Token Allocation Explained: The Simple Guide for Creators
Token allocation is how you divide your total token supply among different groups: your team, the community, liquidity, and future development. A well-planned allocation builds trust with holders and supports long-term project health. This guide breaks down the essential splits you need for a successful Solana token launch.
Key Points
- 1Allocation splits your total token supply (like 1,000,000 tokens) between you, your community, and liquidity pools.
- 2A standard starter split is 90% to liquidity (for trading) and 10% held by the creator, though this can be adjusted.
- 3On Spawned, 0.30% of every trade goes to you as creator revenue, and another 0.30% is distributed to token holders as rewards.
- 4Post-graduation, a 1% fee on transfers via Token-2022 can fund ongoing development and community initiatives.
- 5Clear, fair allocation is critical for building initial trust and preventing a 'rug pull' scenario.
What is Token Allocation?
The foundation of your token's entire economy.
Think of token allocation as the blueprint for your token's economy. If you create 1,000,000 tokens, allocation decides who gets them and why. It's not just about who holds tokens now, but planning for the future of your project.
A poor allocation can kill a project before it starts. If a creator keeps 95% of the supply, holders have little incentive to join. If too much is sold immediately, the price can crash. Your allocation plan communicates your intentions and commitment to the community.
The 4 Core Parts of a Token Allocation
While every project is unique, most allocations include these four core components. The percentages are starting points you can adjust based on your goals.
- Liquidity Pool (LP) Tokens (70-90%): This is the largest portion, deposited into a trading pool (like Raydium) so people can buy and sell your token. On Spawned, when you launch, your chosen allocation (e.g., 90%) is automatically locked into liquidity, providing immediate trading.
- Creator/Team Allocation (5-20%): This is your portion, often vested or locked to show long-term commitment. It can be used for development, marketing, or as personal project equity. Spawned's default allows you to hold back a portion (e.g., 10%) from the initial liquidity mint.
- Community & Rewards (5-10%): Tokens reserved for community giveaways, holder rewards, or future airdrops. This directly incentivizes and rewards your supporters. Spawned's built-in 0.30% holder reward on every trade automates a form of continuous community allocation.
- Treasury/Development Fund (0-10%): A reserve for future costs—like paying for the AI website builder post-launch, listing fees, or funding new features. The Spawned post-graduation 1% transfer fee can be directed to a project treasury.
How Allocation Works on Spawned: A 3-Step Walkthrough
From setting splits to live trading, here's the flow.
Spawned simplifies the allocation process with clear, built-in tools. Here's exactly what happens when you launch.
Allocation & Fees: Spawned vs. Other Platforms
Sustainable tokenomics are built-in, not an afterthought.
How you structure allocation is linked to the platform's fee model. Here’s a key difference that impacts your project's sustainability.
| Aspect | Spawned | Pump.fun (Typical Model) |
|---|---|---|
| Creator Revenue | 0.30% of every trade. Ongoing income from day one. | 0%. No built-in revenue share from trading. |
| Holder Rewards | 0.30% of every trade distributed to holders. Automatic community incentive. | Usually 0%. Rewards require custom, separate contracts. |
| Post-Launch Fees | 1% fee on transfers after graduating to Token-2022. Funds future development. | Varies; often no standard mechanism. |
| Allocation Support | Built-in splits, holder rewards, and revenue model guide sustainable allocation. | Basic liquidity/creator split. Sustainable economics are your responsibility. |
The Spawned model builds a rewards and revenue allocation directly into your token's lifecycle, encouraging long-term holding and project growth.
3 Allocation Mistakes New Creators Make
Avoid these common pitfalls that can undermine trust and project viability.
- Keeping Too Much, Too Soon. Holding 50%+ of the supply signals a potential 'rug pull.' A smaller, transparent creator allocation (like 10-20%) builds more trust than a large, vague promise.
- No Plan for Holder Value. Launching without a mechanism to reward holders (like Spawned's 0.30% reward) means people are only speculating on price. Allocation should include a way to share success with your community.
- Ignoring Future Costs. Forgetting to allocate tokens or plan for a treasury (funded by something like the 1% post-graduation fee) can leave your project stranded without resources for development, marketing, or website hosting costs.
The Verdict: How to Get Your Allocation Right
Simplicity, transparency, and built-in sustainability win.
For a new creator launching on Solana, start with a simple, transparent, and sustainable allocation model.
Start with the 90/10 Split: Allocate 90% of your token supply to the initial liquidity pool and retain 10% for yourself. This is a community-trusted standard that provides deep liquidity and shows you're not over-reserving for yourself.
Use a Platform with Built-In Economics: Choose a launchpad like Spawned that encodes rewards and revenue into the process. The automatic 0.30% holder reward acts as a continuous community allocation, and the 0.30% creator fee ensures you have resources from the start. This eliminates the need for complex, custom reward contracts early on.
Plan for the Next Phase: From day one, know that after you graduate from the initial launch pool, you can enable a 1% transfer fee using Token-2022. Allocate this future revenue stream to a project treasury to fund development, marketing, and tools like your AI website builder, turning your token into a self-sustaining project.
Ready to Structure Your Token's Future?
Your token's allocation sets the stage for everything that follows. With Spawned, you get a clear framework for a fair launch, automatic holder rewards, and a path to sustainable creator revenue.
Launch your token with a solid economic foundation. Set your allocation, lock your liquidity, and start building your community with the only Solana launchpad that builds holder rewards and creator revenue directly into your token.
Launch Your Token on Spawned - 0.1 SOL fee. Includes AI website builder.
Related Terms
Frequently Asked Questions
A common and trusted starting point is 90% of the total supply allocated to the initial liquidity pool and 10% retained by the creator. This provides significant liquidity for trading while the creator keeps a small, reasonable portion. On Spawned, this is a standard, easy-to-set option during launch.
It's an automatic, ongoing allocation of the token supply to your community. On every single trade, 0.30% of the transaction value is taken as a fee and distributed proportionally to all current token holders. This acts like a continuous dividend or staking reward, incentivizing people to hold your token long-term without you manually managing airdrops.
Yes. When you launch on Spawned, the tokens you designate for liquidity (e.g., 90%) are automatically paired with SOL from your launch fee and deposited into the liquidity pool. This liquidity is locked, meaning it cannot be removed by anyone immediately, protecting early buyers from a 'rug pull' scenario.
The initial split between liquidity and your creator wallet is fixed at launch. However, you have full control over the tokens in your creator wallet (e.g., your 10%). You can choose to hold them, use them for marketing, or even add more to the liquidity pool later. The ongoing 0.30% reward and revenue allocations are permanent features of the token contract.
After your token reaches a certain market cap and 'graduates' from the initial launch phase, you can upgrade to Solana's Token-2022 standard. This allows you to enable a 1% fee on all token transfers. You should allocate this future revenue stream to a project treasury to fund ongoing costs like development, community management, and paid tools (e.g., your Spawned AI website builder subscription).
A transparent allocation plan shows holders you have a long-term vision, not just a quick cash-out. It answers critical questions: How much do the creators own? Is there enough liquidity to trade? Is there a plan to reward the community? Clear answers prevent fear, uncertainty, and doubt (FUD) and are the foundation of a healthy project community.
Not necessarily. For a solo creator, your 'creator allocation' (the 10% you retain) serves as your team allocation. You can use it for personal project equity, future development work, or to bring on team members later. The key is to be clear about its purpose. Vesting or locking a portion of it can further demonstrate your long-term commitment.
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