens. You're assigning a task or purpose to that resource.
A token is not just a digital reward or a file you receive; it is a representation of value. In Web3, your token represents your project. It’s how that value is broken down and made available to others. When you allocate tokens, you’re deciding how that value is going to be distributed and what role each token will have.
So when we say token allocation, we’re talking about assigning parts of your project’s value to different goals. For example, bringing in liquidity, rewarding contributors, supporting your DAO, or building your community. This isn’t something you leave to chance. It’s a design decision.
Many people confuse allocation with tools like airdrops or mining. But those are mechanisms. They’re not the logic behind your system. Allocation is part of your project’s political and economic structure. It determines who gets access, who gets power, and how your project is going to be perceived and sustained.
The moment you create a token, you’re already making allocation decisions, whether you’re aware of it or not.
The role of an IDO launchpad is to select crypto projects and offer them to its pool of investors. The way they do this is by having a process of selection and evaluation, known as vetting. Once a project is approved, it gets announced and promoted across the launchpad’s website and social media channels.
After the project is promoted, users participate in the IDO sale. Then, at the Token Generation Event (TGE), tokens are minted and distributed to investors’ wallets.
For investors, this is a way to access early-stage crypto tokens and invest safely before they reach the public market.
Different launchpads have different models, which we’ll go over below. At CoinTerminal, we use a lottery system powered by Chainlink VRF. We run refundable sales with no staking and no token gating. You can invest directly using stablecoins. Just connect your wallet, and if your wallet is selected, you complete KYC. Before that, you’re free to browse our active projects.
Let’s look at 10 models that founders and platforms use to distribute tokens and how each one works.
This is when tokens are sold before the public sale to VCs, angel investors, or partners. It’s common in ICOs and IEOs.
Still, a project might have had a private sale before the IDO. If so, founders should keep this round small and include long vesting schedules with cliffs. And don’t just look for cash. Look for partners who add real value.
This is the main event. ICOs and IEOs may have gatekeeping. An IDO doesn’t. It’s fully public and runs on-chain. If your project is going this route, your allocation needs to be designed with openness and fairness in mind.
Airdrops are not part of tokenomics. Airdrops are a marketing tool. They are a way to promote your project within a niche audience. People complete tasks that give your token visibility. If your task is good and your reward is clear, you’ll get results. If not, you’ll just get noise.
Project founders track what people did with the protocol and reward them later. Bridging, staking, or governance.
This involves pairing your token with something that holds value, such as ETH, through staking platforms or aggregators like EigenLayer or Pendle. The idea is that people use their assets to support your project.
As a founder, your job is to explain your value so clearly that people are willing to pair their ETH with your token.
Liquidity mining is when people provide tokens to help your protocol run and get rewarded in return. Yield farming is a broader term. It includes liquidity mining, aggregator rewards, airdrops, everything.
Your community builds with you. Some write code. Some educate. Some handle support. Contributors are fundamental for projects in the Web3 space. It is important that project founders consider token allocations for contributors from the start.
Some tokens should be set aside for decentralized decision-making. DAO governance allows the community to vote on how funds are allocated. This can be for grants, partnerships, growth, or product direction.
Nobody gets early access. Nobody gets a discount. You earn your tokens through activity or contribution. This works when you trust your community. When you want the work to speak for itself.
It’s smart to hold a reserve of tokens for unforeseen events, such as a new partnership emerging, liquidity for an exchange, or funding rounds. Either way, having a reserve of tokens is necessary, and as such, project founders must disclose this information.
Launchpads don’t just hand out tokens randomly. They use systems designed to balance fairness, commitment, and accessibility. Most of them fall into three main categories: staking tiers, lotteries, and whitelists.
Staking tiers reward people who believe early. You lock the launchpad’s native token, and depending on how much you stake, you move into higher tiers. Higher tiers usually mean earlier access or bigger allocations. This model rewards loyalty but tends to favor people with more capital.
Lotteries aim to level the playing field. Wallets are selected at random, often using verifiable on-chain tools like Chainlink VRF. Everyone has an equal chance regardless of how much they hold. This helps protect retail users and removes the “pay-to-play” dynamic.
Whitelists are manually curated. Project teams select wallets based on specific criteria, like completing tasks, joining a community, or engaging in a campaign. It allows for more control, but it’s not always transparent and sometimes favors insiders.
All these models are trying to answer the same question: how do we make sure tokens go to people who will actually support the project, not just dump the token? That’s what allocation strategy is really about.
Yes. Every launchpad has its own logic, and it reflects the kind of community they’re trying to build.
Some platforms rely heavily on staking tiers, which favor early supporters who accumulate the platform’s token. Others choose randomized lotteries to give equal access. Some focus more on social engagement, using whitelists that reward people who help promote the project.
Even the same launchpad might switch models depending on the project. A more technical project might use a whitelist to attract developers and builders. A gaming project might run an airdrop campaign followed by a lottery.
The key is: allocation models are not just about fairness; they’re about alignment. Founders and launchpads need to ask: Who are we trying to attract? What behavior are we encouraging? And are we giving access to the right people?
Token allocation is not one-size-fits-all. It’s a design decision. And, like any good design, it must align with the goal.
Launchpads that do things well use smart contracts, transparency, and public logic:
The idea is: no backdoors, no surprises. Everything on-chain, everything visible.
Token allocation is not about handing out tokens. It’s about deciding who gets access, who gets power, and who gets to build with you.
If you're building in Web3, take the time to plan your allocation. Decide what value means to you. And ensure that your tokenomics align with what you're truly trying to build.
This article is for educational purposes only. It is a general guide for founders and users navigating the Web3 space. It does not constitute financial advice. Always do your own research before making any investment decisions.If you want to learn more about raising funds or which IDOs to look into, our team is here to help. Feel free to reach out to us on Telegram at any time.
