premine

Premine refers to the practice of creating a portion of a cryptocurrency’s total supply before or at the time of launch, and allocating that portion to specific addresses such as founders, developers, early investors, or a development treasury. It is distinct from a fair launch, where no premined coins are set aside and the public mining or staking begins from the outset.

Premine can occur through different mechanisms. One common method is to embed an initial allocation in the genesis block or in the early blocks, granting coins to designated addresses. Another approach is a built-in treasury or founder’s reward in which a portion of each block’s reward is diverted to a development fund or reserve. Some projects disclose the allocation and governing rules to increase transparency, while others rely on governance structures to approve fund usage.

Purposes for premine typically include funding ongoing development, security, marketing, community initiatives, and long-term sustainability. Proponents argue that a funded treasury helps ensure sustained improvement and reduces reliance on external fundraising. Critics, however, view premine as potentially entrenching central control, harming perceived fairness, and influencing token distribution and market dynamics.

The topic remains controversial and is context-dependent. Transparency about the size, purpose, and governance of any premine, along with clear rules for how funds are spent, can affect its acceptance. Notable discussions often contrast premine-based models with fair-launch designs.