SAFT — Simple Agreement for Future Tokens
Investment contract used in pre-launch token sales. Investor pays now; receives tokens at the token-generation event. Designed to fit within US Reg D / Reg S securities exemptions.
Modelled on the Y Combinator SAFE (Simple Agreement for Future Equity), the SAFT is the standard investment instrument for pre-launch token sales. The investor pays an agreed amount now, in exchange for the right to receive a defined quantity of tokens at the token-generation event (TGE), subject to specified vesting and lock-up terms.
The SAFT is typically treated as an investment contract — and therefore a security under US Howey analysis — and is offered under Reg D (US accredited investors) or Reg S (non-US investors). The underlying tokens may or may not themselves be securities; the SAFT is its own legal instrument.
Key terms
- Token allocation formula (fixed quantity, fixed valuation, or discount to TGE price).
- Vesting schedule (cliff and linear release periods).
- Lock-up period post-TGE.
- Most-favoured-nation rights (subsequent better terms apply retroactively).
- Conversion or dissolution terms if TGE does not occur.