What Are IDO Allocation Rounds and How Do They Work?

Now that you know how to join a token presale and understand the importance of safety as an investor, the next step is learning how to evaluate the data that projects share.

This data is called tokenomics, and it explains not only how tokens are created and distributed but also how the project plans to build long-term sustainability.

Within tokenomics, one of the most important elements to pay attention to is IDO allocation rounds. These rounds determine who gets tokens, when they get them, and under what conditions.

In this blog, we’ll break down what allocation rounds are, why launchpads use them, and how you can train your eye to read this information as part of your own research.

What Are IDO Allocation Rounds?

To understand IDO allocation rounds, it helps to start with the broader idea of how projects assign purpose to their tokens.

Allocation in Tokenomics

When project founders in Web3 raise funds, it’s not about collecting all the money at once or from the same group of investors. Instead, they carefully design tokenomics to decide how tokens will be allocated; in other words, how each portion of tokens will be assigned a purpose.

For example, tokens may also be allocated for the team, advisors, or contributors as part of the overall tokenomics design. Remember, an allocation simply means assigning tokens for a purpose. In the case of IDO allocation, we’re being more specific; it refers to the tokens distributed to the public during the fundraising event on a launchpad.

IDO Allocation in Practice

IDO allocation rounds are the phases that structure how tokens are distributed during a fundraising event on a launchpad. They are part of a project’s tokenomics design and play a key role in shaping the long-term relationship between investors and the project.

Example of Fundraising Split

Let’s say a project wants to raise $500,000. Instead of opening that entire amount to the public, they might split it: $200,000 for a private sale, $100,000 for a seed round, and the final $200,000 through an IDO launchpad. 

This split is not random, it’s designed to balance access, strategy, and long-term sustainability.

Why Allocation Rounds Matter

Tokens in Web3 are not just digital assets; they represent participation, trust, and alignment with the project’s vision. That’s why teams don’t want just anyone with money to buy in; they need the right mix of investors to sustain the project beyond launch.

Why Do IDO Launchpads Use Allocation Rounds?

IDO launchpads use allocation rounds because there are thousands of people who want to buy tokens, and without structure, the process would be chaotic. The goal isn’t to sell tokens to just anyone with money, because tokens also create a long-term relationship with the project. Both the project and the launchpad want that relationship to be healthy and sustainable.

For launchpads, their reputation depends on how well the projects they host perform. If a project fails because of pump-and-dump behavior, it reflects badly on them. For projects, they want investors who actually believe in the vision, not just people looking to make a quick flip. Allocation rounds help filter participation so that the right mix of investors can join and the sale is not dominated by whales or speculators.

For example,  launchpads like Polkastarter or DAO Maker use tiered systems that depend on how much you stake or contribute. This way, access to tokens is connected to commitment, which reduces short-term speculation and creates better conditions for long-term success.

What Are the Common Types of Allocation Rounds?

As we discussed above, there are different ways that projects divide their fundraising. Projects usually divide their fundraising in two ways: by the audience they raise from, and by the mechanism through which that audience gets access to tokens.

Audience-Based Rounds

• Private/Seed Rounds: These are early-access sales reserved for venture capital firms, partners, or strategic investors. They are invitation-only, usually at the lowest price, and designed for people who can influence the project long-term.

• Public Rounds: These rounds are open to anyone, usually with higher prices or smaller allocations. From the founder’s perspective, they bring more variety to the investor base. For you as an investor, this is the most accessible way to participate in an IDO on a launchpad.

Mechanism-Based Rounds

• Guaranteed Allocation Rounds: Investors who stake a certain amount of the launchpad’s native token get guaranteed slots. This mechanism rewards long-term commitment.

• Lottery Rounds: Allocations are randomized, often based on staking tiers or whitelist participation. This gives smaller investors a fair chance to join.

• First-Come, First-Served (FCFS): Tokens are available until sold out. At CoinTerminal, for example, we use an FCFS model. You only need to complete KYC once, and then you can invest directly with stablecoins. Since we don’t have a native token, we don’t require staking, keeping participation open-access.

Examples from Launchpads

Some launchpads combine both approaches. For instance, BSCPad divides allocation into guaranteed tiers based on staking, followed by a public FCFS round where leftover tokens often sell out in seconds. At CoinTerminal, by contrast, we simplify access by removing token-gating requirements and offering a direct FCFS system.

How Do Allocation Rounds Differ from Traditional Token Sales?

By definition, an allocation means assigning tokens for a purpose as part of the overall tokenomics design. An IDO allocation round is more specific: it refers to the portion of tokens distributed to the public during a presale on a launchpad.

A token sale happens after listing, when the token is already available on a centralized or decentralized exchange. At that point, it can be freely bought, sold, staked, or traded. A token presale, on the other hand, gives investors access before listing, and this is where IDO allocation rounds take place.

In practice, that means:

• Before listing: allocation rounds structure who gets tokens, when, and through which mechanism.

• After listing: allocation rounds end, and the control mechanism shifts to vesting schedules, which regulate how and when early investors, teams, or advisors can unlock and sell their tokens.

So allocation rounds shape the pre-listing fundraising strategy, while vesting schedules shape post-listing stability. Both are essential elements of tokenomics design.

How Do Allocation Rounds Affect Token Pricing?

Allocation rounds are designed for sustainability, stability, and scalability. They are carefully thought out in the tokenomics design from the very beginning.

When a project decides how much funding it needs to raise and how tokens will be allocated, it also decides the pricing structure for each round. That’s why different rounds come with different token prices and amounts.

Pricing Across Rounds

Private or seed rounds usually have the lowest token price and involve fewer tokens, because they are meant for strategic, long-term supporters. Public presales are priced higher, and once the token lists on an exchange, that’s usually the highest price overall.

This is not about being sketchy; it’s a strategic process. Token pricing creates a structured relationship between the project and its audience, making sure the project can scale over time.

What Role Does Staking Play in Allocation Rounds?

It depends on the launchpad. If the platform requires staking, then the amount of launchpad tokens you stake affects how many project tokens you can access. The more you stake, the higher your allocation or the better your benefits.

This mechanism helps stabilize the launchpad’s token and ensures participants are committed. In staking-based models, allocation rounds reward long-term holders and filter out quick speculators.

What Are the Advantages of IDO Allocation Rounds?

For project founders, allocation rounds provide scalability and predictability. They know how funds will come in and can plan for long-term sustainability from day one.

For investors, the advantages are fairness and transparency. Allocation rounds make it clear how tokens are distributed in the tokenomics design, so you can evaluate whether the project’s structure makes sense for you.

They also create structured participation, reducing the risk of a chaotic free-for-all where only whales or bots dominate the sale.

Final Thoughts

IDO allocation rounds are a necessary part of tokenomics design. They give founders stability in raising funds and allow investors to evaluate a project’s structure before committing.

At CoinTerminal, all allocation details are made publicly available, so you can review them directly and make your own decision. We’re the first and only open-access IDO launchpad, constantly working to make participation easier and more rewarding.

And don’t forget, every contribution of 250 USDT or more automatically enters you into our monthly crypto lottery. Even if you later request a refund, you still keep your lottery entry. Browse our active sales and join today.