Allotment in Crypto Definition

An allotment specifies the maximum number of tokens an individual or entity may purchase during a sale or distribution event. Token sales such as initial coin offerings (ICOs), initial DEX offerings (IDOs), and private rounds often impose limits to prevent large buyers from absorbing the entire supply.

Purpose of purchase caps

• Fair access – Capping allocations broadens participation and reduces concentration among a few well-funded investors.
• Market stability – Limiting early ownership discourages aggressive selling pressure once tokens list on secondary markets.
• Community trust – Transparent rules signal an effort to balance interests between retail users, strategic partners, and project teams.

ICOs versus IDOs

ICOs typically occur on a project’s website and follow fewer regulatory safeguards than traditional securities offerings. IDOs, hosted on decentralized exchanges such as Uniswap, automate fundraising through smart contracts and publish on-chain records of each transaction, which improves auditability.

Practical example

A project offers ten million tokens and restricts each participant to one thousand units. Regardless of available capital, no buyer can exceed that limit, ensuring wider distribution across the community.