15 lines
1.9 KiB
Markdown
15 lines
1.9 KiB
Markdown
# Pre-mine
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Is the process of bootstrapping a [cryptoasset](cryptoasset.md), a pre-mine is an allocation of the total supply of the asset to a set of early insider who fund the initial development of the token. This creates [asymmetric-information](asymmetric-information.md) in which early shareholders have a share of all future tokens and undue influence over [price-formation](price-formation.md) of the asset once it goes live on a [crypto-exchange](crypto-exchange.md).
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Pre-mines are most often distributed to venture capital firms.
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Pre-mines have been criticised as an obscured form of [pump and dump](pump-and-dump.md) scheme.
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A pre-mine is an posited solution to the [distribution problem](distribution-problem.md).
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## References
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1. Livni, Ephrat, and Andrew Ross Sorkin. 2021. ‘The Dramatic Crash of a Buzzy Cryptocurrency Raises Eyebrows’. The New York Times, 28 June 2021, sec. Business. https://www.nytimes.com/2021/06/28/business/dealbook/icp-cryptocurrency-crash.html.
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1. Cornish, Chloe, and Richard Waters. 2018. ‘Silicon Valley Investors Line up to Back Telegram ICO’. Financial Times, January. https://www.ft.com/content/790d9506-0175-11e8-9650-9c0ad2d7c5b5.
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1. Andrés, Pablo de, David Arroyo, Ricardo Correia, and Alvaro Rezola. 2022. ‘Challenges of the Market for Initial Coin Offerings’. International Review of Financial Analysis 79: 101966. https://doi.org/10.1016/j.irfa.2021.101966.
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1. Burilov, Vlad. 2019. ‘Regulation of Crypto Tokens and Initial Coin Offerings in the EU: De Lege Lata and de Lege Ferenda’. European Journal of Comparative Law and Governance 6 (2): 146–86. https://doi.org/10.1163/22134514-00602003.
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1. Kharif, Olga. 2018. ‘Half of ICOs Die Within Four Months After Token Sales Finalized’. Bloomberg.Com. Bloomberg. https://www.bloomberg.com/news/articles/2018-07-09/half-of-icos-die-within-four-months-after-token-sales-finalized. |