Native Token Allocation

After configuring your custom native token, the next step is to define how the token supply will be distributed. Initial token allocation is crucial as it determines the distribution of tokens among validators, developers, early participants, and other stakeholders in your blockchain ecosystem.

Why Initial Token Allocation Matters

The way you allocate tokens at the start of your blockchain’s lifecycle sets the foundation for how your network will operate. Proper allocation ensures that incentives align with network security, participation, and governance.

• Validators: Allocating tokens to validators ensures that they have the necessary stake to secure the network and participate in consensus.
• Developers & Ecosystem: Distributing tokens to developers and contributors incentivizes growth and innovation within your ecosystem.
• Early Participants: Rewarding early participants helps build a strong, engaged community.

Structuring Initial Token Allocation

When prompted, you’ll be given several options to structure the initial token allocation:

? How should the initial token allocation be structured?: 
  ▸ Allocate 1m tokens to a new account
    Allocate 1m to the ewoq account 0x8db...2FC (Only recommended for testing, not recommended for production)
    Define a custom allocation (Recommended for production)

Minting New Native Tokens

You will also be asked whether you want to allow minting of new tokens beyond the initial supply:

? Allow minting of new native tokens?: 
  ▸ No, I want the supply of the native tokens to be hard-capped
    Yes, I want to be able to mint additional native tokens (Native Minter Precompile ON)

• Hard-capped Supply: Selecting No creates a finite supply of tokens, which cannot be increased. This is similar to the design of assets like Bitcoin, where the total supply is fixed.
• Mintable Tokens: Selecting Yes enables the Native Minter Precompile, allowing the minting of new native tokens over time. This option gives you flexibility to issue more tokens as needed. We will discuss the Native Minter Precompile in detail in upcoming chapters.

What’s Next? If you enabled minting, explore how to configure and interact with the Native Minter Precompile to mint new tokens and manage supply over time.