web3/concepts/pre-mine.md

Pre-mine

Is the process of bootstrapping a cryptoasset, 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 in which early shareholders have a share of all future tokens and undue influence over price-formation of the asset once it goes live on a crypto-exchange.

Pre-mines are most often distributed to venture capital firms.

Pre-mines have been criticised as an obscured form of pump-and-dump scheme.